such risk - based pricing is consistent with expanding access to credit. indeed, many of those receiving higher - rate loans would in the past have been denied credit at lower rates. however, some banks are concerned about the risk to their reputation that might be precipitated by the new hmda data on rates charged for the higher - rate segment of the market. specifically, by doing what public policy intended - increasing credit availability to less creditworthy, often minority, borrowers - - banks might be accused unfairly of discrimination by those who fail to connect risk to price or to evaluate rates in terms of risk measures. such concerns are understandable as, indeed, also are concerns that race, gender, ethnicity or other characteristics not reflective of risk per se may still adversely affect the cost of credit to some borrowers. the adoption of risk - based pricing, together with elements of discretion that are often afforded loan officers or brokers in the pricing of credit, does raise the concern that some borrowers, in fact, may not be treated fairly. the changes in market structure coupled with such concerns suggested to us the need to revise our hmda data collection in order to gather information on rates charged to aid us in seeing if, in fact, differences in rates are truly driven by differences in risks and costs and not tainted by discrimination. we recognized that such conclusions require far more detailed evaluations than is possible using hmda information alone, with or without the additional data on rates. nonetheless, the pricing data will assist as a screening tool to facilitate self - monitoring and enforcement activities. if screening suggests that there might be a fairness issue, additional information will need to be collected from banks'loan files or other sources. bank secrecy act and suspicious activity reports in the last year or so, banks have also become concerned about the scope of their obligations to file suspicious activity reports ( sars ) under bank secrecy act regulations and the sanctions used to address deficiencies, which have included criminal prosecutions. the purpose of the law and its associated regulation is to capitalize on the banks'central role in payments and financial flows by, in effect, making banks partners with law enforcement to address criminal activities such as money laundering by drug dealers, the financing of terrorist activities, and fraud. as you know, sar regulations call for banks to report what they believe to be " known or suspected " violations and suspicious activities by their customers that could be associated with such criminal activities. bank regulations and supervisory oversight are designed

or so decades. one class of regulations is concerned mostly with ensuring that banking institutions serve their communities by addressing possible instances of discrimination and, more recently, by assisting law enforcement. examples are regulations adopted to carry out provisions of the equal credit opportunity act ( ecoa ), the community reinvestment act ( cra ), the home mortgage disclosure act ( hmda ), and, the bank secrecy act ( bsa ). another class of regulations addresses " consumer protection, " which the agencies, at the direction of the congress, have implemented by adopting rules designed primarily to provide consumers with information to protect themselves ( in some cases, however, the rules also involve substantive restrictions on certain practices ). more generally, these regulations, if crafted carefully, should enhance market efficiency by providing consumers with more complete, consistent, and timely information ; by promoting consumer awareness and shopping ; and by opening the way for moreeffective competition. that is surely our intention with our truth - in - lending and truth - in - saving regulations, for example. the same factors that make banks candidates for supervision and regulation - - their central role in the financing process coupled with the benefits of the safety net provided to banks by government - - have also made banks prime candidates for lawmakers to select as vehicles to achieve desired social and economic objectives. not only can banks deliver because of their economic role and expertise, but also legislators often believe banks have an obligation to do so because of the special benefits that have been provided for them. in implementing the law of the land, cost - benefit calculations often require compromises and modifications. the recently announced proposal by the federal deposit insurance corporation, the office of the comptroller of the currency, and the federal reserve to modify cra exams is an example. in addition, the agencies constantly struggle to avoid unintended consequences, particularly to limit the extent to which our rules, as well as our compliance supervision, cause an undesirable change in credit availability or in bank behavior that undermines the objective of the rules. to be effective regulators, we must also attempt to balance the burdens imposed on banks with the regulations'success in obtaining the intended benefits and to discover permissible and more - efficient ways of doing so. because we understand that regulatory changes can be quite costly, we recognize as well the important regulatory responsibility to balance the cost of change with the desired benefits. but markets are not static, and changes must be made from time to time to fulfill the objectives