that sector has found uses for consumer information and created an array of financial products and services unimagined even a few years ago. these developments, in turn, raise some new concerns, and have re - ignited some existing ones, among consumers and legislators. congress grappled with one of these issues, privacy, in the financial modernization law. concerns about abusive lending practices have also re - emerged of late. in all areas, but particularly in areas as sensitive as these, regulators should faithfully administer consumer protection laws as written. any necessary regulations should adequately inform consumers and protect them against abusive practices while also not discouraging legitimate extensions of credit, especially to those who might previously have been denied access to such credit. financial literacy will certainly play an important role in avoiding the growth of abusive or deceptive financial practices and in allowing consumers to protect their interests. i believe that legislation, careful regulation and education are all components of the response to these emerging consumer concerns. i also hope, however, that businesses recognize that it is in their long - term interest to maintain the confidence of consumers by avoiding deceptive and abusive practices and by respecting the privacy of their customers. finally, our payment system affects every consumer and business. this system too has been, and will continue to be, changed greatly by emerging technologies. from the time of its very founding, the federal reserve has had the responsibility to foster an efficient, safe and accessible payment system. during much of 1998 and 1999, our primary objective in this regard was to help banks and other participants in the payment system maintain smooth operations as the century date change passed. domestically, we achieved this goal by working directly with the banking sector. internationally, i was privileged to work through multilateral groups to raise the awareness of the international regulatory community of the nature of the y2k challenge. now, we can take a longer - term perspective and consider how we might facilitate innovation in the payment system. as an overseer and regulator, the federal reserve needs to approach payment system innovations with an open mind and a willingness to adapt. in a dynamic economy, markets need to play a key role in guiding the development of infrastructure. this means that innovation and competition will be central to the future development of the payment system – as they are in other areas of the economy. regulators should strive to remove barriers to innovations when we can do so without sacrificing important public policies. we should take every opportunity to foster competition and maintain the integrity of the payment system

, but public policy should not be built on a single vision or prediction of the future. ultimately, consumers and businesses as well as service providers will determine the range of payment services that best meet their needs. mr. chairman and members of the committee, during my years on the board of governors, i have done my best to contribute positively to all aspects of the federal reserve's many responsibilities. i look forward to the opportunity to continue to work with you and serve the nation as a member of the board of governors. thank you for your attention and for considering my nomination. i would be pleased to respond to questions.