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

ms. rivlin discusses the federal reserve ’ s role in the payments system remarks by the vice - chair of the us federal reserve system, ms. alice m. rivlin, at the bank administration institute ’ s symposium on payments system strategy in washington, d. c. on 9 / 28 / 98. the federal reserve ’ s roles in the payments system this is an exciting time to have a conference on payment system strategies, because there are real opportunities for rapid change over the next few years in the way we make payments, especially retail payments in the united states. you will be discussing some of those opportunities and possibilities over the next few days with experts on the forefront of change. you will hear presentations that describe new worlds in which payments are made more efficiently, more conveniently, with greater security and less fraud than they are now - - not just by giant corporations and sophisticated techies, but by ordinary folks and average enterprises going about their daily activities. but while there are opportunities and possibilities, there are also enormous uncertainties, both about the direction that technological change will take and about the willingness and ability of individuals and institutions to embrace these changes. it is certainly possible that a decade from now we will have a radically different retail payments system in the united states than we have now. it could be a system that depends very little on paper or on land and air transportation of paper messages. it could instead be one in which both consumers and businesses, not to mention governments, make almost all of their payments by electronic means from wherever they happen to be. on the other hand, it is also possible that not much will happen to retail payments over the next decade or at least that change will not accelerate from its current pace. some of the people in this room could be back here in ten years assessing why the promising innovations of the late 1990 ’ s never came into general use, and why, although credit, debit and automated clearinghouse ( ach ) payments continued to expand rapidly, billions of paper checks were still being written and physically transported for presentment. in part - although only in part - the outcome depends on us, on the people in this room, and the enterprises and institutions we represent. it depends on how effectively and imaginatively we all do our individual jobs and on whether we find constructive ways to work together. i happen to be one of those who thinks change in retail payments could accelerate quite rapidly in the next few years and that paper check volume could begin to