in late - 5february 2020 when covid was starting to spread globally, i had a startling realization that these are the moments we are here for, when communities around the country rely on us to act. with a shocking 20 million americans laid off from their jobs in one short month, with u. s. stock market capitalization down by 12 percent in one day, with main street businesses shuttering and 94 percent of classes moving to distance learning, it was vital to respond with boldness and creativity as we committed to using all our tools to provide vital support for communities around the country. in contrast to the devastation wrought by the inaction in the lead - up to the great depression, the covid response showed that swift, decisive action can stave off catastrophe. when there is the will to do so, with the support of congress, we can and must use our tools to help protect families, businesses, and their communities from crisis and make the broader economy more resilient so it rebounds faster. the second example is of augustus hawkins, a black congressman who in the 1970s was a key architect of the statute enshrining the words “ full employment ” in the federal reserve ’ s mandate along with price stability. he knew that only with maximum employment would there be true opportunity for workers of all races, ethnicities, and genders. every day, i am mindful that the opportunities and prosperity of working people all across the country rest in part on our commitment to the prosaic words “ maximum employment and price stability, ” which, like policy work itself, belie the enormity of their effect. maximum employment and stable low inflation benefit all americans but are particularly important for those earning less. price stability is of greatest importance for lower - income families because they spend more than three - quarters of their paychecks on - 6essentials like groceries, gas or bus fare, and rent — more than double the 31 percent spent by higher - income households. high inflation is our most pressing challenge. that is why we are taking strong actions that will bring inflation back down. the third example took place 45 years ago, when civil rights leaders, banks, and community groups worked together with leaders in congress to enact the community reinvestment act ( cra ). to address the damaging legacy from redlining — the practice of restricting access to credit in neighborhoods, often on demographic grounds — congress assigned banking regulators with the responsibility to ensure banks serve the credit

- faster evaluation of creditworthiness, identification of prospective borrowers, and management of existing accounts. all these developments had their positive aspects, including for people in low - and moderateincome communities. prior to the introduction of the cra, as you know, many of these communities had limited access to mortgages and other forms of consumer credit. subsequent innovations in financial products and services, processes, and technology helped at least some underserved consumers more fully enter the financial mainstream, save money, invest, and build wealth, and homeownership rates rose significantly. yet with hindsight, we can see that something went wrong in recent years, as evidenced by the currently high rates of mortgage delinquency and foreclosure, especially in minority and lower - income neighborhoods. indeed, we have come almost full circle, with credit availability increasingly restricted for low - and moderate - income borrowers. and the damage from this turn in the credit cycle – in terms of lost wealth, lost homes, and blemished credit histories – is likely to be long - lasting. one would be forgiven for concluding that the assumed benefits of financial innovation are not all they were cracked up to be. a number of factors explain the recent credit boom and bust, including problems stemming from financial innovation. from a consumer protection point of view, a particular concern has been the sharp increase in the complexity of the financial products offered to consumers, complexity which has been a side effect of innovation but which also has in many cases been associated with reduced transparency and clarity in the products being offered. i will illustrate the issue in the context of some familiar forms of consumer credit : credit cards, mortgages, and overdraft protection. credit cards, mortgages, and overdrafts : some instructive examples the credit card is an example of financial innovation driven by technological advance, including improvements in communications, data management, and credit scoring. when the first general - purpose credit card was issued in 1952, it represented a way to make small loans more quickly and at a lower cost than the closed - end installment loans offered by retailers and finance companies at the time. moreover, this form of credit doubled as a board of governors of the federal reserve system ( 2007 ), report to the congress on credit scoring and its effects on the availability and affordability of credit, ( washington : board of governors, august ). means of payment. card issuers benefited by spreading fixed costs over multiple advances of credit