each employee, the rules create significant administrative problems and may conflict with state privacy requirements that restrict access to information concerning an employee's salary. although the rules also allow a bank to pay referral fees in the form of " points " in a bonus program, the rules require that any points awarded must not only be nominal, but also must be the lowest amount awarded for any product or service covered by the bonus program. thus, for example, the points awarded for a securities referral could not exceed the amount of points awarded for a safe deposit referral, even if the points awarded for the securities referral were nominal in amount. failure to address all exceptions or adopt cure or leeway periods the interim final rules also fail to address the scope of a majority of the exceptions to the definitions of " broker " and " dealer " that were adopted in the glb act. given the fact that the board believes that many of the sec's interpretations of the scope of the exceptions it has chosen to address do not comport with the unambiguous words of the glb act and the legislative intent of the congress, we are concerned about the manner in which the sec will interpret the other exceptions. the board fears that if the sec does not adopt rules concerning the scope of all of the exceptions, it will aggressively interpret some of the exceptions through enforcement actions and no - action letters, without banks and other members of the public having the opportunity to comment on these interpretations. the interim final rules also fail to provide any cure or leeway periods to banks that are attempting in good faith to comply with the exceptions when they discover that some of their securities transactions do not comply with the exceptions due to inadvertent errors or unforeseen circumstances. given the complexity of the exceptions, it is expected that banks that are attempting to conform their securities activities to the exceptions will identify some securities transactions that do not meet the terms of the exceptions. in some circumstances, banks will not even be able to confirm that their securities transactions will comply with an exception at the time they are conducted. for example, banks will not be able to confirm that they meet the " chiefly compensated " standard in the trust and fiduciary exception until they review all of their compensation earned at the end of the year. for these reasons, the board believes that the sec must provide banks that have adopted policies reasonably designed to comply with the exceptions a reasonable period of time to cure any inadvertent or unforese

banking issues and trends. let me pause here for a moment and say that improving communication doesn ’ t necessarily mean that the federal reserve and the csbs members will always agree. we won ’ t, and perhaps we shouldn ’ t. a diversity of views can be a strength. a robust discussion requires a thorough analysis of differing views, which leads to a more informed understanding of issues. this healthy give and take is the fourth reason for better communication : it leads to better outcomes. i will cite one example that i know is on the minds of many of you — the rulemaking process the agencies are currently engaged in on the community bank leverage ratio ( cblr ). here is an excellent example of where it makes good sense to consult closely. i know you have a lot of knowledge and expertise to bring to bear on this issue, which helps explain why congress has required the agencies to consult with the states. as you know, the fed and the other agencies are now gathering and evaluating comments on the cblr and getting feedback on this interagency proposal. so, now is a good time to re - engage. i am committed to re - engaging with you on the interagency proposal and ways we might be able to improve it. i am eager to hear your thoughts. i have one more reason for better communication, but first i will give you an idea of what i have in mind for that consultation. the formal means by which csbs and others comment on a rulemaking is important, but i think we would also all benefit from more informal, and more frequent contact. if you have an issue, if you have something to say, just pick up the phone. it is also my intention to be on the road a lot, visiting federal reserve districts and talking to bankers, consumers, and community groups. when i come to your state, i hope to see you, and i promise to make time to talk. 3 / 4 bis central bankers'speeches my final reason for better communication brings me back to a point i made at the outset : the united states needs a strong community - banking sector. we need strong community banks because they help support strong communities. strong communities are the building blocks of a strong nation. they provide safety, education and economic opportunities, and help define the values we hold dear. community banks are vital to the success of communities. they help us save and plan for a better future. the credit they extend helps preserve farming as a way of life for american