Regulators must promptly respond to bank customer credit abuses to prevent widespread harm to consumers, Federal Reserve Governor Sarah Bloom Raskin said in a prepared speech today.

She criticized bank overseers for failing to take swift and corrective action as often as they should, particularly with loan servicing problems.

“If banking practices are undermining the ability of the economically marginalized to become financially included and to access the credit they need in an affordable way, regulators must move in quickly to stop the disorder and repair the broken windows,” Raskin said.

The “broken windows” comment referred to urbanologist James Q. Wilson's theory that the most effective way to keep crime from spreading in a neighborhood is for the police to react quickly to the first sign of problems—even if it is only a broken window—or face losing the whole neighborhood as disrespect for the law rapidly spreads.

She also called on regulators to include input from community groups on bank exams and applications.

Raskin gave her remarks to the National Community Reinvestment Coalition in Washington, D.C.