Federal Reserve Chairman Ben Bernanke said the central bank, responding to the subprime mortgage crisis, will propose rules this week to force lenders to tell consumers more about their loans sooner.

The Fed's proposed rules will "require earlier disclosures by mortgage lenders, so that consumers can get the information they need when it is most useful to them," Bernanke wrote in a letter last week to Rep. Brad Miller, D-N.C. "We will also consider the need for improved disclosures concerning mortgage brokers and how they are compensated."

Tomorrow, the Fed board will unveil and comment on a draft of rules designed to protect high-cost mortgage borrowers from abusive lending. The central bank has authority to write consumer protection rules that apply to all lenders, and Congress has accused the Fed of lax enforcement.

The Fed's governors will vote on four proposals: limiting or banning prepayment penalties on high-cost loans, guidelines on how lenders should determine repayment ability, limits on the use of low-documentation loans, and requiring the inclusion of escrow for taxes and insurance in subprime mortgage payments.

Randall Kroszner, the governor with responsibility for banking regulation, spoke in favor of the escrow requirement in an address last month.

In his letter to Miller, Ber-nanke wrote that the Fed is aiming to protect consumers without cutting off credit.

"The board's proposal will be based on detailed analyses of the issues and our statutory authority to address them, and will attempt to adequately protect consumers while maintaining responsible lending markets," Bernanke said.

Congressmen from both the Senate and House committees that oversee the Fed have written letters in the past month urging action, as have groups such as the AFL-CIO labor federation.

House Financial Services Committee Chairman Barney Frank, a Democrat from Massachusetts, and other members of his party last week asked Bernanke for "meaningful and lasting improvements."

Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat, sent a similar letter Dec. 7.

Both Dodd and Frank have introduced legislation to strengthen consumer protection, such as restricting prepayment penalties, to override the Fed's decision if legislators aren't satisfied.

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