Bernanke says let market guide lending practices

Rules should be a last resort for addressing subprime

The Federal Reserve is considering using its rule-making authority to ban some mortgage lending practices as unfair and deceptive, but would prefer to issue guidelines and improve disclosures lenders provide to borrowers.

That’s according to Federal Reserve Chairman Ben Bernanke, who delivered his most extensive comments on problems in subprime lending in a speech today at a conference in Chicago.