WASHINGTON - Industry representatives are complaining that a recent Federal Reserve Board proposal to dramatically increase the number of loans subject to the Home Ownership and Equity Protection Act would shrink credit in the subprime market, burden banks, and do little to rein in abusive lenders.

In comment letters to the central bank, critics said many institutions already avoid making loans that are covered by the 1994 law because it imposes stricter price limits and disclosure requirements than does the Truth-in-Lending Act on lenders that make high-cost, home-secured loans.

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