WASHINGTON — A day after the release of regulatory data that showed the worst decline in lending in 67 years, lawmakers pressed Federal Reserve Board Chairman Ben Bernanke Wednesday on what he and the other agencies were doing to reverse the trend.

While defending the central bank's response, Bernanke also sought to turn it to his political advantage, arguing it is another reason why the Fed must retain its bank supervisory powers.

"We are trying to get more information to try to make sure that creditworthy borrowers are able to get credit," Bernanke told the House Financial Services Committee. "One of the reasons that we value our bank supervisory role is because it provides us with that information and gives us that ability to understand what's happening in that very important market."

Bernanke is likely to repeat the argument when he testifies today before the Senate Banking Committee. While a House regulatory reform bill approved last year would expand the Fed's supervisory abilities, the Senate is leaning toward stripping it of such power.

Nearly a month after Bernanke was confirmed to a second term by the slimmest margin of any Fed chairman, he appeared willing to grant lawmakers some concessions. During the hearing, Bernanke said he would support legislation for increased transparency at the Fed, including revealing the names of firms that used its special liquidity facilities.

"We are also prepared to support legislation that would require the release of the identities of the firms that participated in each special facility after an appropriate date," he said.

Bernanke later clarified that this disclosure would not include the identity of firms that borrow from the Fed's discount window, warning that doing so could prevent an institution from using the facility for fear of a public stigma.

Transparency is a key issue for the Fed. In the wake of the financial crisis, the House adopted an amendment last year that would force the central bank to submit to audits by the Government Accountability Office on all of its actions, including monetary policy decisions. Lawmakers and others have also pressed the Fed to reveal the names of companies that have used special facilities set up during the crisis to promote liquidity.

The hearing was the first time Bernanke had publicly voiced support for the idea, though he continues to oppose GAO audits of monetary policy moves.

Still, much of the hearing centered around lending, coming only a day after the Federal Deposit Insurance Corp. said that total loans had plummeted 7.5% during 2009. Bernanke said the Fed is addressing the issue through a combination of supervisory and monetary policy measures.

"I think one set of tools we have that we could continue to work on as regulators is to try to get credit flowing again," he said. "We're trying to do everything we can to make sure that creditworthy small businesses can get credit and that banks will be willing to take a second look at small businesses to make sure that they have access to credit."

Bernanke said the central bank has substantially increased its information-gathering for lending, noting that the 12 Reserve banks have been conducting summit meetings with small banks.

"We are actively going out and learning about the situation as best we can," he said. "It's very difficult because there will be some cases where, you know, tighter standards are justified because of the weakness of the economy and the weakness of the borrower's condition. We just want to make sure that when there is a creditworthy borrower that they can obtain credit."

But lawmakers blamed banks for refusing to extend credit and regulators for being too tough during examinations. Rep. Mike Castle, R-Del., said the agencies had not done enough to kick-start lending.

"Both the [Troubled Asset Relief Program] and the Federal Reserve have put a lot of money into banking institutions, primarily larger banking institutions," Castle said. "And the theory was that they're the ones who are going to lend to the other commercial banks who would then lend to the business people on Main Streets throughout America. And that somehow seems to have not connected."

During the hearing, Bernanke said he was most concerned about the impact commercial real estate losses will have on banks, calling them "probably the biggest threat at this point to our smaller and regional banks.

"If those banks have their capital depleted or if they go out of business, that's going to affect the supply of credit. And so that affects our economy as well."

Bernanke also briefly tackled the so-called Volcker Rule, which would ban proprietary trading at large banks as well as hedge fund and private-equity investments. Rather than a ban, Bernanke said regulators should have the discretion to limit activities on a case-by-case basis.

"You have to be careful that you don't inadvertently, for example, prevent a good hedging, which actually reduces risk, or that you don't prevent market making, which is good for liquidity," Bernanke said. "One possibility is that, if you were to go in this direction, would be to give some discretion to the supervisors to decide whether a set of activities is so risky or complex that the firm doesn't have the risk management capacity or the managerial capacity to deal with it."

While the Hill continues to tackle regulatory reform and whether the Fed should be granted systemic oversight, Bernanke said the central bank is already looking at broader risk for institutions and the financial system.

The Fed is developing an "enhanced quantitative surveillance program" for large bank holding companies, he said.

The program includes supervisory information combined with firm-level, market-based indicators and aggregate economic data, Bernanke said, toward the goal of providing a full picture of the risks facing institutions and the broader financial system.