WASHINGTON — A top Federal Reserve official said yesterday that the central bank could have done more to prevent the escalating crisis in the subprime mortgage sector, as lawmakers told the Fed to use its broad power to clamp down on abusive lending.

"Given what we know now, yes, we could have done more sooner," said Roger Cole, director of the Fed's Division of Banking Supervision and Regulation. He added that the worst of the problems in the subprime sector — high-cost loans to consumers with impaired credit — didn't emerge until last year, when lenders stepped up use of risky adjustable-rate products.

The Senate Banking Committee hearing on the issue comes as dozens of subprime lenders have gone out of business and markets have soured on bonds backed by subprime loans. The carnage isn't over.

About 14 percent of $1.2 trillion in outstanding subprime mortgages are now in default. A million loans will adjust to higher rates and payments this year, and 800,000 more in 2008, says Sandra Thompson, director of the Federal Deposit Insurance Corp. Division of Supervision and Consumer Protection.

Federal regulators said many of the problems were at lenders they didn't oversee under the patchwork state-federal system.