(Reuters) - U.S. Federal Reserve Chair Jerome Powell said Tuesday that is the "strongly held" view of the Fed board that bank regulators should seek additional feedback on a contentious effort to hike bank capital, a move that had been sought by the industry.

Powell said the Fed, Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency had made significant progress on refining the so-called "Basel III Endgame" proposal, which would overhaul how larger banks gauge risk and how much capital they should hold.

But he said the agencies were still working through how to proceed with the effort, and whether to finalize the rule so it can take effect or take time to solicit more feedback. Powell endorsed the latter, while noting the other agencies were not yet in agreement on that approach.

"My view, the strongly held view of members of the board, is that we do need to put a revised proposal out for comment for some period," he told the Senate Banking Committee. "When there are broad material changes, that has been our practice."

Powell's comments confirm Reuters reporting in June that regulators were split on how to proceed with the rule, with the Fed open to a reproposal while the other two agencies opposed it, seeing it as an unnecessary step that could delay the project with a presidential election just months away.

Banks, which fiercely opposed the original proposal that would hike capital requirements for larger banks, have been calling for a reproposal. Regulators have been working for months on revising the plan in a way that could significantly curtail the capital impact for larger firms.

Powell did not detail how or when regulators might settle the process question, but said if they do repropose, it likely would not be an abbreviated effort.

"It will take some time," he said.