Washington - The House Banking Committee is expected to get broad jurisdiction over bank securities activities that could give it new power to review legislation affecting securities exchanges as well as banks, sources said Friday.
Republicans who now control the House have added new language to a rule dealing with committee jurisdictions that would give the banking panel jurisdiction over "bank capital markets activities generally," the source
Another new clause would give the committee jurisdiction over "depository institution securities activities generally, including the activities of any affiliates, except for the functional regulation of broker-dealer activities not involving safety and soundness."
The language would give the banking committee, to be called the House Committee on Banking and Financial Services, the ability to seek sequential referral of many securities bills passed by the House Commerce Committee that it would not normally have reviewed in the past, such as securities litigation reform legislation, a congressional source said.
However, "it will take time" to figure out exactly how the new clauses will be applied, the source said. The rule changes still must be approved by the House Republican conference.
In line with the rule change, a new banking subpanel is expected to be formed, called the subcommittee on capital markets, securities, and government-sponsored enterprises, that would have jurisdiction over bank capital markets, derivatives, all activities of housing-related government-sponsored enterprises, and other areas.
The new capital markets panel is expected to be chaired by Rep. Richard Baker of Louisiana.
Rep. Doug Bereuter of Nebraska is expected to chair another premier banking panel, the subcommittee on housing and community development, a committee source said.
Rep. Marge Roukema of New Jersey said last week she will chair the subcommittee on financial institutions, supervision, regulation, and deposit insurance.
Roukema said last Thursday that "a sound system of banking and credit is vital to a sound economy, and I will do all I can to ensure that the system runs smoothly."
The House Banking Committee's consolidation of power over bank capital markets activities means the House Commerce Committee's power over securities issues may erode over time, sources said. The panel, formerly called the House Energy and Commerce Committee, already has ceded most of its jurisdiction over Glass-Steagall reform to the banking panel after decades of equally sharing that power.
However, the securities industry is expected to lobby heavily to remain under the jurisdiction of the more sympathetic commerce panel.
The incoming chairmen of the banking and commerce panels, respectively Rep. Jim Leach of Iowa and Rep. Thomas Bliley Jr. of Virginia, had reached an agreement with the Republican leadership last month to give the banking committee sole jurisdiction over Glass-Steagall reform, which would including letting banks underwrite municipal revenue bonds.
But the securities industry mobilized a heavy lobbying effort that helped the commerce committee retain a limited right to review for 30 days any Glass-Steagall measure affecting insurance or securities passed by the banking committee.
Meanwhile, questions still remain on subcommittee jurisdictions and membership in the House Commerce Committee, but some answers were shaping up by the end of last week.
Rep. Jack Fields of Texas is expected to chair the commerce committee's subcommittee on telecommunications and finance, which will make him a key lawmaker for the municipal finance industry.
A spokesman for Fields could not comment on his expected leadership of the commerce committee panel or on his agenda.
But Micah Green, executive director of the Public Securities Association, said, "We have worked extensively with Congressman Fields over the last several years" on securities issues. "Not only does he have the knowledge and understanding about the marketplace, but he also puts a very high priority on ensuring that the level of regulation is sufficient to protect investors without unnecessarily disrupting the liquidity in the marketplace, Green said.
"He's really a good friend of the industries and I trust his concern about overregulation and unnecessary regulation of the marketplace will be very well received by the marketplace," Green said.
Jurisdiction over environmental issues, which is split between the commerce panel's subcommittees on health and the environment and on transportation and hazardous materials, is expected to be combined in a new panel that is yet to be named and is expected to be chaired by Rep. Michael Oxley of Ohio.
Flow control legislation will be addressed early in the next Congress under Oxley's leadership, an Oxley spokeswoman said. Legislation addressing interstate waste shipments, Superfund, and reauthorization of the Resource Conservation & Recovery Act also is expected to be addressed early. But the spokeswoman could not comment on reauthorization of the Safe Drinking Water Act, which also is expected to come under Oxley's purview.
Flow control, which refers to the ability of localities to dictate where local municipal waste is to be sent for disposal, is a problem in Oxley's state. Oxley this year voted for a flow control bill Chat PSSA and state and local interests supported.
The commerce committee's current subcommittee on commerce, consumer protection, and competitiveness probably will be dropped because of a new GOP House rule allowing committees to have only five subcommittees, sources said.
Similarly, the banking committee is expected to drop its subcommittee on consumer credit and insurance.
The House Republican Conference on Friday announced Republican committee assignments, and it was expected to complete work on general subcommittee restructuring and jurisdictions possibly late Friday but more probably this week.
Republican assignments on the banking and commerce panels are:
House Banking and Financial Services Commttee: Reps. Leach, chairman; McCollum, Fla.; Roukema; Bereuter; Roth, Wis.; Baker; Lazio, N.Y; Bachus, Ala.; Castle, Del.; King, N.Y.; Royce, Calif.; Lucas, Okla.; Weller, Ill., Hayworth, Ariz.; Metcalf, Wash.; Bono, Calif.; Ney,. Ohio; Ehrlich, Md.; Barr, Ga.; Chrysler, Mich.; Cremeans, Ohio; Fox, Pa.; Heineman, N.C.; Stockman, Texas; Lo-Biondo, N.J.; Watts, Okla.; and Kelly, N.Y.
House Commerce Committee: Reps. Bliley, chairman; Moorhead, Calif.; Fields; Oxley; Bilirakis, Fla.; Schaefer, Colo.; Barton, Texas; Hastert, Ill., Upton, Mich.; Stearns, Fla.; Paxon, N.Y.; Gillmor, Ohio; Klug, Wis.; Franks, Conn.; Greenwood, Pa.; Crapo, Idaho; Cox, Calif.; Burr, N.C.; Bilbray, Calif; Whitfield, Ky.; Ganske, Iowa; Frisa, N.Y.; Norwood, Ga.; White, Wash.; and Coburn, Okla.
