WASHINGTON - The chairman of the House Energy and Commerce Committee has turned up the heat on the Securities and Exchange Commission to investigate whether banks are illegally pressuring municipal issuers for a share of bond underwritings in exchange for providing letters of credit for such deals.

At the same time, Rep. John Dingell D-Mich., is continuing to push the SEC to decide whether bond rating agencies should be regulated.

In a letter last week, Rep. Dingell gave SEC Chairman Richard Breeden until July 31 to respond to his request that the SEC staff help the House panel draft legislation to regulate rating agencies.

Strings Attached to Credits

In another letter, Rep. Dingell gave Mr. Breeden until Aug. 14 to supply a report on whether some banks are using "trying" arrangements to force issuers into giving the bank a share of a bond underwriting in exchange for providing a letter of credit or other credit enhancement to back the deal.

Tying would occur when an issuer approaching a bank for a letter of credit or other credit enhancement is told the bank will provide the service only if the issuer makes the bank one of the underwriters in the deal. The practice is specifically barred by the Bank Holding Company Act of 1970.

Rep. Dingell's letter came in response to two speeches last spring by SEC Commissioner Richard Roberts, who told the Bond Club of Virginia that he had been receiving complaints about alleged bank tying. Mr. Roberts said he would seek regulations, if necessary, to block such practices.

Mr. Roberts said private lawsuits were rarely filed over these violations, partly because they are so hard to prove and because firms are reluctant to alienate bond issuers and lenders. He added that enforcement actions were rarely brought by regulators.

Warning on Rating Agencies

Mr. Roberts, in a speech before the Public Securities Association, also warned that rating agencies remain one of the only unregulated participants in the securities market.

He said the firms are generally doing an excellent job. He added, however, that given their proliferation and their enormous influence in the market, more formal standards are needed.

In a May 21 interview with The Bond Buyer, Mr. Breeden said the United States has managed without any statutes or additional SEC rules to develop the "finest rating agency capability in the entire world," and that he opposes Commissioner Roberts's proposal.

Views Promised

At that time, Mr. Breeden also said he would outline his views shortly in a letter to Rep. Dingell.

But Rep. Dingell said in his letter he has yet to receive a response from Mr. Breeden. He also said he would seek the views of the SEC's other commissioners on the rating-agency question.

If a vote were taken by the SEC on the issue this week, a dead heat could result because two commissioners favor additional standards for rating agencies while the other two current members oppose such a move.

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