WASHINGTON - The House Banking Committee gained an important ally last week when Speaker Newt Gingrich warned a rival panel to exercise restraint in reworking Glass-Steagall legislation.

The letter, which Rep. Gingrich sent to Commerce Committee Chairman Thomas J. Bliley, R-Va., is a rare show of support for the banking committee from the House leadership.

In past years the Commerce Committee had been aggressive in seeking jurisdiction over bank securities issues, often with tacit support from the leadership. The Commerce Committee was widely viewed as more friendly to securities than banking, and bank lobbyists viewed it as an impediment to new powers legislation.

Bank lobbyists viewed the letter as a clear indication that the House leadership places a high priority on the passage of a modernization bill. John Rippey, legislative director for the Bankers Roundtable, said the letter was a sign the atmosphere between the panels has changed.

"Gingrich is saying, congratulations, we are going to make the Republicans look good here, but he is also throwing a brick at the old John Dingell ploy," Mr. Rippey said, referring to Rep. John D. Dingell, the Michigan Democrat who chaired the Commerce Committee until the Republican takeover.

"They are showing by word and deed that things are truly different in this Congress."

Others saw the letter as a caution to the leadership of the Banking and Commerce committees to step carefully when crafting any compromise between the banking and the insurance industries.

"Leadership is really applying the pressure to Leach and Bliley not to let insurance issues block this legislation," said Ron Ence, chief lobbyist for the Independent Bankers Association of America. "Speaker Gingrich wants to make sure the Commerce Committee doesn't go hog wild on this bill."

Although the Gingrich letter appeared to be a warning to the Commerce Committee as a whole, it was aimed specifically at Rep. Dingell, now the panel's ranking minority member.

"I would request that you resist efforts by the minority to rewrite matters within banking's jurisdiction through the 'back door,'" Speaker Gingrich wrote. "The Commerce Committee, under the former chairman, used the legitimate referral of securities-related matters in Glass-Steagall to encroach upon the Banking Committee's legislative efforts."

The House Banking Committee referred the Glass-Steagall bill, which it approved earlier this month, to the Commerce Committee for a month. Speaker Gingrich said Rep. Leach agreed to extend that referral by six days, to June 22.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.