WASHINGTON House Republicans are expected today to propose broadening the Banking Committees jurisdiction to include securities and insurance. A vote by the full House is expected as early as Wednesday. If approved, the expanded panel would be renamed the Committee on Financial Services.
Analysts agreed that passage of financial reform in 1999 was the catalyst for the change. This brings the financial committee in the House into the 21st century, longtime industry lobbyist Richard Hohlt said Friday. The defining event for this was Gramm-Leach-Bliley. That legislation really did streamline a lot of these businesses into one sector.
Karen Shaw Petrou, managing partner of the consulting firm Federal Financial Analytics, said, When the banking, securities, and insurance industries are indistinguishable, the old committee alignment really made no sense at all.
By shifting securities and insurance oversight to the Banking Committee, Republican leaders create a rationale for giving Rep. Michael Oxley the chairmanship.
House leaders have reportedly been looking for a role for Rep. Oxley, currently chairman of Commerces finance subcommittee, who is expected to lose his bid to succeed Rep. Tom Bliley as chairman to Rep. Billy Tauzin of Louisiana, who heads the panels telecommunications subcommittee. Commerce is also being renamed the Committee on Energy and Commerce.
Republican leaders apparently prefer Rep. Oxley at the helm of the new financial services panel over the two senior Banking Committee members vying for the job, Reps. Marge Roukema, R-N.J. and Richard Baker, R-La. Its not a slam dunk that Rep. Oxley will get it, but it looks more likely now, Ms. Petrou said.
The House Rules Committee got the ball rolling Friday by recommending the change in jurisdiction, which would also move oversight of the stock exchanges to the Financial Services Committee.
Consolidating banking, securities, and insurance issues in one committee would also solve a longstanding problem for lobbyists and legislators alike: the collision of jurisdictions between the Banking and Commerce committees. In the past there were some legendary battles between Banking and Commerce, said Brian Smith, a partner with the Mayer, Brown & Platt law firm here. This ought to bring some efficiencies over time and certainly lead to less potential squabbling.
Chuck Chamness, vice president of public affairs at the National Association of Mutual Insurance Companies in Indianapolis, agreed. For years, every Glass-Steagall bill stopped at the Commerce Committee over opposition by the securities and insurance industries. So this obviously reconfigures the balance of power.
Its not as important as it used to be as many of the Glass-Steagall issued have been decided, Mr. Chamness said, but there are still many battles to be fought, including one we care about, and thats how insurance will be regulated.
Mr. Smith, whose clients include many large insurance firms, said the change would create some potential lobbying challenges for the insurance industry, which has traditionally focused much of its attention on Commerce. Unless they change some of the committee membership, an awful lot of the staff education and member education that the industry has done for years will be lost, he said.
Current House Banking Committee Chairman Jim Leach, R-Iowa, said through a spokesman that he supports expanding the panels jurisdiction. He said that after passage of financial reform, the move is the common-sense thing to do.
Robert N. Barsness, chairman of Prior Lake State Bank, Prior Lake, Minn., and former president of the Independent Community Bankers of America, said the Banking panel has been more responsive to community bankers. Based on previous history, that would seem to bode better for us. We felt we had a better ear for community banking in the Banking Committee, he said.
Certainly from an efficiency standpoint, having one committee to deal with makes it easier for those of us who have to lobby.