Get ready for a dogfight over who will regulate bank mutual fund activities.

Leaders of the House Energy and Commerce Committee have weighed in with a bill that expands the Securities and Exchange Commission's authority over banks in the mutual fund business.

The bill, introduced by Chairman John Dingell, D-Mich., differs significantly from a rival proposal penned by the House Banking Committee chairman, Rep. Henry Gonzalez, D-Tex.

The Gonzalez bill emphasizes disclosure and puts strict limits on employees who sell mutual funds.

Rep. Dingell's bill takes a different tack, requiring all banks that sell mutual funds and other securities to set up brokerdealer affiliates that the Securities and Exchange Commission would oversee.

That requirement could throw cold water on programs at small banks that don't have brokerage units, said Diane Casey, executive director of the Independent Bankers Association of America.

"This could unnecessarily keep small banks out of the business and prevent them from adequately serving their customers," Ms. Casey said.

Small banks could look into using outside marketing firms to meet the provision, banking attorneys said.

Rep. Dingell's bill would also require banks that advise mutual funds to register with the SEC under the Investment Advisers Act of 1940. This would increase securities regulators' oversight of bank securities operations.

The Dingell bill drew immediate howls from the American Bankers Association, which sees the proposal as all sizzle and no steak.

"If you're going to regulate banks like securities firms, then give them the same power - like underwriting securities - that these firms have," said Chris Rieck, a spokesman for the trade organization.

The disparities between the Gonzalez and Dingell bills may prove to be a blessing for bankers who aren't happy with either proposal. "It may have an inhibiting effect on getting anything through" Congress, said Charles Horn, a partner at Mayer, Brown & Platt, Washington.

In fact, the Gonzalez and Dingell bills have just one similiarity: prohibiting mutual fund names that are similar to the banks'.

Bank fund names are also a sticking point for new SEC Chairman Arthur Levitt.

He told a Senate Banking subcommittee last week that consumers may not be adequately protected under the SEC's rules for naming mutual funds managed by banks.

The agency ruled last spring that like-sounding names are "presumptively misleading." But the SEC said banks could overcome the problem by putting a sticker on prospectuses which explains that funds are not federally insured.

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