WASHINGTON - A House panel working on legislation to freeze new regulations rebuffed the House Banking Committee's plea that safety and soundness rules be exempted from the moratorium.

A Government Reform and Oversight subcommittee voted 10-4 in favor of the regulatory moratorium Wednesday, drawing a sharp rebuke from House Banking Committee members.

"This just shows that the subcommittee is insensitive and not responding to the problems that could occur under the moratorium," said Rep. Bruce F. Vento, D-Minn.

"This is a mistake," Rep. Vento added. It shows how some committees are acting without full knowledge."

The Banking Committee on Tuesday proposed the additional language to protect regulations deemed necessary to maintain safety and soundness.

However, the Government Reform and Oversight subcommittee on national economic growth, natural resources, and regulatory affairs did not accept the proposal, and countered with language that directed the Office of Management and Budget to determine whether freezing a banking regulation would pose a threat to safety and soundness.

"The OMB proposal just demonstrates a misunderstanding of the independent nature of the banking agencies," Rep. Vento said.

According to a member of the Banking Committee staff, Chairman Jim Leach rejected the subcommittee's counterproposal.

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