The debate over the Bush administration's ambitious plan to restructure the financial services industry is becoming less a debate over lofty public policy objectives than an old-fashioned turf battle between House committees.

In one corner stands Rep. John D. Dingell, D-Mich., who has built the Energy and Commerce Committee, of which he is chairman, into perhaps the most powerful in the House.

On the other side of the ring is Rep. Henry B. Gonzales, D-Tex., the sometimes eccentric, but tough-minded, chairman of the House Banking Committee.

In typical expression of their disagreement, the Energy and Commerce

Committee on Wednesday voted 26-15 against an amendment to let nonfinancial companies buy troubled or failed banks. The Banking Committee, in line with the Bush administration, supported the mixing of banking and commerce.

The stakes in this jurisdictional battle may be as high for the banking industry as for the internal politics of the House.

Over the years, bankers have achieved a level of comfort with the Banking Committee. But the Energy and Commerce panel is home port for the securities and insurance industries, which are often at war with banking.

Apprehensive Bankers

As a result, bankers believe that any increase in Energy and Commerce's influence over financial services legislation will come at the expense of their industry.

The tension between the two panels has gotten so great that many observers believe it will not only deal a death blow to the administration's current reform bill but also ensure deadlock on major banking legislation for years to come.

"It may even be better that way," said the American Bankers Association's chief lobbyist, Edward Yingling. He argued that bankers would prefer that no bill pass rather than have to live with one reflecting the antibank inclinations of the Energy and Commerce panel.

A Years-long Deadlock?

Thomas L. "Lud" Ashley, president of the Association of Bank Holding Companies, said "the jurisdictional battles would likely preclure congressional action for years to come" if the administration bill failed this year. But he said he still believes that the White House will get most of what it wants in 1991.

Since 1988, when Rep. Dingell singlehandedly torpedoed a Senate-passed bill that would have repealed the Glass-Steagall Act, the energy and Commerce Committee has cemented its hold on banking legislation at virtually every turn in the process.

"The Banking Committee now finds it very difficult to address, on its own motion, the most significant issues for the banking industry," said Richard Peterson, an aide to Rep. Doug Barnard, D-Ga.

Mr. Peterson has labored long and hard behind the scenes to build a consensus on the House Banking Committee for a faranging bill that would grant banks a broad range of powers.

Unexpected Successes

He succeded beyond almost everybody's expectations. The Banking Committee not only voted to repeal Glass-Steagall on terms favorable to the banking industry but also took the far more radical step of permitting commercial and industrial companies to own banks.

Yet that hard-won victory now appears likely to come undone at the hands of the Energy and Commerce panel.

Effect on Political Donations

One byproduct of the current standoff, said Mr. Peterson, will come into play in the next election as the banking industry decides where to put its political contributions.

"I think members of the Banking Committee, although aware of the assault on their jurisdiction, have probably not had time to think out the implications in terms of campaign finance," said Mr. Peterson. "And they are significant."

Other House committees also influence banking issues. The Ways and Means panel, for example, is involved in recapitalization of the Bank Insurance Fund, and the House Judiciary Committee, which has jurisdiction over antitrust law, could still try to set limits on how large banks with multistate operations may grow.

But the Energy and Commerce panel's ambitions run deepest and touch on the business areas bankers believe are essential to their future: insurance and securities.

SEC Oversight

The panel's jurisdiction over bank securities powers comes from its oversight of the Securities and Exchange Commission. Rep. Dingell has used that toe-hold to argue that his committee has the right to set the terms and conditions under which banks affiliate with securities firms.

During the 1980s, former Rep. Fernand J. St Germain, the Rhode Island Democrat who chaired the House Banking Committee, supported Rep. Dingell's jurisdictional claims. Rep. St Germain was closely allied with the securities industry, and he saw the partnership with the House Energy and Commerce Committee as a means of fending off efforts to broaden bank securities powers.

Rep. Gonzalez, who took over the Banking Committee in 1989, has tried to reassert the panel's prerogatives. He has not only argued for a preeminent role in the bank securities debate but also challenged the commerce panel's claim to authority over the insurance industry.

Assertion of Jurisdiction

Recently, he introduced legislation that would permit the Federal Reserve to open its discount window to well-capitalized insurance companies under some circumstances. In describing the bill on the House floor, Rep. Gonzalez noted in passing that "the Banking Committee's exclusive jurisdiction over the insurance industry" is provided for in the rules of the House.

"We've made no secret of the fact that we believe we have jurisdiction over insurance," said Jake Lewis, a spokesman for Rep. Gonzalez. "We have a subcommittee now with the word "insurance" in its name, and that's no accident."

Rep. Gonzalez created a new subcommittee on policy research and insurance shortly after becoming chairman.

Doubters on Gonzalez

But most observers doubt Rep. Gonzalez can make his claim stick.

"It's just never been that way," said Robert Rusbuldt, a lobbyist for the Independent Insurance Agents of America, which enjoys a comfortable relationship with the Energy and Commerce panel.

So far, Rep. Dingell's jurisdictional claims have been just that -- assertions that have never been tested. This may change as the administration bill heads to the House floor.

Crucial Decisions

First, the Democratic leadership and then the House as a whole must decide whose legislative handiwork is superior. Their choices will add to the legitimacy of the panel whose side they take.

For all the apparent strength of Energy and Commerce, Mr. Ashley of the Association of Bank Holding Companies said Rep. Gonzalez may end up on top.

"He's a fighter," said Mr. Ashley, a former congressman who was on the banking panel with Rep. Gonzalez. "And his idea of a fight is to be standing over someone, with his foot on his chest, after knocking him down."

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