House OKs Shift of Securities Oversight to Banking Panel

In a move Democrats say weakens Congress’ ability to safeguard investors, the U.S. House agreed to establish a new Financial Securities Committee that will oversee securities markets, the insurance industry and banks.

By a 215-206 vote, the House shifted oversight of brokerages, accounting firms, securities markets and the Securities and Exchange Commission from the Commerce Committee to the Banking Committee, which will get a new name.

New York’s Rep. Edolphus Towns, top Democrat on the Commerce subcommittee that oversaw securities, objected to the change.

“The Banking Committee has no expertise in the areas of securities and finance,” he said. “I mean none, zippo, none.”

Republican Mike Oxley of Ohio is running against Marge Roukema of New Jersey to head the new panel. Republicans will pick chairmen of that committee and the tax-writing Ways and Means Committee today. The new Financial Services panel reflects the broader integration of banking, securities and insurance businesses, epitomized by New York-based Citigroup. This integration is being propelled in part by a 1999 law that allowed these industries to combine more freely. Previously, they were kept separate by the Depression-era Glass-Steagall law.

“Now, it’s even more important because of passage of the Financial Services Act,” said Rep. David Dreier (R-San Dimas), who championed the new panel.

Lobbyists for the banking, securities and insurance industries favor the new committee, saying it will consolidate expertise on financial markets in one committee, making it easier to educate Congress on complex subjects.