A key lawmaker softened efforts to curb the powers of state securities regulators Thursday as he gained support for legislation to reform the $7-trillion mutual fund industry.
Rep. Richard H. Baker, the Louisiana Republican who has driven the House's legislative agenda on market reform this year, signaled new flexibility on the measure he filed months ago to boost Securities and Exchange Commission powers while limiting state regulators'.
Those efforts sparked fierce opposition by state officials, including New York Atty. Gen. Eliot Spitzer, who recently brought to light abuses in mutual fund trading and left the SEC looking slow-footed.
Democrats on Baker's subcommittee of the Financial Services Committee also had lined up firmly against any state curbs.
Looking to advance the SEC bill and his mutual fund reforms, Baker said after a Thursday hearing that he wanted an "accommodation" on state powers.
Aimed at forcing funds to disclose more about their fees and ties to Wall Street, Baker's bill was approved in July by committee but never was brought to the floor.
Baker said he and Financial Services Committee Chairman Michael G. Oxley (R-Ohio) want to hurry the bill to the floor.
House Republican leaders won't make a decision on that request until the middle of next week, but a leadership aide said, "Momentum is building to bring the bill to the floor."
Baker had wanted to bar state regulators outright from writing securities law that differs from federal statute -- a move state officials said would handicap them.
But Baker said Thursday that existing rules could stand if state officials promised to consult with the SEC on any actions affecting national market structure.