Congress May Reform Funds, Shelby Insists

The chairman of the Senate Banking Committee said Tuesday that it was too early to write off congressional efforts to reform mutual funds.

At the end of his fifth public hearing on fund problems, Sen. Richard C. Shelby questioned talk on Capitol Hill that Congress, eyeing upcoming elections, would leave fund reforms to the Securities and Exchange Commission. “That would be premature,” the Alabama Republican said.

Shelby’s comments came as the co-sponsors of the Sarbanes-Oxley corporate-governance law said action by federal regulators could mean Congress won’t need to adopt sweeping legislation to address abuses in the mutual fund industry.

The SEC has “a whole staff that’s looking into it,” Sen. Paul S. Sarbanes (D-Md.) said. Rep. Michael G. Oxley (R-Ohio) said he didn’t see “a whole lot of momentum behind” a mutual fund bill in the Senate.