House Republicans for the first time are taking steps toward imposing government oversight of the credit-rating industry, saying such legislation would foster competition among raters and protect investors against corporate meltdowns such as Enron Corp.'s.

The House Financial Services Committee's subcommittee on capital markets, insurance and government-sponsored enterprises is scheduled to hold a hearing Wednesday to discuss potential legislation.

Meanwhile, at the request of subcommittee member Paul E. Kanjorski (D-Pa.), the Securities and Exchange Commission has drafted an outline of regulatory measures that lawmakers could consider, although the SEC says it remains neutral on what should be done.

Some lawmakers have expressed impatience with SEC review of the industry, which began more than a decade ago and has been marked by occasional reports and studies but little regulatory action, even as the credit raters' power has grown. The rating companies give letter grades to corporations, municipalities and nations that want to borrow money by issuing bonds.

Congressional and other critics have raised questions about the big three credit raters -- Standard & Poor's, Moody's Investors Service and Fitch Ratings -- because they gave strong grades to Enron days before its collapse. Raters also have been criticized for getting the bulk of their revenue from the fees they charge to the entities they rate. And some companies have complained that a rater sometimes issues unsolicited ratings that they feel compelled to pay for.

The SEC has no formal authority over the credit raters, but has given five firms a national designation that has never been defined but is viewed by investors as the government's stamp of approval. Subcommittee Chairman Richard H. Baker (R-La.) and Rep. Michael G. Fitzpatrick (R-Pa.) have co-sponsored a bill that would expand the number of firms eligible for national designation. To be eligible, firms would have to be in business for at least three years, submit their books for inspection and publish their ratings publicly.

Under the bill, the SEC also would police conflicts of interest, anti-competitive practices and the potential misuse of non-public information. The bill calls on the Government Accountability Office to study the industry. Rep. Michael G. Oxley (R-Ohio), chairman of the House Financial Services Committee, said he supports Fitzpatrick's efforts.

Kanjorski, the subcommittee's senior Democrat, said reform is needed, but that he wants to study the SEC's work, which he requested in April from outgoing SEC Chairman William H. Donaldson. "I would certainly put a great deal of weight on their outline as a roadmap," he said.

The SEC staff said that if Congress wants to take legislative action, it could require rating firms to register with the federal agency and give it "broad authority" to adopt rules.

The SEC outline also would give the agency power to inspect raters' records and enforce its rules through administrative action or civil injunctions. But Annette L. Nazareth, the SEC's director of market regulation, said the agency has not taken a position on legislation.

Major raters, including Moody's, say there is no need for legislation because they have their own codes of conduct.