The head of the House Financial Services Committee is renewing his call to act on legislation to increase oversight of investment advisors, a bipartisan bill that stalled in the committee last month.

Writing in an op-ed in the Wall Street Journal, Rep. Spencer Bachus (R-Ala.), urged action on the Investment Adviser Oversight Act, a measure he introduced along with New York Democrat Carolyn McCarthy to address what he describes as a dangerous regulatory gap.

The bill would authorize at least one industry group to take on more of the burden of examining registered investment advisors, who are currently overseen by the Securities and Exchange Commission, which, by its own admission, is unable to perform advisor audits at a satisfactory rate. The SEC has estimated that it only examined 8% of advisors in 2011, and that 40% of advisors have never been audited.

"The investing public deserves better oversight of these professionals to whom they have entrusted their money and, in many cases, their retirement future," Bachus wrote.

Bachus' committee held a hearing on the Investment Adviser Oversight Act in June, signaling at the time that the measure could come up for a markup in fairly short order.

But consensus on the proposal was in short supply, and another member of the panel, Democrat Maxine Waters (Calif.), has since introduced rival legislation that would empower the SEC to collect user fees from advisors to increase its own examinations. Supporters of that approach argue that it is preferable to adding another level of regulation and compliance as the Bachus bill would by empowering a self-regulatory organization, most likely the Financial Industry Regulatory Authority (FINRA).

But Bachus countered that the SEC, even if it received the appropriations it has requested, would still be unable to achieve adequate oversight of advisors. In the op-ed, he cited Bernard Madoff and other high-profile advisors who were able to perpetrate massive frauds in part because of lax oversight, a deficiency he believes an SRO could resolve.

"This is the most practical way to address the weakness in the system," he wrote. Bachus argued that the alternative "approach ignores the SEC's poor track record leading up to the financial crisis. The SEC failed to protect investors and detect fraud even though evidence about the Madoff and [Allen] Stanford Ponzi schemes was handed to them by insider informants on a silver platter."

As a practical matter, the SRO-SEC debate has reached something of an impasse. While sources had indicated tentative plans to bring the Bachus bill to a markup this summer, late last month an aide to the chairman confirmed that the measure was on hold, telling Financial Planning that "until there is broader agreement on a bill, no bill will be able to move through the committee."

This week began the August recess in Congress, and members are not planning to return to session until September, at which point there will be only a small number of working days until the election, leaving a narrow window for movement on the bill.

Bachus and other supporters of the SRO approach have argued that industry members championing the SEC model are doing so as a stall tactic to avoid meaningful regulation. McCarthy, the Democrat who is co-sponsoring the bill, has said that she would be in favor of channeling additional resources to the SEC, but that in the current political and fiscal climate, the idea is a non-starter.