The fund industry is rallying its troops against a Congressional bill passed by the House of Representatives last week, the Wall Street Journal chronicled Thursday.

As reported by MFWire Wednesday, the ICI fears that the bill could lead the Federal Reserve to imposing standards that were meant for banks onto mutual funds.

The bill authorizes tightened regulations on any "financial-holding company" that poses "a grave threat to the financial stability or economy of the U.S." The Senate has yet to weigh-in.

The Pimco Total Return Fund, which has almost $200 billion in AUM, is a good example of a fund that would come under Fed supervision. Under the bill, the Reserve could prevent the fund from offering more shares for sale, or force it to sell holdings. 

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