WASHINGTON–A spokesman for a bond insurer today passed off a notice that the Securities and Exchange Commission is considering a legal action against the firm as merely “procedure.”

“This is a procedural development in an investigation that began more than 15 months ago and does not necessarily indicate any negative outcome,” said Tom Vogel, speaking for the Financial Security Assurance Holdings Ltd. “We intend to cooperate with the SEC,” he added.

FSA disclosed in a Feb. 7 SEC filing that it is among the companies that received a so-called “Wells Notice” from the SEC, which in addition to informing the firm of possible action against it gives the company an opportunity to respond.

Bond insurers have been under scrutiny from investigators and policymakers concerned about potential wrongdoing in the market and the impact it could have on municipalities.

FSA said in its filing that it “understands that it will have an opportunity to respond to the Wells Notice and to discuss the matter with the staff before any recommendation is made to the commission.”

While the regulatory investigation unfolds, the House Financial Services Committee has announced it will hold a hearing on the impact of the credit crisis on state and local governments and other municipal bond issuers next Wednesday.

The municipal bond insurers who qualify the offerings have had their operations called into question by rating agencies, which have called their outlooks negative as a result of involvement in backing subprime mortgage loan packages and other derivative issues.

A financial services subcommittee held a similar hearing last month, at which New York Governor Eliot Spitzer argued that virtually all involved parties, including regulators, were at fault in the crisis and that it should serve as a warning for those seeking a federal regulatory option for insurers.

In testimony before the subcommittee at the February hearing, Gov. Spitzer said that “some people say the federal government should be leading the effort” to probe the bond insurance industry. “But the facts are that insurance is regulated by the states and most of the bond insurance companies are domiciled in and primarily regulated by New York.”

The March 12 full committee hearing will focus specifically on the role played by credit rating agencies, the impact of monoline bond insurers, and what lawmakers can do to protect municipal bond issuers from economic problems that could lead to cuts in infrastructure spending or reduced services.

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SEC Probing Bond Insurers

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