The rival bank and insurance industries aren't calling a truce, lobbyists said Wednesday, even though House Banking Chairman Jim Leach dropped his contentious financial modernization bill to seek modest reforms instead.

Though Rep. Leach is betting that Republican leaders won't let his less ambitious bill get bogged down, insurance industry lobbyists said they will ask for a seven-month moratorium on the Comptroller of the Currency's ability to grant new insurance powers.

"There must be some sort of moratorium on the OCC," said Robert Rusbuldt, vice president of federal affairs at the Independent Insurance Agents of America.

But Edward L. Yingling, chief lobbyist for the American Bankers Association, said even a short-term moratorium would cause his group to fight Rep. Leach's new plan.

"We would totally oppose a bill with any moratorium," he said.

A five-year moratorium on the Comptroller's Office and other insurance restrictions were tacked on to Rep. Leach's bill last year, sparking an uproar in the banking industry that ultimately killed the legislation.

On Tuesday, Rep. Leach canceled his committee's vote on a sweeping financial modernization bill, after a year of negotiations failed to quell widespread opposition.

Instead, Rep. Leach asked House leaders to allow a vote on stripped-down versions of his Glass-Steagall repeal and regulatory relief legislation.

The new plan would give regulators more authority to expand powers for bank holding companies, but banks would be prohibited from affiliating with securities firms or insurance companies.

Staffers for Rep. Leach said the Iowa Republican has received no assurances that Republican leaders will allow a vote on the new plan or that additional insurance restrictions won't be added.

Also unclear are the plans of Senate Banking Committee Chairman Alfonse M. D'Amato. His committee passed its regulatory relief bill last year, but there's been no move to bring it the Senate floor. Nevertheless, an aide to a Democratic senator on the banking panel said chances for passing a banking bill have increased now that Rep. Leach has lowered his sights.

Industry lobbyists said Republicans are eager to enact a banking bill this year and predicted the insurance agents will have less power to tack on new constraints.

Republican leaders "have indicated to us they would be shooting themselves in the foot to hold up a bill over an insurance fight," Mr. Yingling said.

Rep. Leach's bill cuts a host of banking rules, and Republicans are eager to prove they can cut regulatory red tape, Mr. Yingling said.

Major provisions in the regulatory relief portion would:

- Permit bank holding companies with "satisfactory" or better Community Reinvestment Act ratings to make some bank acquisitions without Federal Reserve approval.

- Permit mergers of banks controlled by the same holding company without regulatory approval.

- Eliminate rules forcing bank holding companies that own thrifts to register as savings and loan holding companies with the Office of Thrift Supervision.

- Allow well-capitalized institutions with satisfactory CRA ratings to relocate some branches without prior approval.

- Allow well-capitalized institutions to invest in a branch's premises without regulatory approval.

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