WASHINGTON -- The interstate branching bill, once on a fast track to enactment by Memorial Day, has suddenly slowed to a near halt. Though still expected to pass, it has moved from the spring schedule to the summer agenda.

And the delay makes it clear that branching isn't the slam dunk some observers thought it would be.

"There are some very difficult issues in that bill, and it's going to take some time for staff and members to work them out," said one congressional aide closely involved with the bill.

Conspicuous Omission

The bill has also been caught up in a number of other controversies. One involves the decision of House Banking Committee Chairman Henry B. Gonzalez, D-Tex.. to omit Rep. Floyd Flake, D-N.Y., from the conference committee that will negotiate with the Senate on interstate.

Rep. Flake is the only subcommittee chairman to have been left off the conference and the congressional Black Caucus, of which Rep. Flake is a member, has protested to House Speaker Thomas S. Foley.

A spokesman for Rep. Flake said the speaker expressed concern and is considering whether to add him to the conference. Although committee chairmen recommend conferees, it is the speaker who actually appoints them, usually following the recommendations of the committee chairman.

Pecking Order

A House Banking Committee aide said a decision was made to go with eight Democrats and five Republicans in order to include Rep. Joseph P. Kennedy 2d, D-Mass., whose subcommittee handled the Community Reinvestment Act provision in the bill.

Rep. Flake follows Rep. Kennedy in seniority, but to go down another step would have meant adding another Republican.increasing the GOP's strength on the committee.

However. Rep. Flake was reported to be livid over the slight, which follows a number of other run-ins with the chairman.

Also complicating matters, interstate has been caught up in the politics of two other bills: one dealing with community development financial institutions and another amending the Fair Credit Reporting Act.

The Senate passed its version of fair-credit reform by a wide margin. In the House, the bill has been held up as Rep. Kennedy looked for a way to recover ground lost to the financial services industry when the banking committee voted on it.

House Action

It appears now that the House will take up a fair-credit bill that closely resembles the Senate measure. But the banking committee leadership may insist on doing that bill before interstate.

The community development

bank bill is even more tightly linked to interstate.

House aides say they have been told by their Senate counterparts that interstate won't move until after the community development bill is finished.

The House version of that bill contains a controversial provision sponsored by Rep. Flake that makes some of the bill's money available to fund premium rebates for banks that lend money in low-income communities.

Rep. Flake has strong support on the House side, and it appears that he has a bare majority among the Senate conferees. But Senate Banking Committee Chairman Donald W. Riegle is thought to oppose the measure and some close observers believe he will hold up the interstate bill in an effort to jettison the Flake amendment.

Still, the issues in the interstate bill are tough enough by themselves.

State vs. Federal Control

One issue involves the applicability of state laws. The House bill treats branches of national banks as though they were state chartered, but the Senate bill treats them as national banks. under control of the Office of the Comptroller of the Currency.

A second issue involves foreign bank branches. The Senate bill requires foreign banks that want to branch interstate to do so through a U.S.-chartered institution, and that provision has both U.S. and foreign banks upset.

The U.S. banks fear they could end up facing similar requirements overseas.

Feelings are running high on both issues, and there's no easy way to compromise.

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