WASHINGTON -- President Clinton rode into office in 1992 with a Democratically controlled Congress and a pledge to reform the Community Reinvestment Act.

Now, two years later, his plans for CRA reform are moving forward, albeit without a Democratic House and Senate.

That political change is likely to delay some of the more controversial aspects of Mr. Clinton's reform agenda. But, the thrust of the President's CRA proposal -- more lending, less paperwork -- will likely take effect in 1995.

"We will have a rule out and it will be implemented," Federal Reserve Governor Lawrence B. Lindsey said of the CRA proposal under consideration by the banking agencies.

The agency plan will replace a 12-point test that gives equal weight to meetings and lending with a three-pronged analysis that bases half a bank's grade on lending. The new test, which also looks at investment and service to the community, gives examiners more discretion in determining whether banks are meeting the needs of their communities.

Regulators also likely will approve a streamlined exam for banks with less than $250 million of assets, a strategic plan option that allows institutions to design their own CRA test, and a special test for wholesale banks.

The Republican takeover of Congress throws some other parts of the CRA plan into question, banking and community advocates said.

"There is no doubt in anyone's mind that CRA-related issues will be dealt with," a spokesman for House Banking Committee Chairman Jim Leach, R-Iowa, said of Congress's 1995 agenda.

Many expect proposed data reporting requirements for small business loans to top that agenda. The agencies are proposing that the largest banks report the race and sex of these borrowers. Mr. Lindsey and others question what purpose the data would serve and if the information would invade borrowers' privacy.

The House Banking Committee's concern with the proposed requirement could cause the agencies to drop it from the rules. That would be just fine with many banking advocates, who predict industry success on CRA next year.

"I'll say it will have been a good year," American Bankers Association agency relations director James McLaughlin said. "The streamlined exam for small banks has saved oodles of time. And, the race and gender data requirements will have been defeated, and banks will be looking at the strategic option plan."

Matthew Roberts, special counsel to the comptroller, said bankers shouldn't rule out new data reporting requirements just yet.

"I think bankers will have to be gearing up for expanded reporting requirements," Mr. Roberts said. "But, I stress that everything is still being considered."

While debate over CRA rules will dominate the Washington scene, bankers and community activists said results outside the capital will be different.

"I think that CRA and the involvement of financial institutions in marginal communities is going to be needed more than ever," National Community Reinvestment Coalition president John Taylor said.

And, more and more banks will step forward to work with community groups to address those needs, NationsBank vice president Cathy Bessant said.

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