WASHINGTON - The regulatory relief bill's defining moment may come today as House Republican leaders gather to decide the legislation's destiny.

House Speaker Newt Gingrich wants the bill's problems worked out before it comes up for a vote on the House floor. To that end, the Georgia Republican has called a meeting today of the chairmen of the three key committees - Banking, Commerce, and Rules.

At the meeting, the GOP vanguard is likely to make the final call on whether to include a controversial provision that would permit banks to affiliate with insurance companies in states that allow it.

The measure, added to the bill by Rep. Richard Baker, R-La., would spark a firestorm on the House floor.

"What the leadership wants to prevent more than anything else is forcing the House Republicans, particularly the freshmen, to take sides in a bitter internal dispute between the banking and insurance lobbies," said Kenneth A. Guenther, executive vice president of the Independent Bankers Association of America.

Mr. Guenther predicted the bill would encounter "smooth sailing" if the Baker amendment were dropped.

House leaders may indeed ax controversial provision, sources said Friday.

Speaker Gingrich already has made it clear that he wants the insurance industry pacified. In fact, last month he instructed House Banking Committee Chairman Jim Leach to find a way to mollify the insurers. Rep. Leach responded by inserting language that would block the Comptroller of the Currency from expanding insurance powers for national banks.

The delicate balance achieved by Rep. Leach's amendment was destroyed by Rep. Baker's affiliations provision, added during House Banking's deliberations on the bill last month.

The Baker amendment caused the Independent Insurance Agents of America, as well as the IBAA, to turn against the bill.

In a July 7 letter to House Banking Committee Chairman Jim Leach, Mr. Guenther added that the IBAA now also opposes the Glass-Steagall bill, which will be brought to the House floor in tandem with the regulatory relief measure.

"Now that the Baker amendment has been added to the regulatory relief bill, what you stopped from going in the front door of the bank powers bill was added through the back door on a bill that has nothing to do with bank powers," Mr. Guenther wrote.

The regulatory relief bill, sponsored by Rep. Doug Bereuter, R-Neb., would scale back a number of banking regulations and consumer protection laws - from the Community Reinvestment Act to the Truth-in-Lending Act.

However, other industry sources argued Friday that the Republicans may retain the Baker amendment because it fits the GOP philosophy of handing power back to the states.

"What could be a more forceful argument for the bill than saying Congress is going to let bank holding companies operate insurance companies consistent with state law," one bank lobbyist said.

Keeping the Baker provision in the bill also may encourage Senate Banking Committee Chairman Alfonse M. D'Amato to take up the measure "sooner rather than later," he added.

The two banking bills - Glass-Steagall repeal and reg relief - was originally expected to reach the House floor this summer. However, it is now unlikely to see floor action until September.

The Commerce Committee may slow down the process by asking for time to amend the regulatory relief bill.

However, House Banking is trying to keep the bill away from Commerce.

Banking Committee staffers are working on the final version of the bill, incorporating the numerous amendments added during the panel's marathon markup last month. Sources said the aides are trying to keep the language as narrow as possible to avoid a referral to Commerce.

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