WASHINGTON -- The issues dividing the House and Senate on interstate branching appear to have narrowed to a manageable few, but it is unclear whether lawmakers will meet this week to hammer out a final bill.

The timing is important. If the conference committee meeting is not convened this week, that could mean interstate will be delayed until after the August recess. And once Congress returns to work in September, the rush to adjourn will be on.

Tentatively, conferees are hoping to meet Thursday to discuss both the interstate bill and a separate measure dealing with community development financial institutions, regulatory relief for banks, and other issues.

Thorny Issues

But some congressional aides warn that a number of thorny issues remain which lawmakers may want settled before they meet in a public session.

Moreover, other events are intruding on the conference. Chief among them is the Whitewater affair, which is scheduled to be the subject of hearings later this month.

Aides on both sides of Capitol Hill say the upcoming inquiry has already begun soaking up staff time. By next week, some say, staffers will be too busy for almost anything else.

In addition to eating up time, the hearings, which focus on President Clinton's relationship with a failed savings and loan, could poison the atmosphere.

"The importance of getting these bills up before all hell breaks loose has not been lost on people," said Karen Shaw, president of the Institute for Strategy Development.

A Safe Bet

Still, Ms. Shaw said that she doubts the conference will take place this week. "With banking legislation, it is always wise to bet on things not happening," she added.

The most difficult issue awaiting resolution in the interstate bill involves the treatment of foreign banks.

The branching bill contains a measure requiring foreign banks to branch from a U.S.-based office. The issue is linked to one in the community development bank bill that calls on the administration to retaliate against countries that discriminate against U.S. banks.

If the fair trade in financial services bill, sponsored by Senate Banking Committee Chairman Donald W. Riegle, D-Mich., is included in the final version of the development bank bill, it would likely lead to a compromise on foreign bank branching.

Because the two issues are linked, the Senate is insisting that the development bank bill be completed before interstate.

Time Limits on Lawsuits

Also up in the air is a Senate provision giving the Federal Deposit Insurance Corp. and the Resolution Trust Corp. more time to sue officers and directors of failed institutions.

The House Judiciary Committee is floating a compromise that would retain the provision, but only for the most serious cases of fraud and abuse.

Another provision, overturning a court decision that struck down the Texas ban on home equity loans, will likely be debated during the conference by two lawmakers from that state.

House Banking Committee Chairman Henry B. Gonzalez, D-Tex., sponsored the measure and will defend it. Sen. Phil Gramm. R-Tex., will oppose it.

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