WASHINGTON - Lack of support in the Senate and the threat of a presidential veto are prompting House Banking Committee Chairman Jim Leach to yank controversial Community Reinvestment Act provisions from banking legislation due to be voted next week.

The Iowa Republican struck a deal with House leaders recently to package Glass-Steagall repeal and regulatory relief legislation, but the CRA changes are being stripped, according to committee aides.

The CRA provisions likely to be dropped from the Glass- Steagall/regulatory relief package include:

*Exemption for bank holding companies with assets less than $100 million.

*Self-certification provisions for banks with assets between $100 million and $250 million.

*A safe harbor prohibiting application protests for banks with satisfactory or outstanding CRA ratings.

*Separate CRA standards for "special purpose financial institions" such as wholesale banks, credit card banks, and trust institutions.

A House Banking committee staff member said Rep. Leach remains committed to the CRA changes and will continue to push for similar alterations in the massive budget reconciliation package.

That strategy will increase the odds that Glass-Steagall and regulatory relief can pass the House, staff members said. The move, according to Rep. Leach's staff, may even improve CRA reform's chances by attaching them to a deficit-cutting budget bill, which Capitol Hill Republicans vow to support despite a presidential veto threat.

Kenneth Guenther, executive vice president of the Independent Bankers of Association of America, said his group is disappointed the CRA changes will not be in both bills. "We strongly support the two-track system. We feel the package that will be presented on the House floor has decreased in attractiveness to commercial bankers."

House Banking staff members said Rep. Leach may not strip all CRA provisions from the regulatory relief package, though the legislation is still being written. Mr. Guenther said he is hopeful some will remain, including:

*CRA credit for loans to all targeted demographic groups, even if they are outside a bank's local community.

*Prohibitions on additional reporting requirements.

*Clarification of existing law to require separate CRA evaluations for each metropolitan area only for banks with multistate branches.

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