WASHINGTON - Key House leaders appear ready to move legislation barring the Comptroller of the Currency from expanding bank insurance activities under the "incidental to banking" authority.

However, the vehicle for the "Comptroller's moratorium" will probably not be the Glass-Steagall bill, as many had previously assumed. Instead, House Banking Committee Chairman Jim Leach may try to add the measure to regulatory relief legislation that is a top priority for bankers.

"This is starting to emerge as a real possibility in the Banking Committee," said Karen Shaw, president of ISD/Shaw Inc.

The odds for Glass-Steagall legislation may have improved on Friday when House Commerce Committee Chairman Thomas J. Bliley said his panel would not attempt to amend the version of the bill passed by the Banking Committee. He had been considering amendments that would limit bank insurance powers.

Bank lobbyists view the Glass-Steagall legislation as useful but far from necessary, and the American Bankers Association and others have vowed to fight a bill that includes insurance restrictions.

But the price for an unamended, or "clean," Glass-Steagall bill may come in the form of the limits on the Comptroller of the Currency in the regulatory relief bill - a top industry priority.

Joe Belew, president of the Consumer Bankers Association, said his members badly want the regulatory relief legislation.

"It's a good bill, and we need it," he said. "But it would be very difficult to support the bill with a moratorium on it."

One key congressional aide said Rep. Leach would prefer to keep both bills free of insurance amendments. However, he said that political realities may dictate inclusion of a Comptroller's amendment to placate the powerful insurance lobby.

The prospect of either a Comptroller's moratorium or a separate amendment giving states broad authority to limit bank insurance activities worried industry supporters.

Banks "are beginning to feel that they have been sucked into a situation over which they don't have any control," said Ms. Shaw, whose firm tracks bank legislation and regulation. "If they can't block this, it's bad news for banks."

However, one industry lobbyist expressed optimism that bankers can block a bill they oppose.

"I think the Congress would be hard pressed to pass a bill that is supposed to be a banking reform bill that the industry opposes because it believes the bill is a step backwards," said Edward L. Yingling, executive director of government relations for the American Bankers Association.

However, Mr. Yingling acknowledged that the industry would not be "100% united" in an effort to stop the bill.

Even without provisions that rile the banking industry, passage of the regulatory relief bill is not a sure thing, according to Kenneth A. Guenther, executive vice president of the Independent Bankers Association of America.

"Reg relief is not a slam dunk, because there is going to be resistance on the Democratic side and from the White House and the OCC," Mr. Guenther said.

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