The proposal by Rep. Jim Leach, R-Iowa, would put industrial-loan corporations into the same federally regulated classification as banks.

Currently, industrial-loan corporations are regulated only by state authorities, and a federal law barring commercial firms from owning banks does not apply to them.

Wal-Mart has attempted to purchase an industrial-loan corporation for several years, and has applied to the Federal Deposit Insurance Corporation to form such a company in Utah.

Wal-Mart has said it does not plan to go into retail banking, but instead wants to avoid paying third-party banks fees that are charged for debit- and credit-card transactions.

Leach's measure would require industrial-loan corporations to be regulated like any other bank, keeping Wal-Mart from buying such a company.

During a meeting of the House Financial Services Committee in Washington on Wednesday, Leach withdrew the measure after first trying to attach it to the Financial Services Regulatory Relief Act. That measure would loosen restrictions on bank branching, capital requirements and loan extensions.

Rep. Barney Frank, D-Mass., said he agreed with the intent of Leach's measure, but the broader regulatory-relief bill was the wrong place to put it.

''Adding a major change to industrial-loan corporations invites a degree of opposition in the Senate, which is likely to doom the bill,'' Frank said.

''There is a broad consensus to keep Wal-Mart out of the banking business. The question is how,'' he added.