In an apparent show of regulatory rationality, the Treasury Department has delayed action on a highly controversial proposal to implement the due diligence requirements for correspondent and private banking accounts in Section 312 of the USA Patriot Act. It has decided instead to adopt on an interim basis a much more narrow rule — applicable only to federally insured depository institutions, registered securities broker dealers, futures commission merchants and futures introducing brokers. This interim rule, which became effective on July 23, will remain in effect only until the original proposal is finalized later this year.