Phone Carrier on Line for Thrift Charter

Excel Communications Inc., the nation's fourth-largest long-distance phone company, has applied for a savings bank charter, according to the Office of Thrift Supervision.

Dallas-based Excel would charter Excel Bank and become a unitary thrift holding company. Akin to Avon cosmetics, Excel employs independent representatives who sell the company's long-distance services to friends, co-workers, and other acquaintances.

Excel Bank would serve these nearly 1 million salespeople and 4.1 million residential and small-business customers, according to its May 20 application.

Excel Bank would be capitalized with $5 million; on July 1, the capital that regulators require to charter a thrift is to drop by one-third, to $2 million.

"We intend to begin with a fairly narrow offering," Excel spokeswoman Sharon Holman said. "This is just another additional advantage to being an independent rep for Excel."

The OTS also said Affiliated Federal Credit Union in Hurst, Tex., has filed an application to convert to a mutual savings bank charter.

Affiliated, with just $8.5 million of assets, sees a thrift charter as a means to growth, said its lawyer, Bruce A. Heitz.

Mr. Heitz said the May 30 conversion application was spurred by a 1996 court ruling barring occupation-based federal credit unions from accepting new groups of members.

"Affiliated finds itself basically dead in the water," Mr. Heitz said. "From a business perspective, converting to a thrift charter enables them to enhance their profitability."

If the conversion is approved, Affiliated would be the fourth credit union to make the switch.

Two others have converted to thrift charters in recent years, and another, BUCS Federal Credit Union, Owings Mills, Md., has an application pending at the OTS.

"I'm surprised more institutions haven't looked at this," Mr. Heitz said.

Congress is debating reform of the nation's financial laws and is considering abolishing the thrift charter. Existing unitary thrift holding companies likely would be grandfathered. To obtain a charter before it's eliminated, an increasing number of companies are applying to the OTS.

The agency has received 20 charter applications this year, compared with 11 in all of 1996.

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