A slew of applications for thrift charters were filed in the final days of 1998, bringing the number of nonbanks with requests pending to 42.

On Dec. 31, Franklin Resources Inc., a mutual fund company in San Mateo, Calif., asked the Office of Thrift Supervision for permission to convert its Franklin Bank to Franklin Templeton Bank and Trust FSB.

Franklin wants the thrift charter to expand its consumer lending portfolio, according to Raymond S. Sczudlo, a partner with Weil, Gotshal & Manges, a law firm here representing the company.

Franklin's charter in California is as a nonbank bank grandfathered under the Competitive Equality Banking Act of 1987.

Franklin Resources, with assets under management of $222.6 billion, plans to headquarter its thrift in Salt Lake City to take advantage of Utah's favorable usury laws, Mr. Sczudlo said. Though initially the thrift will only have one branch in California, Franklin may eventually expand nationwide, he said.

Morgan Keegan Inc., a securities firm in Memphis, applied Dec. 31 to convert its trust unit, Morgan Trust Co., to a federal savings bank. A thrift charter would allow the company to offer trust services nationwide, according to the application it filed with the OTS.

Affinity Group Inc., a Delaware direct marketing company, filed an application Dec. 28 to convert a California chartered bank, $145 million- asset Affinity Bank, to a federal savings bank.

Affinity sells club memberships to recreational vehicle owners, campers, and golfers. It then markets magazines, buyers guides, and services such as roadside assistance and vehicle and health insurance to its members.

Four other nonbanks-Massachusetts Mutual Life Insurance Co., Conseco Inc., Everen Capital Corp., and the Polish National Alliance-applied for thrift charters last month.

Many applications may have been filed before yearend in case Congress decides to abolish the thrift charter. Lawmakers debated this move last year, but adjourned without enacting any legislation. The debate is expected to continue this year.

If legislation is approved, Congress is expected to protect, or grandfather, some thrift charter owners. "The clock is ticking," said Kenneth A. Guenther, executive vice president of the Independent Bankers Association of America.

The thrift charter, through which any kind of company may own a savings bank, is "a major loophole of the highest concern to the banking lobby," he said.

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