Grain processing giant Archer-Daniels-Midland Co. has asked the government for permission to transform its state-chartered bank into a federal thrift.

The Decatur, Ill., company plans to convert Hickory Point Bank and Trust in nearby Forsyth to a thrift in order to broaden the array of services the institution would be allowed to offer.

"The federal thrift charter gives us a lot more flexibility to build our franchise than our current situation allows," said Dale P. Arnold, president and chief executive of the $450 million-asset institution.

Hickory Point is one of a handful of so-called nonbank banks, which may take deposits or make loans, but not both. When it was acquired by ADM in 1986, the institution sold Hickory Point's loans.

Commercial firms were allowed to acquire nonbank banks until 1987, when Congress passed the Competitive Equality Banking Act, which also barred existing nonbank banks from offering products and services they were not engaged in as of March 5, 1987.

While Hickory Point had received approval for trust powers from Illinois banking regulators before that deadline, it had not begun to offer trust services, according to the ADM application, which was filed Aug. 29 but released Friday by the Office of Thrift Supervision.

"Trust is included in the name of our bank, but we can't include it in our services," Mr. Arnold said. "We want to make our bank full-service, and offer small business loans and trust powers to our community. We want the ability to do anything a federal thrift can."

Ira L. Tannenbaum, the partner with the law firm that prepared the ADM application, Kirkpatrick & Lockhart, said that recent changes to federal thrift lending rules have made the charter more attractive.

Congress last year doubled the amount of commercial loans a thrift may make and eased the so-called qualified thrift lender test by allowing credit card and student loans to count.

"Up until last year, there were some pretty severe negative factors attached to a federal thrift charter," Mr. Tannenbaum said. "Now Hickory Point will have even more flexibility."

The ADM application is similar to a request by the Travelers Group. In December, the insurance giant asked the agency for permission to convert its New York-chartered bank to a federal thrift to conduct trust services.

The OTS is expected to act on the Travelers application by Oct. 26. Twenty-one other companies, including insurance, securities, and telephone firms, have thrift applications pending at the OTS.

Interest in the charter has picked up this year as companies buy or start thrifts before Congress outlaws them. The charter would be eliminated under pending financial reform legislation.

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