WASHINGTON -- Bankers who sit on the boards of more than one bank, thrift, or credit union will probably be forced to give up all but one of their seats next month.

A 1978 law prohibits interlocking management between competing financial institutions, but allows directors or officers who sat on multiple boards when the law was passed to stay on their boards for up to 15 years.

Management officials who sit on the board of more than one large institution or are board members of two or more smaller institutions in the same area are judged competing and are covered under the Depository Institution Management Interlocks Act of 1978.

Hundreds Seen Affected

As of Nov. 10, an officer or director of a bank, thrift, or credit union with assets of more than $500 million may not also sit on the board of or manage of financial institution with assets greater than $1 billion.

Also, the law prohibits financial institutions of any size that are in the same town or county or neighboring counties from having the same directors or officers, effective next month.

"It is the more stable, small-town banking operation that hasn't changed hands, is closely held, that might be affected by this," says Stephen J. Verdier, senior legislative counsel for the Independent Bankers Association of America. "Any larger institutions - we're talking 15 years here - have been bought and sold, consolidated, or merged over that time."

Mr. Verdier says hundreds of bankers might have to surrender their directorships, but neither the IBAA nor any other trade group queried was able to provide a more specific estimate.

The IBAA would like to see the grandfather provision extended. But Mr. Verdier acknowledged that because no major banking laws except the touchy savings and loan bailout funding bill are expected to move through Congress by Nov. 10, the odds aren't good.

The law prohibiting management interlocks contains some complicated exceptions that can be triggered by everything from the institution's size to whether it has taken over failed institutions, said Alfred Pollard, director of government relations for the Savings and Community Bankers of America.

A thrift affected by the Nov. 10 deadline asked regulators for clarification of the law.

The Office of Thrift Supervision said the thrift could apply for an extension that - if granted - could give it up to 15 months to comply.

|Number of Inquiries'

"OTS has received a number of inquiries from management officials of depository institutions and holding companies that utilized this grandfathering exception," said the OTS letter sent in reply.

"Unfortunately, the Interlocks Act currently does not provide the federal banking agencies with the general authority to further extend this statutory time period."

However, the OTS said, "We would certainly be willing to entertain an application to extend" a director's service until Feb. 10, 1995, to allow a reasonable time for compliance.

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