WASHINGTON - A national trade association wants the banking agencies to conduct a spring cleaning.

The Bankers Roundtable asked the regulators this month to either eliminate or substantially modify scores of rules in response to the Riegle Community Development and Regulatory Improvement Act of 1994. That law requires the agencies to review their rules to reduce regulatory costs, improve industry efficiency, and remove unwarranted credit restraints.

"It is an opportunity in the current political and regulatory climate to reexamine regulations that may not be of the greatest concern but were constant, minor irritants that could be disposed of," said Richard F. Ober Jr., general counsel at UJB Financial Corp. and one of the co-authors of the letter.

The letter hits just about every aspect of the regulatory process, ranging from insider loans, to background checks, to rescission, to appraisals.

In one of the more controversial provisions, the group wants regulators to let banks test-market innovative products without prior approval. Also, it asked the agencies to take a broader view of what services are "incidental" to banking and thus permitted.

The group also said regulators should permit commercial banks to acquire failing thrifts without having to pay a fee to leave the Savings Association Insurance Fund.

While the trade group's letter garnered support, Washington observers gave it little chance of success.

"You have one of these streamlining initiatives every half dozen years," said Kenneth E. Scott, a professor at Stanford Law School and a member of the Shadow Financial Regulatory Committee.

The initiatives usually fizzle because regulators are afraid Congress will criticize them if they don't have every possible fact before acting on a matter, he said.

"There is a built-in bias to say, Tell me, tell me, tell me," Mr. Scott said.

George Bentson, a professor at Emory University and a member of the shadow regulatory committee, said regulators become too protective.

"They could do a lot," Mr. Kaufman said. "Very unfortunately, we seem to have a turf battle between the Comptroller and the Federal Reserve. It is unfortunate because, who really cares?"

But, Bankers Roundtable general counsel Richard Whiting said this time is different.

"They now have been directed to do something and to report to Congress in 1996 on what they have done," Mr. Whiting said. "So we've provided a bit of a measuring stick to see what actions they actually take."

The "measuring stick" is quite comprehensive, filling 26 pages. Proposals include:

*Restrict Regulation O's limit on insider lending to only those officers with policymaking responsibilities. Also, allow unlimited lending to insiders for loans that are fully secured with either a first or second lien on a house. And the Federal Deposit Insurance Corp. should conform its rule to the one used by the other agencies.

*Streamline the applications process, requiring the reserve banks and the Federal Reserve Board to process applications simultaneously. Also, reduce disclosures for large banks acquiring small institutions and eliminate the Fed's ability to repeatedly delay applications by asking for more information. Finally, the agencies should ignore all comments received after the filing deadline.

*Modify section 20 firewalls, permitting bank directors to sit on the board of securities subsidiaries, allowing affiliates to market section 20 products, dropping restriction that keep bank affiliates from providing credit to enhance a security underwritten by the section 20 subsidiary, and adopting a new, more expansive method of calculating the 10% cap on securities work.

*Permit consumers in more situations to waive their right to rescind a loan secured by a second mortgage and eliminate rules that require a bank to register as a deposit broker before making deposits at affiliated, insured institutions.

*Allow banks to hire people with criminal records for clerical, maintenance or service jobs without first receiving FDIC approval, and kill the summary deposit report for bank branches.

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