WASHINGTON - Bankers are of two minds when it comes to the Federal Reserve Board's proposed change in credit advertising rules,

They either love it or hate it.

Supporters have applauded the Fed for planning to give bankers more discretion in making rate disclosures. But opponents have said any change would certainly increase the compliance burden.

The Fed proposed modifications June 27 to Regulation Z's advertising rules to help consumers and cut bank compliance costs. Comments were due Aug. 7.

A vast majority of the comment letters backed the Fed's suggestion that banks be allowed to replace some advertising disclosures with toll-free numbers.

Thomas W. Bernoski, vice president at Provident Bank of Maryland, said it costs his bank $44,000 a year to include disclosures in radio ads. A toll-free number would let the bank use this air time more productively, he said.

"This would be more valuable to the consumer and prove less costly to the advertiser," he said.

The Fed should let banks use prerecorded information if they employ toll-free numbers, wrote Beneficial Management Corporation of America vice president Millicent A. Picker.

Campus Federal Credit Union vice president Joann H. Dufilho said the Fed should allow radio and TV ads to refer to detailed disclosures in the local newspaper.

Bankers also said they shouldn't have to make different disclosures for open-end and closed-end loans. The products are too similar to require separate rules, said Susan B. Weaver, compliance officer at Bank of Lancaster County, Pa. "The existence of two different rules adds to the complexity of providing the correct disclosures," she said.

Navy Federal Credit Union president T.J. Hughes said the Fed should dump the existing rules and simply require financial institutions to: accurately advertise their products, inform consumers how they can get full rate disclosures, and state all finance charges.

J. Andrews O'Neill, senior vice president at Valley Bank of Helena, Mont., said banks should simply state that rates vary.

"Not only would this decrease consumer confusion, but in the long run, decrease creditor costs and still allow opportunity for the creditor to properly disclose the annual percentage rate if and when the credit transaction takes place," he said.

Several bankers told the Fed to leave Reg Z alone.

"All I can say is, 'please don't change anything,' " said Howard O. Hopkins, president of First National Bank of Powhatan Point in Ohio. "It has been my experience since 1968 when Reg Z was introduced that any changes made to the regulation are always to the detriment of the creditor."

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