Beating the federal government to the punch on financial reform, Maine has created a broad new charter for its financial institutions.

"In Maine, we've always played catch-up to federal law," said Christopher W. Pinkham, president of the Maine Association of Community Banks. "We decided to take a proactive position."

Under a law signed last week by Gov. Angus S. King, all state-chartered banks, savings banks, and thrifts became "universal banks." The new breed of financial institution will share powers that were unique to each charter.

For example, commercial banks chartered in the Pine Tree State may now own service companies. Before the law was enacted, only state-chartered thrifts could do so.

"We needed to control the safety-and-soundness side, not to manage the bank," said H. Donald DeMatteis, superintendent of the Maine Bureau of Banking. "This law takes the best of existing powers and makes them available for everybody."

The new law, which does not affect credit unions, also expands the scope of activities state regulators may approve for the new universal banks. Included are activities that are "convenient and useful" to the business of banking.

"This will allow us to give a lot of institutions more flexibility and creativity on a case-by-case basis," Mr. DeMatteis said.

In many areas, the new state law goes well beyond what is allowed by federal law. Several provisions cannot take effect unless Congress adopts similar measures. For example, the Maine law opens the door for a new wholesale financial institution, much like the "woofies" contemplated in financial modernization legislation being debated in Congress.

These uninsured institutions would only take large deposits from institutional clients, and would be able to make equity investments in the companies to which they lend.

Other provisions in the new Maine law that are currently banned or strictly limited by federal law include:

Unlimited securities underwriting.

Ownership of banks by commercial companies.

Payment of interest on business checking accounts.

"We're trying to anticipate what is going to happen, because all of these things are on the plate at the federal level, " Mr. Pinkham said.

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