WASHINGTON -- Large, retail-minded banks are moving aggressively to offer traditional banking services and investment products in a single package, despite a lack of clear regulatory guidance on the practice.

First Union Corp., Fleet Financial Group, and Barnett Banks are among those that have begun integrating their securities offerings into their mainstream business.

In doing so, they hope to capitalize on the built-in edge over nonbank competitors: existing relationships with customers.

The packaging strategies are helping banks to cement relationships with customers who want the "ease, comfort, trust, and convenience" of conducting all their financial transactions in one place, said Joy P. Montgomery, president of Money Marketing Initiatives, Morristown, N.J.

No Regulatory Roadmap

Yet in linking investment and banking services, banks are proceeding for the most part without a regulatory roadmap. Mutual funds and other investment products are still so new to most banks they have only recently begun to think of marketing them in tandem with deposits and credit products.

As they proceed, banks chiefly appear to be concerned with structuring arrangements so they do not violate the anti-tying rules of the Bank Holding Company Act. Several banks have turned to their lawyers for help in creating packaged services that comport with these rules.

Gradually, however, a regulatory framework is taking shape to help banks determine what types of packaging arrangements are permissible.

First Union Plan Approved

Late last year, for instance, the Federal Reserve Board approved a plan by First Union that allows First Union's discount brokerage subsidiary to give price breaks to customers who keep minimum balances in First Union deposit accounts.

The approval cleared the way for First Union to offer a 5% discount on brokerage commissions to customers who keep a $10,000 minimum balance in deposit accounts, credit card balances or in its mutual funds. Now the Fed is considering a proposal to expand the authority to all banks.

But the regulators have been silent on whether banks can offer discounted services to customers who invest in proprietary mutual funds -- a common thread in banks' technique for combining services.

At First Union, for example, customers who invest $10,000 in the bank's proprietary funds can get a package that includes a free checking account, a gold Visa credit card with lower interest rates and no yearly fees, and free travelers checks.

At Barnett, customers can get a free checking account and assorted services if they invest $15,000 in the bank's Emerald mutual funds.

Barnett spokesman Bob Stickler said the bank also is looking at giving its bank customers a rebate on their brokerage commissions.

At Fleet, customers can combine balances in brokerage and mutual fund accounts with certificates of deposit to reach a minimum level of $10,000 and qualify for free checking.

But even without formal approval, Fleet "feels comfortable" with the practice, said Peter Herlihy, vice president and mutual fund marketing manager at Fleet Investment Services. He said examiners already have reviewed it.

To leverage relationships with customers, banks "should really try to integrate those mutual fund products into existing services," Mr. Herlihy said.

But not all banks are comfortable proceeding without guidance. Banc One Corp. has decided that it could not offer securities and banking packages without violating the anti-tying rules, said Paul Walsh, chief executive of Banc One Diversified Services Corp.

The Columbus, Ohio, banking company is looking into making its investment arm a subsidiary of one of the banks it holds, instead of keeping it as part of the holding company, Mr. Walsh said.

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