H.F. Ahmanson & Co. has undertaken to transform its principal subsidiary, Home Savings of America, from a mortgage factory into a full- service consumer bank. The move, being engineered by chairman Charles A. Rinehart, has stirred controversy.

The article below, adapted from a report by Thomas O'Donnell, an analyst at Smith Barney Inc., supports the Rinehart initiative while outlining some pitfalls.

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