CoreStates Financial Corp. is waiting to see whether a federal regulator will give it the green light to manage trusts on an interstate basis without local oversight.

Philadelphia-based CoreStates has asked the Office of the Comptroller of the Currency to let it establish a national bank that would centralize trust operations from several states.

The proposed CoreStates Asset Management bank would be headquartered in Malvern, Pa., and have 11 other offices, including two in New Jersey and one in Delaware. If established, it would be the first of its kind.

Elsewhere, Banc One Corp., Columbus, Ohio, which manages trusts in 12 states, got OCC approval for a similar plan to streamline trust operations in late 1995. This week it got OCC approval to merge national banks in Wisconsin and Ohio that have trust businesses.

Other banks, mindful of potential savings, have praised such moves. BankAmerica Corp. filed a letter in support of CoreStates and Banc One during a comment period that ended May 19.

"Everybody wants and needs to do trust on a nationwide basis," said John P.C. Duncan, a partner of Jones, Day, Reavis & Pogue, Chicago.

CoreStates' Jan. 27 application stated that the new bank-"to take full advantage of economies of scale"-would combine fiduciary, custody, agency, and investment businesses currently operated through separate divisions in different states.

CoreStates has $33 billion of assets under management.

But state regulators-including those in Virginia, Illinois, and New Jersey-have been less than supportive. New Jersey's attorney general submitted a comment letter to the OCC contending that CoreStates Asset Management's charter should not be approved.

CoreStates Asset Management "would open de novo, allegedly nonbranch 'trust offices' in New Jersey, rather than authorized branches," the letter stated.

A spokeswoman for CoreStates would not comment on the bank's application.

New Jersey would not oppose CoreStates' trust bank so long as it obeyed state law and operated state-regulated branches, according to a government official.

The state's attorney general was concerned that without local oversight CoreStates' trust customers would be without protection or, in the event of wrongdoing, legal recourse, the official added.

To strengthen its case, CoreStates cited an OCC interpretative letter dated Dec. 9, 1995. It sought to give out-of-state national banks the same ability to operate in a given state as local institutions, CoreStates claimed.

Yet trust activities are not covered by the federal interstate banking law, according to the Conference of State Bank Supervisors, a Washington lobbying group.

"Riegle-Neal did not address trust activities. We think that they left trust activities out on purpose, deferring to the traditional structure of trust activities, which leaves trust regulations to the states," a spokeswoman for the lobbying group said. Some states are working on legislation to allow interstate trust operations, on their terms, she added.

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