A New York law that grants tax breaks to banks opening branches in depressed neighborhoods is being expanded to include the state's thrifts.

The law, which outraged thrifts when it was enacted last year, offers a 50% property tax cut to banks that locate in communities viewed as "underserved" by state bank regulators. It also requires that local governments agree to keep deposits in these banks at below-market interest rates.

Savings banks were excluded from the law because state regulations forbid thrifts to accept municipal deposits. But legislators amended the law in August after thrift officials voiced displeasure during a series of hearings held by the state banking department.

"We felt disenfranchised," said Mariel O. Donath, president of the Community Bankers Association of New York, which represents about 100 thrifts. "A lot of our members are already in these areas, and in many cases we are the only banks in these areas."

The amended law takes effect Jan. 1. Aside from becoming eligible for tax breaks, thrifts that open branches will also be allowed to accept government deposits.

Only a handful of banks have inquired about the tax breaks since January when the initial law took effect, and none has submitted an application to state regulators. Applications are expected to start rolling in now that thrifts are eligible. "It seems to us that savings banks are most interested," said Barbara Kent, a lawyer in the state banking department.

One thrift eager to take advantage of the new law is Cohoes Savings Bank. Harry L. Robinson, president and chief executive officer of the $563 million-asset thrift, said his staff is looking at low-income neighborhoods in Albany for branch sites.

Mr. Robinson acknowledged that Cohoes Savings is unlikely to make money on the new branches at first. But he said that if the thrift can help rebuild residents' credit it will eventually sell more home loans and other products.

"It's going to mean business for the future," he said.

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