The Association of Financial Services Holding Companies said Monday that it has rejected a merger overture from the Financial Services Roundtable.

Patrick A. Forte, president of the holding company association, which represents 25 diversified consumer financial services companies such as Citigroup Inc., Ford Motor Co., and Household International Inc., said the two groups could not overcome "historic and cultural differences" between banking organizations and their nonbank competitors.

"These things are hard to do," Mr. Forte said. "We thought this one made sense."

Roundtable president Steve Bartlett declined comment except to say that he has talked to a variety of trade association officials this summer about teaming up. He said his organization's board believes in forming "a single, powerful organization to represent the integrated financial services industry."

The Roundtable, which the 125 largest banking companies may join, was known as the Bankers Roundtable until April, when it changed its name to reflect the broader financial offerings of most banks. The name change was also seen as a first step toward accepting securities firms, insurers, and other diversified financial companies as members. Mr. Bartlett said the Roundtable's board will weigh other mergers, alliances, and options at a meeting here in mid-September. Mr. Forte said the principal stumbling blocks to a merger was the Roundtable's hostility to unitary thrifts and its requirement that only chief executives could be members of the combined organization.

Controversy over the cost and mission of the Roundtable's Banking Industry Technology Secretariat division also was reportedly a source of concern. Mr. Bartlett first approached the Holding Companies association about two months ago, Mr. Forte said, and talks were conducted at the staff level but ended last week before a formal proposal was ready for board votes.

Meanwhile, opposition continues to mount against the proposed merger American Bankers Association and America's Community Bankers, which was announced July 19.

Some state and regional thrift groups are exploring whether their members would have a legal claim to a share of ACB's nearly $30 million in reserves if it merges with the ABA. (A spokesman said the ACB had $25.6 million in reserves on Dec. 31, which equals about 1.5 times its annual revenue.)

James R. Turner, president of the Heartland Community Bankers Association, said the funds could be transferred to state groups or a new national thrift trade group under consideration. ACB chairman E. Lee Beard declined comment.

Two weeks ago the Heartland group and the Community Bankers of Louisiana said they would not support the merger unless the combined ABA-ACB agreed to protect the mutual thrift charter, commercial ownership of unitary thrifts, and the Office of Thrift Supervision, and meet other demands.

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