WASHINGTON - It was to be the banking industry's reward for helping solve the thrift insurance fund crisis: a brand new charter featuring some of the powers now enjoyed by savings institutions.

But with the congressional effort to fix the undercapitalized savings fund moving on a fast track, hopes have faded here that the legislation will be accompanied by a new-and-improved bank charter.

"I get the sense we're not going for the home run, although as a matter of policy it's a good idea in the long run," said one Senate Banking Committee staff member.

"If the charters are going to be harmonized in the next few weeks or months," added Brian Smith, director of policy development for America's Community Bankers, the thrift trade group, "it's going to be the rusty, crappy, off-the-shelf commercial bank charter."

Even leaders of the American Bankers Association, which had demanded that any thrift fund legislation be part of a "comprehensive resolution" that included a more permissive bank charter, now acknowledge that they probably won't get their way.

"If in fact Sen. (Alfonse) D'Amato wants to push it in the time frame he's talking about, you're probably not going to have broader powers added to it," said Ed Yingling, the ABA's executive director of government relations.

Sen. D'Amato, chairman of the Senate Banking Committee, has said he wants the Bank Insurance Fund/Savings Association Insurance Fund fix to be included in the budget reconciliation legislation that will be voted on next month.

Added Mr. Yingling: "There may not be significant new products and services in the BIF/SAIF bill, but we do think some members of Congress will be more sympathetic to pushing new powers legislation if BIF/SAIF is resolved."

The difficulty with adding to the bank charter powers now enjoyed by thrifts - insurance sales, real estate investment, and freedom to affiliate with nonbank companies - is that such a move would run into the same wall of resistance from insurance agents and community bankers that has stalled congressional attempts to reform the 1934 Glass-Steagall Act, which segregates commercial from investment banking.

"It's the right thing to do, and therefore they're not going to do it," Washington banking consultant Karen Shaw Petrou said of Congress. "Assuming this is even addressed, which is a bit of a stretch, the conclusion would be a complex grandfather."

Grandfathering amendments are not unusual. As a matter of perceived fairness, Congress frequently exempts - or grandfathers - companies from new laws that would disrupt an existing business or product line.

The "complex grandfather" Ms. Petrou and other Congress-watchers now anticipate would do away with the thrift charter, allow individual thrifts to hold onto powers they are now using, and otherwise leave the commercial bank charter untouched.

While grandfathering appears to have gathered political steam, it's not universally popular.

"The thrift charter has proven to be bankrupt; otherwise the banking industry would not be called on today to bail out SAIF," said Kenneth Guenther, executive vice president of the Independent Bankers Association of America. "If thrifts say they want to accept the bank charter, fine. If they want to grandfather, that's something else."

Patrick Forte, president of the Association of Financial Services Holding Companies, said he sees another problem. "A grandfathering clause has never been applied to operating companies that hasn't damaged a number of them materially," he said.

Most difficult to grandfather would be the so-called unitary thrift holding companies - parent companies that, along with a single thrift, may own insurers, carmakers, stockbrokers, or just about any other sort of business.

The unitary thrift structure was created by Congress in the late 1960s, one of a succession of benefits bestowed upon S&Ls in return for restrictions that forced them to concentrate on home lending.

Thrifts can, through subsidiaries, sell insurance. They can invest in real estate, subject to certain limits. They can branch across state lines with far fewer limits than banks will face even after interstate banking becomes law in 1997.

Mr. Forte suggests allowing these powers to survive under a "consumer bank" variant of the national bank charter. Banks and thrifts that meet something along the lines of the qualified thrift lender test would be granted certain freedoms.

Jonathan Fiechter, acting director of the Office of Thrift Supervision, has a slightly different vision. Over the long run, he said, he would favor creating a "more competitive, stronger community bank charter" designed just for small banks and thrifts.

"The difficulty I would have with simply flipping thrifts to banks is that the banking industry is very mature," Mr. Fiechter said. "It would be very difficult for thrifts to gain a share of the commercial lending market."

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