A showdown is looming over the unitary thrift charter as financial reform legislation moves to the Senate and House floors next month.

Bankers have demonized the unitaries, equating them with the risk-taking savings and loans of the 1980s that later collapsed. Other foes claim unitaries resemble the overseas industrial conglomerates that have been blamed for the Asian economic crisis.

But thrift lobbyists are digging in.

"We will work without letup and use every resource at our disposal and enlist every ally we can muster to make sure there is no significant damage to any aspect of the savings institution charter," vowed Paul A. Schosberg, president of America's Community Bankers.

Under current law, any company-even commercial companies with no other finance-related businesses-may own a single thrift. Today 838 such unitary thrift holding companies exist; applications for 68 more are pending at the Office of Thrift Supervision.

Critics such as Federal Reserve Board Chairman Alan Greenspan, House Banking Committee Chairman Jim Leach, and Sen. Paul S. Sarbanes, the ranking Democrat on the Senate Banking Committee, refer to unitaries as the "loophole" in the legal prohibition on nonfinancial companies owning banks.

Treasury Secretary Robert E. Rubin recently sided with the critics.

Defenders argue that unitaries have a safe track record and that the S&L crisis would have been worse if commercial companies had not pumped more than $3 billion into 79 dying thrifts. These advocates include Senate Banking Chairman Phil Gramm, Office of Thrift Supervision Director Ellen Seidman, and House Banking's top Democrat, Rep. John J. LaFalce.

Kerry K. Killinger, chairman and chief executive officer of Washington Mutual Inc., a Seattle-based unitary and the biggest thrift company, has pressured lawmakers not to fiddle with something that he says is not broken.

"Congress must not take a giant step backward by harming the charter that ensures consumers continue to have the broadest possible flexibility in meeting their banking needs," he said in a February speech.

Right now, thrifts have the momentum. Although the House and Senate Banking Committees' reform bills would impose new limits on unitaries, both bills have been watered down this year.

Both versions would prevent nonfinancial companies from chartering new thrifts. Existing unitary thrifts or those that had filed an application after set dates would be grandfathered.

Senate Democrats introduced a rival version last month that would prevent commercial firms from buying existing unitaries. The House Banking Committee had attempted a similar ban, but it was dropped on a 29-to-26 vote.

Banking industry lobbyists want to restore a limit on the sale of unitaries, but admit it will be tough.

"On both the House and Senate floors, it would be extremely close," said Edward L. Yingling, chief lobbyist for the American Bankers Association. The odds are "probably fifty-fifty" in each chamber.

Others are more pessimistic. "I think we will lose on that," said Christopher L. Williston, president of the Independent Bankers Association of Texas.

Meanwhile, thrift supporters are expected to offer amendments that would strip any restrictions on unitaries. House Banking defeated such a proposal last month-but only by a single vote.

The thrift industry also will rely on ally Rep. David Dreier, chairman of the House Rules Committee, which would be the bill's next stop after a vote by the Commerce Committee. The California Republican could make changes to the bill or insulate it from anti-thrift amendments.

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