FRANKFORT, Ky. -- Kentucky's banking commissioner and the Kentucky League of Savings Institutions may introduce legislation next year that would permit savings and loans to convert to state-chartered savings banks.

The groups are considering the measure because thrifts could save hundreds of thousands of dollars a year in examination fees charged by the Office of Thrift Supervision.

Also, Kentucky's commissioner for financial institutions regulates only two thrifts and is looking for more business.

Lower Cost Cited

"We are very interested in it, obviously, because it would add to our sphere of regulatory authority," said Edward B. Hatchett, commissioner of financial institutions for the state.

Arthur L. Freeman, president of the Kentucky League, said the state examiners are more cost efficient than federal examiners. He said thrift executives estimate that a $400-million-asset institution could save anywhere from $150,000 to $200,000 in annual examination and assessments fees.

"That is one of the reasons we are seriously considering it," said Mr. Freeman, who represents 54 thrifts with more than $7 billion of assets.

"We've got a good banking commissioner in Kentucky. We think he would make a good regulator for our guys. As it stands right now . . . my members are interested."

Mr. Freeman said he has talked to officials in several states where similar legislation has been passed.

"We are still trying to learn and discuss and talk with other states and find out what our advantages would be," Mr. Freeman said.

New Powers

In those states, thrifts gained new powers. In Indiana, for example, which passed a law in April, thrifts that converted to state-chartered savings banks can make small-business loans and can hold fewer assets in real estate related credits.

Mr. Hatchett said it's too early to tell whether thrifts will receive any new powers.

"That [new powers] is not contemplated," Mr. Hatchett said. "In fact, the conversations that have been going on so far indicate that it is important that this new type of charter have no more authority than existing commercial banks."

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