WASHINGTON -- As the American Bankers Association prepares to bring up the curtain on its 1993 convention, the world is looking like a "kinder, gentler" place to bankers like Donald M. Karp, chairman of Broad National Bank, Newark, N.J.

Gone are the years of escalating real estate losses, scorched balance sheets, and sneering examiners. Also gone are the days of crisis, in which the industry swallowed a mountain of new regulations as the price tag for the government-backed rescue of the Bank Insurance Fund.

"Loan demand is getting better and profits are going up," said Mr. Karp, whose $450 million-asset bank more than doubled its earnings over the first nine months, to $2.8 million.

Growing Optimism

"It's just a kinder, gentler world," he added.

And bankers around the country reported similar stories. For the first time in years, it seems, the ABA is kicking off its annual convention in an atmosphere of growing optimism.

That hasn't translated into increased attendance, however. Registrations at this year's convention, which begins Saturday morning in San Diego, are below last year's pace, and trade group officials say the days in which the ABA could attract upwards of 10,000 people to its annual gathering are gone for good.

One reason, they say is the demise of the correspondent banking system, in which larger banks sold services to smaller institutions and then entertained heavily at the convention to maintain customer goodwill.

"It used to be the correspondent banking event of the year, with huge parties," recalled Edward L. Yingling, executive director of government relations for the ABA.

In Search of Issues

"Hopefully, it will go back up again," Mr. Yingling said. "But there is a feeling it won't be back where it was 10 yearts ago."

Still, Mr. Karp and others say they still get plenty out of the annual show.

"I go to the ABA because I'm interested in the issues that will be raised," said Mr. Karp. Among them are interstate branching, new powers, and -- above all else -- the industry's quest for relief from burdensome regulations.

"Regulatory burden is probably the toughest thing we face," said Donald E. Blaha, president of First National Bank of Ord, Ned., a community of 3,000. In particular, he said, the Community Reinvestment Act has become a monster.

"I can see why CRA is needed for larger communities," he said. "But for us, if we don't serve the entire community, we're out of business.

Mr. Blaha said CRA saps as much as 1,000 hours of time each year. That's a full 40-hour week each year for every one of his 25 employees.

"If it were something that did any good for the community, I wouldn't mind," he said.

Likewise, in Alexander City, Ala., First National Bank chairman John R. Thomas calls CRA his No. 1 problem.

Revenge of the Regulators

"It just generates paperwork," he said. "We have been very diligent in trying to comply, but it hasn't brought any new business into the bank."

Those who attend the convention will get a heavy dose of policy debate and practical advice. The heads of the three federal banking agencies will all address the gathering, reversing a two-year-old policy in which only one of the trio was invited.

In 1991, it was widely assumed that the ABA snubbed Fed chairman Alan Greenspan and Comptroller of the Currency Robert L. Clarke because of their speeches a year earlier.

Mr. Greenspan had bored bankers to tears with a speech on the history of the clearing system, and Mr. Clark had angered them by warning that the industry had lost its credibility.

At the time, Mr. Yingling said they had decided that the threesome amounted to a case of "too much of the regulators."

This year, he said, it seemed appropriate to bring all three back on. One, Comptroller of the Currency Eugene A. Ludwig, is new, and acting Federal Deposit Insurance Corp. chairman Andrew C. Hove has held the top post for only a year. And it has been two years years since Mr. Greenspan addressed the convention.

Among the attractions at this year's convention will be a panel discussion titled, "Challenging the credit unions," which some ABA officials concede might be better labeled, "How to sue your local credit union."

Bankers in at least five states have pending suits that challenge what they see as overly expansive definitions of common bond -- the market an individual credit union serves. And Mr. Yingling concedes that the ABA has an interest in seeing cases "with good facts" filed.

One new twist on this year's program is a dramatization, in which a group of bankers, lawyers, and trade group executives will make their acting debut as bankers struggling with a minority loan application.

At the end of the performance, the audience will use hand-held electronic voting devices to decide whether the group made the proper decision.

John Hall, a spokesman for the ABA, said it wasn't hard getting industry figures to participate in the play. But it took a little bit of effort, he conceded, to "find people who could be a little bit lively."

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