WASHINGTON - Charlene Drew Jarvis, a City Council member here, is opposing NationsBank's application to combine its banks in the District of Columbia and Maryland.

Her opposition could delay NationsBank's plan to turn its Washington banking operations into branches of its Maryland bank.

The Charlotte, N.C.-based banking Goliath is attempting this interstate move through a complicated three-application process to the Comptroller of the Currency.

Late-Arriving Letter

"We will certainly take her comments into consideration," OCC spokeswoman Lee Cross said Tuesday.

NationsBank's applications were open for public comment through last Thursday. The Comptroller's office said Friday that no complaints had been filed. But Ms. Jarvis' letter to the OCC surfaced Monday.

NationsBank "has used creative interpretations of federal banking laws to accomplish what is, in effect, interstate branching which has not yet been expressly permitted by either federal or District of Columbia law," Ms. Jarvis reminded the OCC. "My concern is that section 30 [of the National Bank Act], which merely permits relocation, is being misapplied."

The banking company in early October asked the OCC for permission to move its Washington headquarters just over the border into Silver Spring, Md. OCC rules let banks move their main offices - even across a state line - anywhere within 30 miles.

NationsBank's second application asks for permission to merge its Washington bank into its Maryland bank. Finally, NationsBank wants to operate the Washington banks as branches of the Maryland bank.

Ms. Jarvis, who also is chairwoman of the D.C. Council's Committee on Economic Development, said Congress never intended the OCC to piece together interstate branching rights.

Harm to Local Area Feared

NationsBank's "application, in effect, utilizes a relocation power to evince a branching power," Ms. Jarvis wrote.

She is concerned that local bank board's power will be diluted, Ms. Jarvis said, and that lending decisions will be made far from the local market where deposits are gathered.

"We must not, as a public policy, support banking convenience at a loss to District residents and businesses," she said.

First Fidelity Bancorp. has filed similar applications.

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