Letting companies like Morgan Stanley, Goldman Sachs Group Inc., and American Express Co. obtain bank charters adds another wrinkle to conducting business in these tough times by intensifying deposit pricing competition, some bankers say.

"This is the least appropriate time to introduce nonbanking competition into the banking environment," Joseph R. Ficalora, the chairman and chief executive of the $32.1 billion-asset New York Community Bancorp in Westbury, said in an interview Monday. "This puts more pressure on margins and it will cause a significant decrease in profitability for traditional banks."

Chief among the bankers' concerns is that new entrants to the deposit market already have expansive lists of clients they can blast with offers of high rates.

"How many millions of statements does American Express send out?" asked Paul D. Garaghty, the president and CEO of the $3.9 billion-asset Harleysville National Corp. in Pennsylvania. "It would be very easy for them to send a stuffer in there to pursue deposits.

According to Mr. Ficalora, "we'll all just have to compete."

In an interview last month, Mr. Garaghty questioned whether the decision to let nonbanks obtain charters was "well thought out." Regulators "are running the risk over a period of time of taking deposit liquidity out of Main Street," he said.

Morgan Stanley and Goldman became bank holding companies in September, a particularly volatile month for the financial sector in a tumultuous year. The idea was to give the last two independent investment banks access to a broader funding base.

Amex and others have followed suit with charter applications designed to let the companies apply for funds under the Treasury Department's Capital Purchase Program.

The list of applicants for bank charters includes GMAC Financial Services and Protective Life Corp. Hartford Financial Services Group Inc. has applied to become a savings and loan holding company.

Toni Simonetti, a spokeswoman for GMAC, said it could become more aggressive in gathering deposits if it received a bank charter. (It already has an industrial loan one.) A bank charter would open up funding sources such as the Federal Reserve Board's discount window and the Federal Deposit Insurance Corp.'s liquidity guarantee program, she said.

Shannon Lapierre, a Hartford spokeswoman, said that the Connecticut insurer has no plans to expand retail banking operations beyond operating Federal Trust Corp., the Sanford, Fla., thrift it has agreed to buy as part of its conversion.

Neither Goldman nor Morgan Stanley would discuss the issue. Calls to Amex and Protective Life were not immediately returned.

Deposit prices have been declining slowly in lockstep with the federal funds rate as liquidity-strapped companies that had offered high rates in a bid for survival have disappeared. High-end rates for certificates of deposit currently range from 4% to 5%, compared to 5.5% or more a year earlier, according to Bankrate Inc.

Greg McBride, a senior financial analyst at Bankrate, said it is "certainly possible" that new entrants could push CD rates higher, though bankers' concerns about that are likely overblown.

"At any point in time there will be banks, thrifts, and credit unions willing to offer extremely competitive returns," he said. "I don't think it will radically change the landscape."

Gerald H. Lipkin, the chairman, president, and CEO of the $14.3 billion-asset Valley National Bancorp in Wayne, N.J., said he sees good and bad in the fresh competition.

The arrival of new entrants could have "a negative impact" on deposit pricing, he said. "Then again, it could have a positive impact because, if they do buy other banks, it would reduce the competition, so you never know."

Still, Jason Korstange, a spokesman for the $16.5 billion-asset TCF Financial Corp. in Wayzata, Minn., said the current wave of charter applicants "may be replacing" banks that had offered the highest rates.

"I don't envision that they will start with checking or any real savings account," Mr. Korstange said. "They'll do CDs, which are largely Internet-driven."

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