WASHINGTON -- A new survey by a banking trade group suggests that fewer people are confused, compared to a year ago, about whether mutual funds sold at banks are federally insured.

The Consumer Bankers Association's study found that one in five people contacted in the nationwide survey believed that mutual funds sold in banks are backed by the Federal Deposit Insurance Corp.

The findings, which were released Monday, showed an improvement from earlier surveys.

For example, a study done by the Securities and Exchange Commission last year found that two-thirds of those contacted were confused about the issue.

In an interview, Joe Belew, the CBA's president, said his group's survey showed that banks had done a good job of educating their customers and the public in the past year.

The survey also found that only 5% of those who had actually bought mutual funds at a bank believed their investment was federally insured.

As a result of the findings, Mr. Belew argued that regulators and lawmakers should give existing guidelines a chance.

"The regulatory circular and the industry voluntary guidelines are working," Mr. Belew said. "This would seem to say there's less pressure to do new mutual fund legislation."

Consumer confusion about mutual funds sold at banks has been a focus of public and congressional attention this year, as evidence has mounted that many consumers are unclear about the risks.

Previous surveys by both the SEC and the American Association of Retired Persons found that most of those polled either believed mutual funds sold at banks are backed by the federal governemt or did not know they are not.

Mystery shoppers from Money magazine and Consumer Reports also found that large numbers of brokers were failing to tell customers that mutual funds are not federally insured.

In response, consumer groups, state securities regulators, and some lawmakers have pressed for more stringent rules to govern the sale of mutual funds at banks.

Currently, the industry is operating under guidelines issued last spring by the bank and thrift regulators. But the Office of the Comptroller of the Currency has said it is reviewing the need for regulations. David Apgar, senior policy adviser to the Comptroller, said he welcomed the CBA survey.

"It enables you to tell what kind of impact that the disclosures [recommended by the OCC's guidelines] are having on the general public," Mr. Apgar said. But he could not say whether the survey's findings suggest that new regulations are unneeded.

The survey was based on interviews with 700 households by Roper Starch. The research firm interviewed 164 bank mutual fund customers. These included 139 customers of five CBA member banks.

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