WASHINGTON - Federal regulators are expected to postpone action on a plan that would let banks make larger loans without a certified appraisal.

An announcement is likely by the end of September.

More lenient appraisal rules were expected to take effect this month. But the delay, which is being engendered by opposition from appraisers and consumer groups, is likely to push back implementation to late November.

Part of Clinton Plan

The changes in appraisal regulations are the meat of President Clinton's credit crunch plan, unveiled last March. The administration wants to make it easier and less expensive for people to get bank credit.

To that end, banking regulators proposed May 26 to exempt all loans under $250,000 from rules requiring an appraisal by a certified or licensed appraiser. The current exemption threshold is $100,000.

Business loans of less than $1 million also would be exempted. so long as real estate backing the loan was not the primary source of repayment, according to the proposal.

Because these changes would be made in existing rules, the agencies were required to solicit public comment on the proposal. The deadline for comments was July 19.

Surprising Intensity

The regulators knew that appraisers would oppose the proposal, but the agencies underestimated how much pressure the industry would generate. Prominent lawmakers like Rep. Charles Schumer, D-N.Y., and consumer groups like the Consumer Federation of America also have joined the opposition.

The main complaint: Looser appraisal rules would produce bad lending.

The Appraisal Institute, national trade association for about 32,000 appraisers, also hired the powerful Manatt, Phelps & Phillips law firm in the capital to make its case.

In one of about 4,000 comment letters filed on the appraisal proposal, Manatt Phelps charged the banking agencies with violating laws, including the Administrative Procedures Act, because the proposal to loosen standards includes no evidence to support the regulators' conclusions.

Manatt Phelps also noted that Congress gave the regulators power to reduce appraisal thresholds but only if they determine in writing that doing so poses no threat to the safety and soundness of the banking system.

That scared the regulators, who are planning to reopen the proposal for comments and to take a second stab at making their case, according to staff members working on the issue.

Regulators are convinced that looser appraisal rules would not lead to reckless lending by bankers, but they are worried about proving it.

"Can we come up with some more information to show why this would not cause a safety and soundness problem or present an undue risk?" asked Bob Miailiovich, associate director in the Federal Deposit Insurance Corp.'s supervision division. "People are working on it now."

Lee Cross, a spokeswoman for the Office of the Comptroller of the Currency, said her agency is surveying its examiners "to get a better sense of what recent experience has been on losses on real estate loans in that range, $100,000 to $250,000."

"Their case is weak, and they know it," said Donald E. Kelly, the institute's vice president for Washington operations. "It's a victory for the appraisers."

But the victory may be short-lived, as even Mr. Kelly conceded. "They are hell-bent on raising that threshold," he said.

Bankers hope so.

"The regulators should not be cowed," said Kenneth Guenther, executive vice president at the Independent Bankers Association of America. "The appraisers are trying to protect a very lucrative business, and the consumer groups are ... just going to insure that the consumer that they are supposed to represent pay unnecessary fees."

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