Facing the specter of recession and the likelihood of slower revenue growth in retail financial services, consumer bankers are at a crossroads.

Times have been good this year, with hot sales of mortgage products, steady growth in bank brokerage activities, and improvements in the quality of credit card portfolios.

But uncertainty looms. Consumer confidence is waning, and bankruptcy filings are at record levels, even as borrowing rises and loan delinquencies fall. Turbulent financial markets and competition from nonbanks are eroding banks' revenue-generating possibilities.

Bankers "are trying to gauge just how much of a problem it is," said Joe Belew, president of the Consumer Bankers Association. "The question they have is, is it a slowdown or a huge black hole?"

As industry leaders gathered for the CBA's 78th annual retail executive conference, these issues were at the forefront of the discussions. The meeting, which began Friday and concludes today in Aventura, Fla., was expected to draw 250 high-ranking executives.

Economists said consumers are taking advantage of low interest rates and increased competition in financial services to pay down their debts, refinance loans, and bargain for the lowest-cost products.

Based on these factors, the consensus among bankers is that a slowdown is all but inevitable.

"There is a general and realistic concern about what a slowdown will bring to us. It will be tough," said A. William Schenck 3d, chairman and chief executive officer of Fleet Mortgage Co. The Columbia, S.C. unit of Fleet Financial Group, like many other mortgage companies, has seen record volumes of originations and refinancings in recent months.

Many bankers remain optimistic, at least about the short term. "When we begin to see the effects of lower consumer confidence, I think it will be easier to market to retail customers," said Kenneth Stevens, chairman and chief executive officer of Bank One Corp.'s retail group.

"When times are uncertain, people go back to the people they trust," Mr. Stevens said. "It's easier for us to talk about being a financial adviser."

That time may be approaching. The consumer confidence index has declined for three consecutive months from its historic high, according to the Conference Board, a New York-based organization that surveys consumer attitudes and calculates the index. New numbers for October are due out Tuesday.

Lynn Franco, assistant director of the consumer research center at the Conference Board, said expectations were measured at 95.6 on the index in September, a sign of moderate, less robust economic growth than in previous months.

Global market turbulence has dampened hopes for future growth, Ms. Franco said. "It's made consumers more uncertain. It's nothing real and concrete, but there is an apprehension about the future."

Industry regulators have also been sounding warning bells on consumer credit quality. Bankers have been furiously building less traditional businesses such as home equity lending, high-LTV lending, and subprime consumer financing, and surveys have indicated a slippage in credit standards in those businesses.

"The combination is a potentially troubling potion," said Julie L. Williams, acting comptroller of the currency. Ms. Williams has implored banks to monitor these businesses more closely. "We are calling on banks to take self-directed action to firm up standards," she said.

"The good news is that banks are well-capitalized and have considerable market power," said James J. McDermott Jr., chairman of Keefe, Bruyette & Woods. "The challenge is the many nonbank companies and marketers that will decide they need to offer financial services too."

Despite the challenges of market volatility, declining consumer confidence, concerns over credit quality, and outside competition, bankers said there are still opportunities to be found in the retail market.

Deposits are up at Bank One, Fleet, and other large regional banks. Mortgage refinancings, while cutting into sales of other products like home equity loans and personal credit lines, are creating liquidity for consumers to spend more, bankers said.

With the growth in deposits, "we will have a better starting point next year," Mr. Stevens said.

Other bankers said electronic delivery will help reduce costs in retail banking and boost revenues. Visa USA projects it will have 11.6% market share in debit card purchases by 2000, up from 10.4% of the $5.8 trillion market this year.

"There is significant growth potential," said Thomas Layman, senior vice president and chief economist for the card association. "It is eating into traditional cash and check markets."

Wiser allocation of marketing budgets will also make a difference, observers said.

"Retail businesses have been an important balance to bank operations," Mr. McDermott said. "The most successful institutions have been gathering intelligence on their customer bases and marketing more efficiently to them."

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