The Securities and Exchange Commission is expected to take another controversial step today regarding bank loan-loss reserves.

The SEC, working with the Financial Accounting Standards Board, wants to crack down on banks that are building excessive reserves. At a meeting of FASB's emerging issues task force in New York, the SEC plans to endorse a FASB decision to crack down on banks double-counting loans when calculating reserves.

If a bank sets aside a reserve for a particular loan, it may not also include that loan when setting general reserves, according to an April 12 FASB publication designed to clarify two existing rules on loan-loss accounting. The SEC will endorse the publication as guidelines for industry practice.

Separately Wednesday, FASB proposed delaying implementation of its derivatives rule by one year. If finalized, as expected, FAS 133 will take effect June 15, 2000. Industry leaders complained that the original the implementation date conflicted with year-2000 preparations.

SEC officials have clashed with bank regulators over loan-loss reserves repeatedly in recent months.

Last fall the SEC delayed SunTrust Banks Inc.'s acquisition of Crestar Financial Corp. until it agreed to restate earnings from 1994 to 1996 and cut reserves by $100 million. This week, Bankers Trust Corp. said the SEC is currently examining its loan loss reserves.

SEC officials have argued that some financial institutions are bulking up reserves, which can affect earnings and investor perceptions. Bank regulators counter that it is healthy and appropriate for banks to maintain significant reserves.

In March, the SEC seemed to be backing off, signing a joint statement with bank regulators to study the issue and issue new rules within a year. So the SEC's decision to move unilaterally, confirmed by agency officials Wednesday, surprised and even angered some bankers and trade groups.

"We were not given an opportunity to comment on this article, and we believe that it is important enough that we should have been," said Donna Fisher, director of tax and accounting at the American Bankers Association.

"I honestly see it as a direct violation of the SEC and the FASB's own due process procedures," said one banker. "Most in the industry are just baffled."

Because the FASB publication is not a formal proposal for comment, banks will not have an opportunity to contest the guidelines.

Nor will they have much time to comply. Any bank that needs to remedy its accounting practices will have to make a one-time adjustment in its first fiscal quarter ending after May 20.

"There could be 27 banks out there that make adjustments, or there could be 1,000," said Craig A. Dabroski, an accounting specialist at America's Community Bankers. "It's hard to tell."

"We don't believe the FASB article will result in any material changes for most banks," said Kevin Bailey, deputy comptroller for core policy at the Office of the Comptroller of the Currency.

"We don't believe banks presently have an excess reserve situation that would compel them to lower their reserves," he said.

The loan-loss accounting issue has plagued the banking industry for months. Many banks feel squeezed between two forces: banking regulators who want financial institutions to set aside healthy reserves in anticipation of an economic slowdown, and securities regulators who claim banks have over-reserved in order to manipulate their earnings.

"The banking regulators are saying one thing, and the SEC is saying another," said an industry source.

"The SEC apparently wants to show that it has some value to add as a regulator of banking activities," said another bank executive. "You saw it in the derivatives rule, you see it in this loan-loss reserves attack ... it's popping up all over like poison ivy."

SEC officials refuse to discuss the issue in detail, but issued this statement: "The SEC's concern all along has been on ... bringing about the most accurate and transparent information to investors."

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