Treasury Under Secretary John D. Hawke Jr. insisted in an interview last week that the mutual thrift charter will not be eliminated when the bank and thrift industries are merged.

"We have no intention of doing away with mutuals," Mr. Hawke said.

Congress gave Treasury a March 31 deadline for drafting legislation melding the bank and thrift charter. Mr. Hawke said the bill will allow existing mutuals and their holding companies to continue operating as they do now, and will allow new mutuals to be chartered.

Some industry lawyers have been warning that mutuals may be harmed by the legislation.

"You play roulette when you trust the Congress to keep anything in place," said Douglas Faucette, a partner with Muldoon, Murphy & Faucette law firm here. "If you think Congress is going to change things for the better, sit back and enjoy the status quo. But there is a real risk there."

Others point to a budget bill that passed the House late last year as evidence that Congress has no intention of changing the mutual form of ownership.

That bill preserved the mutual charter. The measure was removed, along with other thrift charter provisions, from the spending package in conference.

"There was no contest in Congress about whether to put mutual preservation language in these bills, so there is no basis for anybody saying that the mutual charter is in trouble," said James J. Butera, a partner with Butera & Andrews. "We're just hearing the scare tactics of lawyers who are saying, 'You better hire our firm and convert now.'''

Paul Schosberg, president of America's Community Bankers, added that whenever policymakers mull charter reform, rumors begin circulating that the mutual charter will be done away with.

"Every time this comes up, we deal with it by talking to the top people in town," he said. "You can't find anybody in a position of real influence that is in favor of ending mutuality."

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