To ensure that New York's state-chartered banks don't lose ground, regulators there are seeking authority to match powers granted to national banks.

New York Banking Superintendent Neil D. Levin said interstate branching rules that become effective in June and new powers approved by the Office of the Comptroller of the Currency are making a national charter increasingly attractive.

"We don't want to give anybody reason to leave the state system," he said.

At the request of Gov. George Pataki and Mr. Levin, state lawmakers have introduced "wild-card" legislation, which would allow the banking superintendent to authorize for state banks any activity allowed to national banks. If the legislation passes, Mr. Levin could let state banks offer insurance and other products through operating subsidiaries-a power Comptroller Eugene A. Ludwig offered national banks in November.

Boosting the state charter is particularly important in New York, Mr. Levin said, because eight of the state's 10 largest banks hold a state charter.

Among the top five banks, only Citibank, holds a national charter. Chase Manhattan Bank, the state's largest, as well as Morgan Guaranty Trust Co., Bankers Trust Co., and Bank of New York, all hold state charters.

Officials at those banks would not say whether they would change their charters if the legislation fails. However, a spokesman for Chase Manhattan said his institution "strongly supports the measure."

State Sen. Hugh Farley, R-Schenectady, who chairs the Senate Banking Committee, has sponsored the legislation. A companion bill is backed by Assemblywoman Aurelia Greene, D-Bronx. A staffer for Sen. Farley said there is growing support for the proposal.

However, insurance groups are pushing for amendments. They want state insurance regulators to supervise any new bank insurance products, the staffer said.

Michael P. Smith, president of the New York Bankers Association said he expects industry groups to reach agreement.

Nevertheless, Mr. Levin said passage is "by no means a certainty."

The New York Legislature has resisted giving banks broad powers in one piece of legislation. Though 43 states have some type of wild-card law, New York lawmakers preferred to tackle new powers on an "issue-by-issue" basis, Mr. Smith said.

Mr. Levin argued that state legislatures are not keeping pace with the rapid changes in the banking industry.

Though many lawmakers reportedly are reluctant to give up powers to the Banking Department, Mr. Levin argued that the Legislature's influence over banks would diminish further if banks drop the state charter.

"We can't stop national banks from engaging in a particular activity, we can only stop state banks," he said. "With regard to the state Legislature's influence, they are absolutely better off if institutions remain state chartered."

Mr. Levin stressed that New York's wild-card proposal is less sweeping that many states. Nearly 10 states automatically match new powers granted to national banks.

Consumer groups, however, complain that the proposal requires no public input. Blair Horner, legislative director or the New York Public Interest Research Group, said the Banking Department should have authority to temporarily add a new bank activity, but any permanent change should be adopted by the Legislature.

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