To save the neighborhood S&L

Certainly no responsible official in government or industry is saying that the US thrift industry -- comprising savings and loan associations and mutual savings banks -- is in any danger of ''crashing.'' But the public and federal government would be remiss in ignoring the considerable difficulties of the thrift industry at this time of high interest rates and the changes taking place in the nation's private financial structure, including the development of nationally based savings and investment ventures linked to consumer firms such as Sears and American Express.

This past weekend, for example, federal regulators merged four ailing Chicago-area savings and loan associations. That is the sixth such federally induced merger this year. Then, early this week, a new study released by the Brookings Institution concluded that as many as 1,000 of the nation's 4,500 thrift institutions might fail or be forced to merge in the next two years, primarily because of the wide gap between return on low-interest mortgages and the high interest rates that must be paid to attract savings. Since S&Ls can be found in every neighborhood and community, and are the main source of home mortgage funds, it is vital that they be protected as much as is possible.

What reasonable aid, however, is possible at a time of tight budget restraint and soaring deficits? For starters, proposals now being mulled by the Federal Home Loan Bank Board would grant the thrift industry broad new powers. These include letting S&Ls form subsidiaries to make business loans, offer mutual funds and money market funds, lease equipment, and invest in commercial real estate. Legislation to that effect is currently bottled up in the Senate Banking Committee because of resistance from commercial banks.

Granting such new powers to thrifts would certainly be far less costly to taxpayers than proposals now being heard in Washington for direct outlays of federal money. Fernand St. Germain, chairman of the House Banking Committee, is proposing a $7.5 billion fund to assure the solvency of thrift institutions whose net worth slips below 2 percent of assets. The thrift industry itself is seeking up to $10 billion in federal assistance.

It is crucial that the thrift industry, whose net worth fell 15 percent last year, be maintained. To bail out up to 1,000 failing or endangered S&Ls would impose enormous strains on the federal insurance program. Thus, proposals to grant thrifts authority to provide new services warrant special attention.

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