RULES EASE WAY FOR BANKS TO SELL STOCKS, INSURANCE.

Byline: Daily News Staff and Wire Services

Blurring the line between Wall Street and Main Street, national banks will be able to sell stock and insurance under new rules announced Wednesday by the comptroller of the currency.

Comptroller Eugene Ludwig called the rules ``a small step forward'' that could eventually result in ``a broader and less expensive array of financial services'' for America's communities and consumers.

The complex package streamlines the application process for banks to broaden their business services through new subsidiaries.

Currently, national banks must create separate and cumbersome bank holding companies, which are regulated by the Federal Reserve.

Ludwig said his agency, an arm of the Treasury Department that regulates 2,800 nationally chartered banks, will evaluate applications ``on a case-by-case basis.''

National banks are commercial banks whose charters are approved by the comptroller of the currency rather than by a state banking department. Bank of America and Wells Fargo are two of the larger institutions in that class.

Wednesday's action does not grant U.S. banks any new powers, just the right to apply for them.

Reaction to the plan broke along industry lines.

``This new framework gives U.S. banks the flexibility their competitors already have - choice in organizational corporate structures through an operating subsidiary,'' said Larry LaRocco, managing director of the ABA Securities Association, a unit of the American Bankers Association.

Big banking companies said they would wait for more details before commenting on the proposals.

``Once there is something more specific we will be happy to talk about it,'' said Susan Stanley, spokeswoman at BankAmerica Corp.

However, representatives of the securities industry complained that regulators are now giving the competitive edge to banks.

``Their action today will allow banks to own full-service securities firms, but securities firms will not be permitted to own banks. This tilts the marketplace in favor of banks,'' said Steve Judge, senior vice president for government affairs at the Securities Industry Association.

And the American Council of Life Insurance said it will launch an all-out fight to block the rules.

Some industry analysts said consumers should not expect one-stop shopping for stocks, checking plans, loans or insurance anytime soon.

Banks will take their time exploring these new opportunities, said Gerry Findley, a contributing editor to the ``Findley Report,'' a financial industry publication based in Orange County.

``It will be good for consumers because they will have a lot more outlets available to them. But it also might cost them something because all the things that are happening are not free,'' he said.