The bank regulatory legislation which passed early Sunday morning, goes a long way toward curbing the type of insider dealings that were highlighted during the hearings last year on the banking affairs of former budget director Ber Lance!

Overdrafts sweetheart loans and interlocking directorates are among the questionabel banking practices outlawed by the legislation.

Bank board members will no longer be able to plead ignorance as a defense when questioned by regulators about self-dealing by their bank's top executives.

Bert Lance's banking activities in Georgia prior to joining the Carter administration was only the most publized example cited as showing the need for legislation. In recent years, insider dealings have caused the collapse of U.S. National Bank in San Diego and Franklin National Bank in New York.

The notorious Texas rent-a-bank scheme in 1976, during which several banks were taken over and looted, showed how regulators had little to say about the change in control of a bank. The new legislation give regulators 60 days to decide the qualifications of a would-be bank buyer.

Pickup: For a time

Among the bills now be able to move against individual bankers, while in the past they could only take action against the institution. Also, bankers can be removed for personal dishonesty and wilful and wanton disregard for the safety and soundness of the institution.

Overdrafts by insiders (officers, directors and major stockholders) are prohibited. Insider loan total exceeding $25,000 myst be approved by the bank's board of directors. Loans from institutions with which the insider's bank has a correspondent account must be reported to the board, which, in turn, must report the information to the regulators.

Depository institutions in the same geographic areas cannot exchange board members. And large financial institutions cannot have interlocking boards, regardless of georgraphy.

Requires banks to report a list of major shareholders and the aggregate amount of insider loans to regulatory agencies and the public.

Two of the most controversial sections of the bill did not make it to a vote on Sunday morning. One would have closed a loophole in the Clayton Act that permits interlocking director rates between banks and insurance companies.

That section was successfully eliminated by Rep. Garry Brown (R-Mich.), who fought back two efforts by St. Germain in committee and the House to reintroduce it.

Another section would have limited the size and non-banking interests of bank holding companies. St. Germain plans to reintroduce, the holding company measure in the 96th Congress.