he recently concluded annual meeting here of the National Savings and Loan League, though generally upbeat, served as a reminder of the thrift industry's dilemma.

This is, as planners of the meeting underscored in adopting a theme, "An Industry at the Crossroads."

Battered by losses which could reach $5 billion this year, the savings and loan industry wants regulatory shackles removed. With fewer regulations, the reasoning goes, the industry would be in a stronger competitive position.

However, at least one group of regulators is crippling the industry by changing the rules too fast, say S&L officials.

And while the S&L industry continues to push for parity with commercial banks dramatic changes are taking place in the financial services industries.

As S&L officials ponder their Catch-22 of regulatory constraints versus accelerated deregulation, a more formidable group of competitors has emerged.

Indeed, the new competitors in the financial services industries threaten to change the course of banking and the thrift industry.

Just as the National Savings and Loan League prepared to kick off its meeting here, Sears, Roebuck and Co., the nation's biggest retailer, served further notice of what's in store for financial institutions.

Sears announced it would acquire Dean Witter Reynolds, the nation's fifth-largest securities firm. What's more, the giant retailer said it would buy Coldwell, Banker & Co., the nation's largest independent real estate broker.

Similar steps have been taken over the past year or so by other large nonbank companies in an attempt to control major shares of the financial services sector.

Despite mounting losses in the savings and loan industry--a record $1.5 billion in the first six months of this year--most officials attending the National League's convention last week sounded like men spoiling for a fight.

Bring on the competition, they were saying to anyone who would listen. However, they should be allowed to compete without the handicap of regulatory constraints, the S&L officials emphasized.

The National League is the trade group which represents about 250 S&Ls, most of them the industry's larger institutions. And while stiffer competition and high interest rates have depressed earnings in the industry, league members generally have been able to ride out the storm.

Large and medium-sized thrift institutions will survive in one form or another, league members were assured by Bryce Curry, president of the Federal Home Loan Bank Board of New York.

His advice to those with less hope of surviving: "Go out if you can and merge while you still have a deuce. At the same time, demonstrate through any method that you can that you can be as imaginative as you can in terms of trying to cut your losses or hopefully restore the institution to profitability somewhere down the line."

Curry suggested that S&L officials avoid battles they can't win "and devote your energies to more productive efforts."

With the industry clamoring for change in a new regulatory and competitive environment, said Curry, "my best judgment is that the genie is out of the bottle and you won't be able to put it back."

Most of those attending the National League's meeting appeared to agree with its newly elected president, Robert B. O'Brien Jr., that the traditional S&L will eventually disappear.

"We are all going to become one big homogenized family financial supermarket," O'Brien said during an interview.

Besides the fact that regulators and economists are advocating change, market pressures and nonbank institutions are forcing it, said O'Brien. "So I say let's get on with it."

Two major bills scheduled for hearings by the Senate Banking Committee are designed to do just that. The bills would restructure financial institutions, substantially increasing their authority to provide a variety of financial services.

One of the bills, a proposal from the Federal Home Loan Bank Board, would give S&Ls authority to engage in practically any business they choose.

On the other hand, a more comprehensive measure by Banking Committee chairman Jake Garn (R-Utah), would substantially increase powers of banks as well as S&Ls.

Meanwhile, Treasury Secretary Donald Regan has said the administration would seek more powers for banks and savings and loan associations. Regan's announcement last week came after much grumbling among thrift industry officials that the administration was unsympathetic toward their plight.

It's not clear how broad the administration's proposals will be. Early indications are that it will seek powers already outlined for banks and S&Ls in Garn's bill.

Meanwhile,, the National League and other industry groups say a panel of federal regulators threatens to destroy the industry before it's given new powers to compete.

And the villain, in the minds of S&L officials, is Treasury Secretary Donald Regan, who chairs the Depository Institutions Deregulatory Committee. principal aim of the DIDC, which was established by Congress last year, is to phase out interest-rate ceilings on deposits over a six-year period. The panel, which is composed of representatives from the financial regulatory agencies, is further responsible for eliminating by 1986 the one-fourth percent interest differential enjoyed by thrifts.

The U.S. League of Savings Associations has already sued the DIDC for what it considered illegal actions and promises to seek redress in Congress.

The DIDC has exceeded its authority in deregulating interest rates too rapidly, said Richard S. Lawton, immediate past president of the National League.

"Everything they have done has just set us back one more step," Lawton said.

Some industry leaders have suggested Congress abolish the DIDC, but Lawton stopped short of that. Instead, he suggested Congress instruct the committee to adhere to the provisions of the Depository Institutions Deregulation and Monetary Control Act.

"I don't believe Congress is going to repeal the DIDC as a regulatory body at this point," said Lawton. "But I would hope that it give the DIDC some further instructions on what the intent of (the law) was."

Lawton said industry officials did not anticipate that the DIDC would attempt to accomplish its goals in one or two years rather than six.

Lawton, who is also chairman of Washington-Lee Savings and Loan Association in McLean, said the thrift industry needs more time "to structure our assets to compete in the marketplace." Most of the DIDC's controversial rate deregulation this year has been initiated by Regan.

Questioning Regan's motives, Lawton declared: "I am fearful that he doesn't view the savings and loan business as a necessary part of our financial structure.

"He may be of the opinion that we should be eliminated or merged into the commercial banking system, although I think he has gone on record saying that is not his opinion."

However, Lawton added, "we cannot take heart in anything the DIDC has done in its deregulation efforts."

In remarks to colleagues last week Lawton charged that the Treasury Department, either through its own actions or "through its control" of the DIDC, has treated S&Ls unfairly.

In its most recent action, the DIDC, despite strong objection by the chairman of the Federal Reserve Board and the Federal Home Loan Bank Board, voted to increase the passbook rate by one-half percent.

The change would allow banks to pay a maximum 5.75 percent instead of 5.25 percent and S&Ls 6 percent instead of 5.5 percent on passbook savings accounts.

That, said National League president O'Brien, would add a half billion dollars a year to the interest costs of S&Ls, with no prospect of attracting new deposits.

On that issue, at least, S&Ls apparently will get a reprieve. Regan disclosed at a press conference Friday that he has changed his mind about increasing the rate on passbook savings. Depositors, he explained, are transferring funds from existing accounts to the popular All Savers certificates, which pay rates just over 12 percent.

The increase in passbook rates was scheduled to begin Nov. 1. However, Regan said he will ask the DIDC, which approved the increase by a narrow 3-2 vote last month, to delay the change "until such time as we can find out the effect of this All Savers certificate on passbook savings."

"These kinds of actions increasing the passbook rate simply make no sense in a year when our losses are expected to top $5 billion," said O'Brien.

What the industry needs, he said, is more time "to adjust to the new economic reality in this country."

"What we didn't bargain for," said Lawton, "was the appointment of an investment banker as Treasury secretary who doesn't appreciate our business."

Regan had been chairman of Merrill Lynch before he was named to head Treasury.

The only alternative for the savings and loan business, said Lawton, is to "look to our friends in Congress for relief from these destructive policies" of the DIDC "which is chaired by that investment banker."