The chairman of the Federal Reserve yesterday urged passage of emergency legislation to help savings and loan associations and mutual savings banks without waiting for a comprehensive overhaul of the banking industry.

Paul Volcker used the blunt language of politics when he told the Senate Banking Committee, "There is no leverage in the regulators' bill for extracting action on other provisions. No one in the industry is that dedicated to the regulators' bill that they are going to swallow other provisions they don't like" to get it passed.

The so-called regulators' bill is the emergency legislation passed Wednesday by the House by a 371-46 vote. It would expand federal insurance agencies' range of options for assisting troubled thrifts before they fail. It sets up a schedule of priorities for merging the thrifts, starting with like institutions within the same state and ending with different financial institutions such as commercial banks in another state.

Before passage, House Banking Committee Chairman Fernand St Germain (R-R.I.) vowed not to brook any amendments in conference. Yesterday, Senate Banking Committee Chairman Jake Garn (R-Utah), who supports a more comprehensive bill, appeared more conciliatory. "I don't expect all of the (Senate) bill to pass; I'm not that naive. But we'll be sorry two or three years down the road if we don't look at other solutions" to the thrifts' problems. Treasury Secretary Donald Regan, speaking for the administration, supports the wider version.

What Volcker objected to in the Senate bill was an attempt, under the guise of emergency legislation to help thrifts, to ram through controversial issues relating to the first fundamental restructuring of the financial institutions industry in a half century. The controversy revolves primarily around interstate branching and mixing of investment with commercial banking.

Volcker reiterated the Fed's support for banks to underwrite municipal revenue bonds and its opposition to the sale of money market mutual funds by thrift institutions. While approving of safe new enterprises like travel services, he warned financial institutions against getting into riskier areas like securities. Yet he and several other speakers observed that the enormous changes now taking place in financial markets due to technology and consumer demand for tools to fight inflation will go ahead, no matter what federal regulators do. "What we can influence," Volcker added, "is the speed and direction of that change.

The Fed chairman was followed by an extraordinary panel of the chief executives of five of the most powerful financial institutions in the country today: Citicorp, American Express, Prudential Insurance, Merrill Lynch and Beneficial Corp. Walter Wriston, Citicorp's chairman, remarked, "The causes of the revolution in the delivery of consumer financial services today--and I say this with respect and no little envy--are sitting with me at this table."

Wriston then presented a chart with the names of these and other large nonbank corporations on one axis and 18 financial and service functions on the other, ranging from "take money/pay interest" to insurance, data processing, real estate and car rental. Commercial banks, Wriston complained, can do only five of the functions. American Express does 16; Sears, Roebuck and Prudential, four each; Merrill Lynch, 12--at the moment. Merrill Lynch Chairman Roger E. Birk confirmed a hint last week by former Merrill Lynch chairman Donald Regan that the brokerage firm was seriously considering adding another function: mortgage lending.

Garn told the nonbank group he was indignant, not because they had been so innovative, but because they enjoy an "unfair" competitive advantage thanks to government regulation of the banking industry. Citibank objected to the ban on insurance sales by commercial banks and the requirement that municipal revenue bonds be sold through bank holding companies, "an expensive, poor way to operate." The nonbank financial institutions generally supported the proposed legislation.