One quarter of the country's savings and loan associations will not survive the next two years at current loss rates, unless Congress passes legislation this session to help the savings industry, Federal Home Loan Bank Board Chairman Richard T. Pratt warned yesterday.

In a letter to Senate Majority Leader Howard H. Baker Jr. and in testimony before a House committee, Pratt called the need for passage imperative. The legislation is designed to give short-term assistance to thrift institutions through an exchange of notes as well as to aid them in the longer term by allowing them to diversify their lending activities, thereby softening the effect of volatile interest rates.

Pratt cited statistics showing a bleak outlook for the industry this year and next, even if interest rates drop to 9.5 percent. They averaged 12.3 percent through August of this year. In the first seven months of 1982, four out of five savings and loans were operating in the red. Losses through July amounted to $3.9 billion, compared with $2.3 billion in the same period last year.

Should interest rates continue at 9.5 percent through the end of 1983, the reserves of 1,334 S&Ls will fall below their legal limits, thus requiring the government to aid them or merge them out of existence. And 227 will become insolvent. If interest rates average 13.5 percent through next year, 780 S&Ls will go bankrupt.

Moreover, savers in search of higher interest rates elsewhere continue to withdraw more money than they deposit. The net loss in 1981 was $25.4 billion; it amounts to $10.8 billion thus far this year. Moreover, mortgage activity is down from $29.7 billion in the first half of last year to $21.7 billion this year. Last year, S&Ls were drawing only 31 percent of new mortgage dollars, compared with about 50 percent during the 1970s, according to Pratt's figures.

"Thus, in the absence of a truly extraordinary drop in short-term interest rates, there is virtually no prospect for the industry to become profitable this year," Pratt said. "It appears that 1983 will be similarly bleak."

Pratt also met yesterday with presidential counselor Edwin Meese III, who reaffirmed the administration's support for thrift legislation. The bill passed the Senate banking committee after controversial provisions allowing banks to engage in securities activities were deleted. The banking industry, which denounced the compromise measure for giving banks too few powers in comparison with thrifts, has been negotiating changes with the committee. The leadership of the banking industry is scheduled to meet next Thursday and Friday to vote on whether to back the amended bill.

Therefore, the bill is not expected to go to the floor before Sept. 27 at the earliest.

Meanwhile, the House Banking Committee has scheduled hearings for next week on provisions of the legislation that were not included in the version passed by the House last fall. The resulting bills will then have to go to conference. With Congress scheduled to adjourn Oct. 8, the fight to get thrift legislation is going down to the wire.