Recently approved legislation and falling interest rates may signal better times for the savings and loan industry, but in a new competitive environment interstate branching in metropolitan Washington may be the only viable solution to the problems of some institutions.

Convinced of that, the two biggest S&Ls in the District have put the interstate branching issue squarely before the Federal Home Loan Bank Board. Less than a month after National Permanent Federal asked the regulatory agency to change its charter, Columbia First Federal has filed an application to become a Maryland association.

Approval of the two applications could have far-reaching effects on the savings and loan industry in the area as well as significant implications for the city's tax base.

Although the District will begin a three-year phase-out of the gross earnings tax next year, both S&Ls would save considerable sums by moving to Maryland. National Permanent pays about $2 million annually in gross earnings taxes, and Columbia First estimates it would have saved at least $3 million between 1979 and 1981 if it had been a Maryland-based S&L.

The 6 percent tax on gross earnings of financial institutions -- a sore point in Washington's business community -- has caused an added burden to the financially strapped S&L industry, according to an official at a leading accounting firm.

"They're losing money but paying a substantial gross earnings tax," he said. "If they had been required to pay a tax on net income, they wouldn't have to pay any while they're in a losing situation."

National Permanent and Columbia First have combined assets of nearly $2 billion. If they are allowed to become Maryland associations, assets of all District-based S&Ls would fall below $2 billion -- less than those of either of the city's two biggest banks.

Earlier this year, the bank board allowed Perpetual American Federal to move its home office from the District when it approved a merger between the $1.4-billion-asset S&L and Washington-Lee Federal of McLean.

The bank board subsequently approved Perpetual American's takeover of Guardian Federal of Silver Spring, clearing the way for Perpetual to establish branches throughout Virginia, Maryland and the District and giving it a decided edge over competitors.

Now, National Permanent and Columbia First, which had been Perpetual American's biggest competitors in the District, are seeking parity as well as freedom to compete favorably against an influx of financial services giants.

District S&Ls have failed repeatedly to win support for their argument that metropolitan Washington is a common market and that they should be allowed to follow their customers across state lines. Meanwhile, S&Ls from adjacent states and other financial services industry competitors have saturated the area.

"We're saying, Mr. Bank Board, give us the same break," National Permanent's president, Edgar F. Peterson, commented.

National Permanent would move its home office to Langley Park, where it already operates a branch, and Columbia First would shift its main branch to Bethesda. Both offices are protected from the ban against interstate branching by a grandfather clause that went into effect in the 1950s.

Both Peterson and Dewitt Hartwell, his counterpart at Columbia First, insist that their branch operations in the District won't be affected by a change in their charters.

"We don't plan to desert the District," Hartwell insists.

"Management of National Permanent has a responsibility and will continue with that responsibility of providing funds for housing in the District," Peterson adds.

On the other hand, 65 percent of National Permanent's business is in Maryland and Northern Virginia, he explained. And 39 percent of the dollar amount in mortgage loans and 47 percent of the total number of loans made by Columbia First are in Maryland.

"When you get Sears, Roebuck & Co. and Merrill Lynch getting into the banking business, you have got to try to position yourself for what's coming down the road," Peterson asserted. "What the savings and loans are trying to do is position themselves so they can compete."

That is precisely what the bank board has been attempting to accomplish over the past year. Given its recent approvals of interstate mergers and the fact that de facto interstate branching already exists in the metropolitan area, the board can hardly justify a rejection of Columbia First and National Permanent.