A report that takes a look at the competitive posture of the area's financial services industry deserves closer examination by those who are affected. It just might change some minds.

District, Maryland and Virginia legislators may find the same report useful in deliberations on regional interstate banking proposals.

In short, the provocative report by Thierry Noyelle, a research scholar at Columbia University, should be required reading for executives and legislators who have an interest in the future of the financial services industry in this area.

In the three weeks since it was published, the Noyelle report has probably raised more hackles in the local business community than any that has been issued in the last 10 years. What's interesting about that is that some of its most severe critics admit that they haven't read the document, which was commissioned by the Greater Washington Research Center.

"I stand by the study," Noyelle replied when asked about lingering criticism. "They might not like some of the specifics of the report, but nobody has officially shot it down. Nobody has come forward and said, 'You guys don't know what you're talking about.' "

That much is true. Neither Noyelle nor the research center has received a formal complaint, refuting the author's findings. But, stung by Noyelle's conclusions, some executives in the financial services sector question the validity of the report.

"My rebuttal would be: It just ain't so," grumped William Sinclair, president of Washington Federal Savings and Loan Association. "To me, the study is out of date, archaic and negative."

Out of date? Hardly. Negative? That depends on the point of view. Candid? Yes.

Although the report is fairly blunt about certain shortcomings in the area's financial services industry, it is basically sympathetic, particularly toward banking.

To be sure, the report does not portray the region's financial services industry in the most favorable light. The author not only calls it weak, but also cites several examples of miscalculations that contributed to the current state of affairs. Noyelle's basic conclusion, nevertheless, is that the area's financial services industry is in the midst of a fundamental transformation caused by national and regional forces.

In that context, Noyelle cuts to the core of the issue, which really is the capacity of various segments of the area's financial institutions to withstand increasing competition from regional and national competitors. That obviously has strong implications for the area's economy, the concern that prompted the research center to commission the study.

It should be noted that most banks in the area, major insurance companies, mortgage lenders and securities dealers are either members of the research center or financial contributors. The irony of having their ox gored by a report that they helped to underwrite apparently doesn't sit very well with some executives.

The D.C. Bankers Association "basically supports" the efforts of the research center, according to a spokesman for DCBA President James F. Rogers. On the other hand, the spokesman emphasized that the DCBA "does not necessarily agree" with all of the findings in the Noyelle report.

"Insulted" by Noyelle's references to the area's savings and loan associations, Sinclair volunteered to rebut all findings about his industry. Noyelle's conclusion that the recession and long-term changes, including deregulation, have devastated the area's savings and loan industry is particularly galling to Sinclair.

"Hell, deregulation never devastated the savings and loan industry. It has restructured it," Sinclair maintained. "As far as competition is concerned, we welcome it. Deregulation put the S&Ls in a better position to compete."

Devastated may be too strong a term. But a combination of factors, including deregulation, which opened up a financially battered industry to further competition, has taken a toll on S&Ls. Washington Federal survived, but many did not. Only seven of the 18 S&Ls that operated in the District five years ago remain. Of all the mergers of local S&Ls in the past five years, only two resulted from consolidations of relatively strong associations. The others were essentially rescue operations.

In truth, local S&Ls are still recovering from the same factors that weakened them between 1980 and 1982. During that same period, the word devastated was widely used to describe the nationwide crisis. Indeed, statistics released by the Federal Home Loan Bank Board in November showed seven S&Ls in the District lost $10.6 million in the first two quarters of 1984. During the first quarter of last year, 64 percent of the federally insured S&Ls in metropolitan Washington were in the red.

A local bank official may have described the flap best by noting that some of the study's findings "may be like taking advice you don't want to hear from a doctor."