Yet another challenge of the D.C. government's authority to regulate business in the District has been raised within the federal government.

Almost as an afterthought to the enactment of the D.C. interstate banking law, a Congressional Research Service study has cited potential legal problems with the act, which went into effect last week. The study questions whether the city can authorize interstate bank acquisitions, because the District isn't a "state."

The timing of the study, which also was made public last week, is especially interesting because there was no challenge of the city's authority to approve banking legislation when hearings began almost a year ago.

Although this latest flap may be only coincidental, it is, nevertheless, part of a recent pattern of federal challenges to the District's authority under home rule to determine the course of the city's economic growth. At least three times within the past month, vestiges of a paternalistic federal government have interfered with the D.C. government's right to make key decisions affecting business.

First, the Justice Department filed a frivolous suit to block construction of Techworld, the ambitious high-technology trade mart, hotel and retail complex slated to be built opposite the D.C. Convention Center. The D.C. government approved a plan for Techworld's developer to convert a one-block section of Eighth Street NW to an enclosed pedestrian plaza connecting major components of the project. But Justice has filed a lawsuit to reclaim the street from the District, because the walkway supposedly would block the vista between the National Portrait Gallery and the University of the District of Columbia's Carnegie Library.

Even some preservationists who oppose the plans for Techworld believe Justice may have gone a bit too far.

Then there is the case of the loopholes, letters and legal notices that unfolded in late March, when the House Banking Committee warned of potential flaws in the new D.C. interstate banking law. Banking Committee Chairman Fernand J. St Germain (D-R.I.) and Rep. Stewart B. McKinney (R-Conn.) fired off a letter to the comptroller of the currency, calling for a moratorium on approval of applications to establish banks under D.C. charters until so-called loopholes in the District law can be closed.

According to St Germain and McKinney, an out-of-state bank holding company could acquire a D.C. bank and conduct insurance activities in states covered by a reciprocity provision in the new law. The congressmen contend the possibility exists because the D.C. Code permits locally chartered banks to engage in insurance activities that are much broader than those that are permissible under the Bank Holding Company Act.

A spate of legal notices published recently helped to explain the nervousness on Capitol Hill. Several out-of-state organizations are seeking charters to operate banks in the District, rather than acquiring existing local banks as they are permitted under the new D.C. law.

The applications for D.C. charters raise some intriguing questions, but St Germain and McKinney are asking the wrong ones. Whether the new charters are being used as springboards for launching insurance businesses across state lines is only a matter of conjecture. Whether the new charters are being sought to avoid compliance with D.C. investment requirements linked to interstate acquisitions is also a matter of conjecture. Although owners of new charters "won't come under the rubric of the [D.C. banking] act," the District doesn't "intend to let them get around their community investment commitments" vows Councilmember Charlene Drew Jarvis.

The more intriguing question, it seems, is how many banks can the District support. Approval of pending applications -- more are sure to be filed -- and completion of current interstate merger agreements would give the city at least 22 commercial banks.

In the meantime, the District is authorized to issue bank charters under the D.C. Code, which Congress enacted in 1901. The new interstate banking law amends the code to establish the Office of Banking Commissioner, which would have authority to issue charters in the city.

It's not the D.C. banking law that contains loopholes, but rather federal banking laws. St Germain and McKinney prefer putting the onus on the D.C. government rather than doing something about the legislative languor that has marked Congress' handling of the national interstate banking issue.

To bottle up applications for new D.C. banking charters until Congress resolves the issue is, as Jarvis testily observed in a letter to St Germain and McKinney, "both unreasonable and prejudicial."