Sovran Financial Corp. of Virginia spent millions of dollars this year to buy banks in the District and Maryland and to run ads touting the convenience of banking at a company with offices in all three of the jurisdictions of metropolitan D.C.

But Sovran's campaign failed to tell consumers that no amount of money can purchase full interstate power for a bank, because, while federal law lets holding companies such as Sovran own banks in different states, it bars such banks from accepting deposits for each other.

The restriction is no small stumbling block for players wishing to become regional banking giants, as it puts them at a disadvantage when competing with savings and loan institutions. The restriction is a hassle for bank customers in the Washington area, who often live in one jurisdiction and work in another. And it's costly to bank holding companies because it requires that identical and often redundant office operations be maintained in each jurisdiction.

The restriction stems from a 1927 federal law that bars banks from branching across jurisdictional lines. The law defines a branch as an office established by a bank to cash checks, take deposits or make loans.

It means, for example, that a customer of Sovran's Virginia bank can't deposit money in Sovran's D.C. or Maryland banks, even though other legal crinkum-crankum does let the customer cash checks or apply for loans at any Sovran office.

"It's very confusing," said W. Kelly Scott, Sovran's marketing chief. "How do you explain it to consumers?"

William M. Ellis, a senior vice president of Shannon & Luchs, which, like most real estate companies, withdraws and deposits millions of dollars each week, agreed. "From a logical standpoint it doesn't make sense. Why can't I deposit money from the same places where I can withdraw money?" he said.

To get full-service banking across jurisdictional lines, consumers must turn to thrift institutions, which aren't bound by federal limitations on interstate deposit-taking.

The result is a market advantage for savings and loans that is highlighted in areas like the District, where the natural outline of the business market cuts across several man-made borders.

Bank holding companies, such as Sovran and United Virginia Bankshares, which also own banks in the District and Maryland, say they are pushing to gain equal footing.

The companies won't discuss strategy, but industry sources say the companies quietly are working with the U.S. Comptroller of the Currency, a key federal regulator of banks, to find a legal way for banks owned by one company to take deposits for each other across jurisdictional lines.

The plans could be foiled by the Federal Reserve Board, also a key banking regulator, which in the past has not allowed such activities among banks owned by holding companies.

Regulators would not confirm the discussions and had no comment last week. Privately, however, officials in the comptroller's office said they would welcome a solution.

Success would pack a national punch, coming as a major step toward true interstate banking.

The action likely would draw fire -- and lawsuits -- from the thrift industry and from smaller bankers worried about competition from larger brethren.

But Sovran and other bank companies say they are confident that support from consumers will help win banks the right to offer the same service thrift institutions here can.

Perpetual Savings Bank, a Virginia-based thrift with offices in the District and Maryland, boasted in recent ads, for example, that customers can deposit money at any of its offices.

"It's the difference between banks that claim they're full service and the only one that really is," the ads proclaimed.

Although S&Ls such as Perpetual have won branching rights in exchange for buying an ailing thrift and taking it off the government's hands, the practical effect is that thrifts can obtain such rights where banks cannot.

Bankers here think they can level the playing field.

"Can't you get around restrictions by having regulators intrepret laws a different way?" said a bank executive at a major bank holding company in the District area.

"There's a lot of gray areas in the law," the executive said. "We want to get the regulators to shade the gray in our favor."

Technology and deregulation have blurred differences among thrifts and banks to the point where most consumers can't tell one type of company from another, banking industry analysts and executives say.

"Savings and loans are able to offer almost all of the same products and services that banks can offer," says a draft study to be released soon by the American Bankers Association on the difference between thrifts and banks.

"Thrift institutions and commercial banks have moved from operating with a different customer base . . . to competing for the same customers," the report said.

Industry leaders say that such rapid market changes raise questions about branching unforeseen by Congress when it passed major banking legislation earlier this century, and about the fairness of maintaining legal distinctions -- and market advantages -- among financial service companies.

Lawmakers have been unable to agree on revisions to banking laws to address the issues. The debate over interstate deposit-taking is the latest example of how, in recent years, financial executives have had to turn instead to courts and regulators to clarify what services thrifts and banks may sell and where they may sell them.

Merging banks from separate jurisdictions violates federal law because it produces branches across state lines.

To side-step the limitation, bankers have concocted bank holding companies, corporations that literally "hold" banks as separate business operations.

The device catapults bankers across borders, but creates the inconvenience and expense of having to maintain duplicate operations. "Thrifts definitely have an advantage," said Roger Powell, thrift analyst for Alex. Brown & Sons Inc. "Combining operations cuts costs."

Even though no federal law prohibits S&Ls from branching across jurisdictional lines, federal regulators of thrifts until recently barred S&Ls from branching across jurisdictional lines.

The idea, the thrift regulators say, was to apply the same restrictions to S&Ls that federal law applied to banks.

But since the mid-1970s, deregulation and changing interest rates have dragged the S&L industry through its most tumultuous period since the 1920s, and regulators had to relax policy to help thrifts survive. Failures Haunt S&L Industry

Record S&L failures, which have threatened to bankrupt the federal fund that insures thrift deposits up to $100,000, have forced regulators to loosen branching rights as a way to induce healthy S&Ls to buy ailing ones. Selling, rather than liquidating, a thrift is less costly to the federal insurance fund.

"The S&L crisis has precipitated the relaxation of bank board policy, no doubt about it," said Perpetual President and Chairman Thomas J. Owen. "The S&L crisis gives the bank board the courage to move in the face of a lot of congressional jawboning."

Neil E. Cotiaux, spokesman for United Virginia, said that although the holding company is eager to find a way to take deposits through offices across jurisdictional lines, it will not act rashly and risk a lawsuit. "We won't act until we get the green light from federal regulators," he said.

Earlier this year, however, officials at Sovran said they were "exploring" the legality of using certain types of automated teller machines to take deposits across jurisdictional lines. Sovran Chairman C. A. Cutchins III even hinted the company will proceed despite the risk of court challenges from competitors.

Sovran won't comment further, but bank industry analysts say that, in addition to discussions with regulators, the company probably is considering using teller machines in a manner that is being challenged in a case that the Supreme Court has been asked to hear.

In the case, a group of independent bankers has sued the Comptroller of the Currency over his policy that an automatic teller machine is not a branch under federal law if the machine is used by a bank's customers but is neither owned nor rented by the bank. By legal definition, machines owned by banks or thrifts are branches.

Unlike banks, thrifts can own and operate automatic teller machines anywhere they want. That gives thrifts an advantage even if they have not yet won the right to branch interstate with brick-and-mortar offices. "Thrifts can be more accessible to consumers," said Sylvester Johnson Jr., an analyst for the Federal Reserve in Atlanta. "That just might be an incentive for someone to go with a thrift rather than a bank."

If the Supreme Court affirms or lets stand a lower court's ruling, it will bolster the notion that banks may use machines to accept deposits from other jurisdictions.

If, however, the Supreme Court rules that the machines in question are branches, the result would be felt far beyond teller machines, lawyers for the Comptroller argue.

"It would mean that telephones, mailboxes, electronic devices used to transfer funds, or grocery stores that cash checks would, for the first time, be considered branches," one of the lawyers said.

The ability to take deposits across jurisdictional lines using machines would be a great triumph for banks, but it still would leave banks far behind thrifts. Bankers argue that real parity among thrifts and banks can come only through a shift in regulatory policy that would permit banks to take deposits across jurisdictional lines by opening branch offices.

Until the ATM issue is settled or regulators decide if they will risk shifting longstanding interpretations of federal banking law, the thrift industry will continue to benefit from its ability to offer the convenience of deposit-taking in branches across state borders. Thrifts Are Often More Convenient

Ellis of Shannon & Luchs, for example, said the company's banking needs often make the use of a thrift more convenient. The company must deposit escrow money in accounts in the jurisdiction in which a property is being purchased.

With a bank, getting cash into the correct account requires that Ellis mail a deposit or drive it to a branch in the jurisdiction where the account was opened.

With Perpetual, he said, he can deposit money across the street from his Bethesda office and know the funds will be credited to the proper account in Maryland, Virginia or the District.

"It's so much easier to deposit in one place and have the money go where you want it to go," Ellis said. "That's the convenience, in a nutshell."