By summer's end, at least 34 states and the District of Columbia will have some type of interstate banking law in effect. Most of these already have regional reciprocal banking laws, a strong indication that state officials are convinced the concept is the answer to their regions' economic needs.

Still, there is little agreement -- even among bankers themselves -- on what regional interstate banking will mean for business and the consumer. Detractors say it will mean little; advocates perceive the banking trend as the greatest thing to come across the table since the introduction of sliced bread.

What's really in interstate banking for business? The Washington-Baltimore Regional Association, an alliance of business leaders formed to promote regional economic development, thought the question important enough to be the highlight of a seminar Tuesday in Greenbelt. More than 100 local business owners, chief financial officers and entrepreneurs turned out to hear a panel of regional banking executives offer answers. Even some bankers present were not prepared for the surprising but provocative answer from a colleague.

"What do I think regional interstate banking means to you? Not one damn thing," deadpanned H. Furlong Baldwin, chairman and chief executive officer of Baltimore's Mercantile Bankshares Corp. "Whether you sell fried chicken, used cars or insurance, it doesn't mean a damn thing. It means a lot to the banking industry."

Like Edward E. Furash, a banking consultant and the panel's moderator, some of Baldwin's colleagues in the room must have wondered if they had just witnessed the second firing on Fort Sumter. But Baldwin's little outburst of heresy had a refreshingly candid ring to it. No pitches. No assurances. No promises of more loanable funds. Just plain talk, like it or not.

"I'm not belittling it," Baldwin said of regional interstate banking. "It's proper" and "it's right" -- but not for those in the audience. What most of those executives need and most want, according to Baldwin, is a loan officer who knows them and knows their business.

Will interstate banking spark economic development in the region? Not according to Baldwin, whose definition of economic development is decidedly narrower than that of development specialists: "We don't need a new Marriott hotel or a new Toyota plant . What local companies need are services from local banks."

Judging from some complaints to the panel, many of those services -- including loans for expansion -- aren't always readily available.

Not to worry. Big regional banks formed by interstate mergers will provide convenience, services and competitive rates for all businesses, promised William C. Harris, president of United Virginia Bank's greater Washington region.

Assimilation of merged regional banks will take time, but Thomas J. Owen, chairman of Perpetual Bank F.S.B., counseled seminar participants to "be patient" because "you'll benefit."

Although Luther H. Hodges Jr., chairman of Washington Bancorp, supports the rhetoric of the promises of bigger and better things to come from regional interstate banking, he acknowledged that it will take at least two years before the benefits of competition will be apparent. Hodges agrees with Baldwin, nonetheless, that regional interstate banking won't mean very much to individual businesses, which, he said, will be served well by existing banks. On the other hand, the region as a whole will benefit, Hodges believes.

If small businesses in the region still aren't sure what to expect, perhaps they can find some assurances in a scenario Baldwin subsequently outlined in a conversation. "There probably are going to be 10 truly national financial services institutions, probably 25 super-regionals and 15 or 20 brand-new institutions that do some little slice of business at narrrow volume and great margins. In that last category you're going to have what I call niche banks," he said.

Mercantile, which is "not for sale," obviously sees itself as a niche bank and, therefore, wants no part of regional interstate banking.

For what it's worth, Furash envisions a consolidation that will preserve markets for large and small banks, including Baldwin's version of a niche bank. "We are going to have a system that, for a long time, will look very much like the California system," Furash predicted. "In the California structure, which is larger than any banking region in the East, you have six or seven banks that dominate. You also have very profitable community banks and hundreds of smaller banks -- 'boutique banks.' "

Developments in New England also offer a possible clue to what small businesses can expect as interstate mergers take hold in this region. There, in the birthplace of regional interstate merger pacts, new banks are being formed to serve special needs of commercial and retail customers, according to Furash.

Baldwin may be right, after all.