Thousands of Rhode Island residents learned yesterday what Hispanic immigrants in Washington and officials of charitable organizations in Harlem have also discovered recently: The federal safety net that protects most depositors does not cover everyone.

The Rhode Islanders found they could not get money from their accounts in 45 credit unions and banks because, essentially, their deposits were insured by a private insurance fund rather than the federal government.

The private insurance company collapsed on Monday, forcing state officials to declare a bank holiday and order the privately insured institutions to keep their doors closed until they can obtain federal deposit insurance.

Rhode Island's private deposit insurance plan is not the first state system to fail in recent years. The 1985 collapse of the Maryland and Ohio private deposit insurance systems for savings and loan associations prompted several other states to do away with their private insurance funds.

But Rhode Island and Pennsylvania still permit some banks and thrifts to operate with private insurance and 20 states -- including Maryland -- still have privately insured credit unions.

Altogether, more than 1,400 credit unions with over $20 billion in assets -- about 10 percent of the industry -- participate in 10 private insurance plans.

The federal deposit insurance system created during the Great Depression now protects more than 99 percent of all accounts in banks, thrifts and credit unions -- including foreign deposits and accounts of more than $100,000 that were not originally covered.

But sometimes a program meant generally to protect depositors and savers and ensure confidence in the nation's financial system does not protect many of the most vulnerable, the recent failures show.

When Freedom National Bank in Harlem failed late last year, the Federal Deposit Insurance Corp. did not protect a number of charitable institutions that had deposited more than $100,000 in accounts in the minority-owned bank. The FDIC covered all deposits in 148 of the 168 banks that failed across the country last year, but depositors lost money at Freedom National and 19 other banks that went under.

Also outside the safety net were depositors at Latin Investment Corp. and Casa Latinoamericana de Inversiones, two failed District firms that were offering banking services without either bank charters or deposit insurance, and Community Credit Union Services, another unlicensed financial institution in the District.

The same kind of unchartered, uninsured financial institutions are operating in immigrant communities throughout the nation, according to banking regulators who fear that depositors do not understand that their money is not protected by the U.S. government.

Congress and the White House are now working on plans to reform the deposit insurance system, but those proposals do little to close the gaps that have allowed these small savers to fall through the net.

Legislation that would have required all institutions that take deposits to have federal insurance was suggested by the Bush administration as part of its 1989 S&L reform bill, but it was killed before the first draft of the measure got to Congress.

The administration reportedly has not decided whether to resurrect the idea in the deposit insurance recommendations that will be released later this month, but Sen. Donald W. Riegle Jr. (D-Mich.) has proposed that all institutions that do not have federal insurance be required to disclose that to their customers.

The Credit Union National Association (CUNA), the trade group that represents U.S. credit unions, has strongly defended private insurance and has blocked legislation requiring all credit unions to be insured by the federal National Credit Union Administration, the federal agency that regulates and insures credit unions.

A spokesman for CUNA said private insurance "provides a choice within the credit union system."

Rhode Island is unique because its state insurance fund covered 35 credit unions and 10 specialized banks. The failure of one of the banks depleted the fund, and credit union officials said the fund would have been sound if it protected only credit union depositors.

Thirteen Maryland credit unions, which have $60 million in assets, are still covered by the Credit Union Insurance Corp., which was established by the Maryland General Assembly to insure state-chartered institutions.

After Maryland depositors suffered in the failure of a similar fund that insured state-chartered S&Ls, the state legislature required all S&Ls to qualify for federal insurance. Despite the S&L collapse and the recommendations of two state agencies, the legislature three times has rejected measures to require all Maryland credit unions to become federally insured.

"We're walking on thin ice," said Sen. Leo Green (D-Prince George's County), who chaired the subcommittee of the Senate Finance Committee that recommended the fund be abolished. "This is something we should have done years ago right after the savings and loan failures. There's no telling what our liability might be."

Officials of the Maryland credit union fund said it is strong, with $4.72 in reserves for every $100 on deposit, almost 10 times the reserve ratio of the FDIC. No state-chartered credit union has ever failed, the officials said, and the 13 credit unions covered by the fund are healthy.