MNC Financial Inc., the parent of American Security and Maryland National banks, averted a financial crisis yesterday after federal regulators, in an unusual move, allowed the subsidiary banks to rescue the cash-strapped parent company.

Faced with the possibility that the largest bank company in the Washington area would default on long-term notes and be forced into bankruptcy, the regulators gave their consent for American Security and Maryland National to lend MNC $271 million to repay its debt.

It is rare for regulators to allow a federally insured bank to support its parent, and MNC had been seeking loans from independent banks. However, sources said concerns about the financial health of MNC and its banks kept other institutions from lending any money.

The Baltimore-based bank company has been scrambling to sell assets to meet several crucial deadlines for repaying debt, and up until yesterday it had raised enough money to meet its obligations. But after paying back money owed to a group of bank creditors Monday, MNC found itself without enough cash to pay holders of $271 million of long-term notes.

The bank company had been counting on the sale of its biggest asset, its prized credit card subsidiary, to provide it with enough cash to meet all its obligations. However, efforts to sell MBNA Corp. quickly to a private bidder failed, and MNC said yesterday that it would instead immediately begin selling MBNA stock to the public.

The more than $900 million expected from the stock sale, which is to be completed by Feb. 4, would be used to pay off the loan from American Security and Maryland National. The money also should satisfy all debt coming due in February and March, giving MNC the breathing room it needs to survive the real estate downturn in the months ahead, analysts said.

News of the rescue boosted MNC's share price on the New York Stock Exchange by 87 1/2 cents to $2.75, its highest close in longer than a week.

Before MNC was allowed to borrow money from its banks, regulators forced it to shore up the banks' capital, the financial cash cushion that protects the federal deposit insurance fund from losses. American Security and Maryland National already are operating below the federally mandated capital levels and are under orders from regulators to increase their capital.

Under the agreement with the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and the Federal Reserve Board, the three agencies charged with overseeing the nation's banking system, MNC provided the banks with $450 million in loans that belonged to MNC Credit Corp., one of the parent's non-bank subsidiaries. Accounting rules permit those loans to be counted as capital, the regulators said.

But even with the additional loans, sources said the regulators were forced to waive a rule that prohibits banks from lending cash in excess of 10 percent of their capital. That rule is meant to limit a bank's liability in the event that a loan is not repaid.

Lenora Cross, spokeswoman for the comptroller's office, said the agency is confident that MNC will pay off the loan. "This is nothing more than a timing problem," Cross said. "We believe that everything will work out fine -- we are sure of that."

As collateral for the loan, MNC pledged the stock of its credit card subsidiary and all proceeds from the sale of shares to the public. MNC said 45 million shares of the unit will be offered for no less than $21 per share, or $945 million, a minimum that was set as part of the loan agreement. MNC spokesman Daniel J. Finney said the company needs at least that much money to repay all debt and add capital to its two banking subsidiaries.

Alfred Lerner, MNC chairman and chief executive, said he will purchase 4.5 million shares, or 10 percent, of the stock offering, and his insurance firm, the Progressive Corp., will buy 2.2 million shares, or 4.9 percent. The insurance company has applied for regulatory approval to buy an additional 10 percent; the price paid by Lerner and Progressive would be the same price paid by other investors.

MNC has asked the Fed for permission for Lerner to serve as chairman of both MNC and the credit card unit until MNC is in "sound" financial condition, but not longer than two years..