In defense of Neil Bush, may I point out that the outside directors of most savings and loans "did not know a thing about the thrift industry" at the time of their selections for the board {"Naivete' and the Family Name," front page, July 29}.

A typical board might be made up of a physician, a stock broker, someone in publishing or with a nonprofit group, a politician and a military man. Usually there is a lawyer or two. Only the "inside" directors, employed by the thrift, would have significant knowledge of the thrift industry or commercial banking. Inside directors typically would be the thrift president, perhaps a vice president and the chairman if this was not an honorary position.

I was closely associated with a metro-area thrift from its beginning to its demise, a period of about nine years. Thrifts started out as the "Moms and Pops" of banking -- just a few neighbors figuring out a way to lend other neighbors money to buy or build a house. They never lost that flavor. Traditionally boards were supposed to represent the community, and directors were just folks around town, not Harvard MBAs. Regulators encouraged boards with a community flavor, and in latter years a token woman or two and a minority member were requisites.

To hang poor Neil Bush because he knew nothing about the thrift industry is more misinformed than unjust. There is a small army of outside directors of S&Ls who knew nothing or almost nothing about the S&L industry at the time of their selection to the board. As time went on, and if they were intelligent and did their homework, they learned. It was and remains on-the-job training at its worst. It was a very naive industry, and "outside" directors were sitting ducks if the top employed official was an imaginative high flier possessed of embryonic ethics.

MARTHA SHEA McDOWELL Vienna