There is much to offend the olfactory sense in the debacle that led tragically to the demise of Washington's oldest bank, the National Bank of Washington {"NBW Loss Burns Big Names" and "Lawsuits Claim NBW Misused Depositors' Money," Aug. 23}. Despite the reams of newspaper coverage in past months and years, as many questions remain as were answered.

For example, why were federal examiners apparently lax in requiring higher standards in an increasingly flawed lending policy? Why in the week prior to the takeover by the Federal Deposit Insurance Corp. on Aug. 10 did the newly appointed conservator William Ogden tell "senior management the Federal Reserve had guaranteed an unlimited source of funds for NBW . . . and assure employees that their jobs were secure, that the bank was safe" {Aug. 14}?

Why on Aug. 10 did the FDIC notify the Office of the Comptroller of the Currency that Riggs was the chosen purchaser and request the Fed to demand repayment of borrowed funds, knowing it was an impossibility and leading to insolvency? Why on Aug. 13, did an OCC spokeswoman say that "the bank still had equity capital, or a cash cushion, when regulators took control"? Did the FDIC act too hastily? And how was it on supposedly two days' notice that Riggs personnel were so adequately prepared for the takeover and began terminating selected NBW personnel on the following Monday morning?

Additionally, it was reported that holders of the holding company's short-term debt were calling themselves the only true victims of the collapse. But there were other true victims -- the staff members of NBW, many of whom had spent their entire adult lives working for the organization. On a moment's notice, all lost most for which they had worked -- their careers, medical benefits, insurance, annual leave and sick leave.

One wonders if FDIC personnel who boasted of having closed 600 institutions and having it "down to a science" have demonstrated the same insensitivity within those 600 as has been seen by a faultless NBW staff, whose treatment has been described, variously, as cool, callous, rude and ugly.

Further, FDIC has not deemed it necessary or appropriate to officially notify NBW's retirees of their loss of medical benefits and life insurance. Such inaction can only be described as unconscionable. Has the FDIC, a tax-supported agency, chosen to ignore the fact that NBW's employees and retirees are a part of the tax-paying public?

In the event anyone has wondered, the whirring sound heard is that of the long line of NBW presidents, now dead, spinning in their graves.

MARION L. POLLI Derwood

The writer is a retired vice president of the National Bank of Washington.