Inside the National Bank of Washington's branch at the busy corner of 8th and H Street NE, a bank officer leaned back in his chair and explained the grim facts of economic life that govern his relationships with the business people on the street.

"Perhaps we may tend to look a little differently (at this area) because of the uncertainty if the economic conditions here," said the officer, who said he had grown up in the H Street area during the 1930s and 40s but who asked not to identified. "The loans are made to be repaid, you know."

He paused, adjusting his tie.

"No so-and-so" - he named a nearby business - "how long do you think that business is going to last? One businessman told me he has been broke into so many times he doesn't know whether he's coming or going. He may have been a customer here for 20 years, but I've seen his business go from here" - he held one hand high -" to here" - he held the other hand low -" and, well how can I loan to him?"

He shook his head.

Another problem, he said, has to do with stringent new requirements to protect privacy of individuals and to insure fair reporting and notification in credit matters. These requirements he said, have enormously increased the paperwork the bank must do to grant a loan and has given rise to problems like employers refusing to give information on employees who applying to the bank for a loan.

"How many letters can you write before you can't make a $500 loan because of the cost?" asked the officer."I feel sorry for people who came in here who don't understand. I've had people who've come in here for years, and in the past I could accommodate them on short notice. Now I can't do it."

This bank officer also said he is skeptical of persons who come to him seeking loans to refurbish their business or houses in the H Street area and who try to tell him that the area is part of the Capitol Hill expansion. He thinks that the area is too far from the Hill to be described this way, and that such a description is basically a psychological trick designed by speculators and real estate people to build up the area.

"They want to keep the capitol Hill idea in front so people will feel more at ease," he said. "But how far do you go with it? Do you do it all over the city?"

Currently, according to business people and others in the area. H Street itself forms a psychological barrier of sorts. They say it is much easier to get a loan on property lying south of the street - on the Capitol side - than on property lying to the north.

While many think that barrier will be broken, the bank officer doesn't agree. He thinks it is just as likely that the bottom may fall out of the Capitol Hill expansion before it truly rejuvenates the H Street corridor or passes farther to the north.

"I talk to the business people here," he said. "In some cases they feel they lose much going out the front door (in thefts) as they ring up on the cash register. I grew up on H Street when the street was (filled with large, profitable businesses) . . ."

Again he shook his head.

"We want to be known in the area as a very civic and very community-oriented bank, but our hands get tied.