D.C. Council member Charlene Drew Jarvis (D-Ward 4) introduced legislation yesterday that would permit out-of-state savings and loan firms to merge with or acquire District thrifts, a proposal similar to city law enacted in 1985 aimed at the banking industry.

Jarvis said she hopes the thrift proposal, if approved, would help spur economic development and particularly housing construction in depressed areas of the city. Like the banking law, the thrift bill would require savings institutions to submit to the city a proposal for financing housing and minority business enterprises before merging.

The bill will be reviewed by the council's Housing and Economic Development Committee headed by Jarvis.

Thomas J. Owen, chairman of Perpetual Savings Bank, applauded introduction of the bill, saying it would bring the District in line with laws governing thrift mergers in Virginia and Maryland. But Owen said he foresees no immediate merger activity if the bill becomes law.

"What we've always been anxious to have is as much reciprocity in the region as we can," Owen said. "I don't see anything immediate. But if you don't pass it, you won't ever see anything happen."

Under current law, D.C. thrifts in the federal savings system can participate in interstate mergers only under conditions of financial distress.

Since the city's banking law was enacted, Jarvis said the council has approved five mergers and an application for a sixth is pending. Approval followed a council review of plans submitted by the institutions for investing in such economically struggling areas as Anacostia in Southeast and the H Street corridor in Northeast.

One bank, American Security, acquired last year by Maryland National Bank, has pledged to finance $100 million in such development, Jarvis said. The council is scheduled to hold hearings this year to determine whether the banks have lived up to their pledges.