By Robert M. Garsson

The Clinton administration's long-awaited plan for regulatory relief will be unveiled soon and could receive final agency approvals in a matter of months, Federal Reserve Vice Chairman David Mullins said Thursday.

Though he was unwilling to provide new details, Mr. Mullins confirmed reports that the rules would permit banks to make loans based on a judgment about a borrower's character.

"Why shouldn't a well-capitalized, well-run bank be able to make whatever loan they feel comfortable with?" Mr. Mullins said at a hearing of the Senate Small Business Committee. Evaluation as a Group

For loans below some specified level, he said, banks would be free to extend credit without meeting regulatory ratios or guidelines. The loans would be evaluated by examiners but as part of a larger portfolio.

"We will say to the banks, 'We trust you,' " he added.

Although the Federal Reserve is an independent agency, it is participating with the Treasury Department and other bank supervisors in a review of regulations that inhibit lending to small businesses.

Mr. Mullins said the agencies were looking only at regulations that could be changed through administrative action, not through legislation.

But he said the Federal Financial Institutions Examination Council, an interagency group, was looking at areas that required legislation and would release a list in May. Speedy Action Urged

Although the chairmen of the House and Senate banking committees have not demonstrated any enthusiasm for the banking industry's regulatory relief agenda, the Small Business Committee members urged Mr. Mullins to move as quickly as possible.

"It will take you a long time to implement this, and there is a real sense of urgency up here," said Sen. Joseph Lieberman, D-Conn. Legislation could move quickly "because of the mood up here," he said.

Mr. Mullins said recent banking laws and regulations had had the effect of making the lending process increasingly standardized, "more dependent on documentation, analytical formulas, and rigid rules as opposed to examiner judgments."

Small-business lending, which tends to be highly individualistic, has suffered the most as a result, he said, though all types of commercial and industrial lending had been affected. Ease of Documentation

Banks are increasingly inclined to put money into assets such as mortgages and consumer loans, which can be documented easily, he added.

William H. Brandon Jr., chairman of First National Bank of Phillips County, Helena, Ark., told the panel that some good loans weren't being made in this regulatory environment.

His bank, he said, had to turn down a loan application from a man who had been a customer for 15 years and who had always paid his loans on time. He was trying to start up a new business and needed to buy a truck.

"This was a character loan - we knew him and knew he would pay us back," said Mr. Brandon, who is also president of the American Bankers Association. "But in today's world, the examiners want to see something besides the truck and the man's character behind the loan."

Another banker said the swelling regulatory load is making him rethink his career choice.

"I've been in banking for 32 years," said James Lauffer, chairman of First National Bank of Herminie, Irwin, Pa., representing the Independent Bankers Association. "But each time we get a new regulation, I feel like saying, 'forget it.' " Also on Thursday, Sen. John Kerry, D-Mass., introduced legislation to create an agency that would promote a secondary market for small business loans.

The new agency, the Venture Enhancement and Loan Development Administration for Smaller Capitalized Enterprises, or Velda Sue, and package and securitize small business loans. It is patterned after such secondary market agencies as the Federal National Morgage Corp.