BANKING expert James Burnham had hoped that the multibillion-dollar cleanup of the thrift industry mess might be "a sufficiently strong club" to get "genuine banking reform" through Congress."I have been disappointed," says the "Professor of Global Competitiveness" at Duquesne University's School of Business. He wants to limit deposit insurance to extra-safe banks. A lot of others are unhappy with the measure that moved to the floor of the House for debate Wednesday. The White House has threatened to veto it. Many commercial bankers, particularly those in major banks, figure the compromise bill, worked out by House Banking Committee Chairman Henry Gonzalez (D) of Texas and Energy and Commerce Committee Chairman John Dingell (D) of Michigan, would roll back, rather than expand, the current powers that some banks have to sell insurance and provide investment banking services. Another banking professor, Paul Nadler of Rutgers Graduate School of Management, says the efforts to restrain banking arise partially from the concept of bankers as "fat cats" with too much power. That, in his view, is outdated. Today domestic banks have lost an enormous amount of their financing business to commercial paper markets, investment bankers, mutual funds, insurance companies, and foreign banks. This, Mr. Nadler says, has put banks in a vulnerable position. "But we have found you need banks. You have got to give them a chance to survive." So he would like to see their powers expanded. So would Steven Felgran, a professor of finance at Northeastern University in Boston. "Let them do what they want - and then regulate them," he urges. That regulation should be strong enough to discourage conflicts of interest and fraud that may arise from banks being in such different areas as business and consumer loans, stock and bond underwriting, insurance, and so on. The key thing, he says, is that banks take deposits and funnel that money into the private sector. The measure before the House was diluted from the original "HR-6" passed by the Banking Committee June 28. The revised HR-6 repeals the Glass-Steagall bill of the Great Depression that separated commercial banking from investment banking, but it requires a commercial bank to have a fully capitalized affiliate to carry out investment banking. (This "fire wall" provision is higher than that imposed today by the Federal Reserve System in allowing select banks into investment banking activities.) But banks, through these subsidiaries, would not need Fed permission to get into such activities as selling mutual funds. The bill sharply limits bank insurance activities. Thousands of insurance agents around the nation didn't want bank competition, and let Congress know it. However, the bill does allow banks to branch nationwide. Even without new legislation, banks have been getting around federal geographic restrictions imposed by the McFadden Act of 1933 and Douglas Amendment. According to a study by George Salem of Prudential Securities, 34 states by October had passed legislation allowing unlimited nationwide banking or out-of-state banks to enter on a reciprocal basis. Another 15 have regional reciprocal regulations. And only three states, Hawaii, Kansas, and Montana, have no interstate banking laws on the books. Such state legislation has allowed dozens of interstate acquisitions of banking companies in the last five to six years. Under HR-6, banks could move across state lines through branching rather than buying or setting up legally separate banks or bank holding companies in other states. The fate of HR-6 in the House does not end the banking debate. The Senate must pass a bill and differences with the House bill must be settled in a conference committee. Further, what emerges, may face a presidential veto. Meanwhile, estimates of the cost of the thrift mess keep going up. William Seidman, who left his job as chairman of the Federal Deposit Insurance Corporation last week, reckons $225 billion to $250 billion, or $700 billion including interest on extra federal debt over about 40 years. Further, Mr. Seidman told Congress that more than $70 billion in Treasury loans may be needed by the FDIC to cover bank failures in the next couple of years.