When Margaret Guerin-Calvert spoke at a Federal Reserve Bank of Chicago conference last month, one theme was clear: The U.S. Justice Department is scrutinizing prospective bank mergers for their effect on small-business customers more than for any other quality.

Ms. Guerin-Calvert, who is assistant chief in the economic regulation section of the Justice Department's antitrust division, articulated what many consultants have been theorizing in recent months: The Bush administration is embracing small business as never before.

"There may be relatively few suppliers other than local commercial banks" for small businesses seeking loans or credit, Ms. Guerin-Calvert said. "In almost all circumstances the department will be considering the effect of the merger on small business."

Until her speech, according to several officials, the lack of low-income mortgage lending was seen as the most sensitive regulatory barrier to merger.

Narrow Range of Choices

But John T. Weisel, senior vice president at BEI Golembe, a Washington-based thrift and bank consulting firm, said the tilt toward small business and away from consumers has been emerging over the past year.

"We have seen a change from concerns on the consumer deposit side to concerns over the availability of credit for small business," he added.

Ms. Guerrin-Calvert said that banks offer a relatively narrow range of small-business products to customers that are highly dependent on them.

Depriving middle America of such sources of credit is dangerous and foolhardy, she implied, since small-business lending "continues to be a core of business for banks."

Bankers have argued that small-business lending should be less subject to antitrust scrutiny because each loan is unique, giving megamerged banks no inherent advantage over small banks and thrifts. But the Justice Department isn't buying the argument.

"We are finding in some of our cases that [the small business loan] is more standardized than we would have thought," Ms. Guerin-Calvert said. "It is feasible for banks to coordinate either implicitly or explicitly on pricing," she added.

Thrifts Seen as Withdrawing

She also said that the sources of credit for small businesses have been diminishing rapidly in some markets. "We found in the last year ... that thrifts ... are now starting to exit commercial lending," she said.

The rather active lending of thrifts to small businesses in Detroit smoothed the way for the merger of Comerica and Manufacturers National, she noted.

But the inactivity of thrifts in small-business lending was a major factor in the department's challenge of the First Hawaii combination with First Interstate in 1990.

Banks that face antitrust challenges over small business would be well advised to ignore some of Ms. Guerin-Calvert's advice, some lawyers suggested.

"The competitive alternatives are extremely broad" for small businesses, said H. Rodgin Cohen, a lawyer at Sullivan & Cromwell in New York.

Small business customers often get credit from their suppliers in the form of extended payments, or lease rather than buy equipment, he said. They also can turn to the Small Business Administration for government-backed, short-term funds.

Early Defenses Urged

"If the banks were the only and cheapest alternative, there would be no need for an Eaton Credit or an IBM credit," which lend billions on a secured basis to small-business customers, Mr. Cohen said.

He warned bankers to make their defenses about alternative lending routes early, because mergers that are challenged by the federal government rarely leave the starting gate.

But federal challenges are not the only ones being made to bank mergers today. State and local communities also are focusing on small business combinations.

The Ohio attorney general is investigating the proposed acquisition of Star Banc Corp. by Fifth Third Bancorp. The city council in their hometown, Cincinnati, called last month for a review of the affects on businesses and individuals in the city.

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