Barnett Banks of Jacksonville, Fla., is battling efforts by the Department of Justice to sign on to a fair lending agreement that would impose onerous government intrusion onto the institutions business activities.

The issue is important to banks and their mortgage lending affiliates for many reasons, one of which is that the conflict boils down to different interpretations of the same information by specialists hired by both sides. In fact, the conflict could be called the Battle of the Numbers Crunchers.

In another component of the fight that is illustrative of what mortgage lending institutions could face, DOJ is pressuring Barnett to settle by leaking stories disclosing that a com-plaint may be made public within 30 days. Since Barnett is one of the strong-est consumer banking franchises in the country, such publicityeven if unver-ified and hotly disputed by Barnettcould damage its franchise and put pressure on the institution to settle.

Unlike Chevy Chase Federal Savings Bank, which was forced to sign on to an agreement that has the DOJ examining its advertising and branching policies, among other issues for five years, Barnett has friends backing it up.

The Federal Reserve Board, for example, recently approved two applications filed by Barnett to expand its business, one to acquire LoanAmerica, a mortgage business based in Florida, and the second approving the acquisition of Florida branches of a California thrift. And banking trade groups are also supporting Barnett.

The American Bankers Association, for instance, is putting together a war chest to help Barnett in case the Florida-based bank holding company is forced to litigate the DOJ allegations. And the Bankers Roundtable, which basically represents bank holding companies, is also lending support.

Regardless of what happens in the Barnett case, warns one of its lawyers, the industry can look forward to DOJs aggressive pursuit of lending discrimination probes against banking institutions.

Barnett is gratified, said Andrew Sandler of Skadden, Arps, Meagher & Flom in Washington, that the Fed is supporting Barnetts contention that it is not engaging in lending discrimination. To back its view, Barnett has retained Dr. Harold Black, a professor of finance at Tennessee State University at Knoxville and an expert on the use of computer models to determine lending bias at banking institutions.

The industry believes that Barnett is only the first of about 10 superregional institutions caught in the DOJ bias investigation. Others include, according to several sources, Northern Trust Co. of Chicago and BankAmerica, based in San Francisco.

Barnett has retained Bob Bennett of Skadden, Arps as its lead counsel. Bennett also represents President Clinton in his defense against a sexual harassment suit filed by a former Arkansas state employee, and was dismissed as his lawyer by Rep. Dan Rostenkowski, D-Ill., after Rosty was indicted on campaign finance misuse charges.

DOJ plans to file a detailed complaint outlining alleged violation of fair lending laws by Barnett banks within 30 days.

Barnett has been under investigation for a year, according to several Washington banking lawyers familiar with the issue. All 31 of Barnetts constituent banks were originally under investigation, according to these lawyers. That was first reduced to six and has now been reduced to two.

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