ATLANTA -- Decatur Federal Savings and Loan Association has agreed to pay $1 million to settle mortgage discrimination charges brought by the Department of Justice.

As part of the settlement announced Thursday, the Atlanta-based thrift deposited $1 million into a fund "to be disbursed as relief to allegedly aggrieved persons" identified by the federal investigators.

Decatur, with $2.7 billion in assets, continued to maintain its innocence, despite the settlement. In a published statement, the company said it "voluntarily chose to settle the case in order to avoid protracted and costly litigation."

No Effect Seen on Merger

Decatur Federal also said the settlement would not affect its proposed merger with Charlotte-based First Union Corp. or the price its shareholders had expected to receive from that transaction. First Union agreed in April to buy Decatur Federal for $143 million in stock.

In addition to paying the $1 million, Decatur Federal agreed to:

* Continue to expands its affirmative marketing efforts in minority communities.

* Enhance efforts to assure that all mortgage applications are processed under the same standards and underwriting criteria.

* Establish and expand training programs for employees in nondiscriminatory lending.

Decatur Federal is the major subsidiary of DFSoutheastern Inc., whose common stock is traded on the Nasdaq market. DFSoutheastern was up 75 cents Thursday, to $29.50 a share, on news of the settlement.

The settlement, which grew out of a three-year federal probe into mortgage lending in Atlanta, is the first in which the Justice Department has levied a monetary penalty against an institution for discriminatory lending.

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