The Federal Reserve Board appears to be signaling through approval of an application Sept. 21 that it won't hold up business moves by banking institutions as a means of pressuring them into signing agreements with the Justice Department that call for substantial increases in services and lending in minority areas.

That intent became clear when the Fed approved the application of Barnett Bank to acquire Loan America Financial Corp., a Miami Lakes, Fla., servicer of residential mortgage loans.

Barnett is one of several superregional banking institutions that has received letters from the Justice Department asking for detailed information on their lending activities. Banking industry officials in Washington believe that DOJ wants to use the probes to force institutions to agree to comprehensive settlements that would, on a de facto basis, back the DOJ's expansive view of its authority under fair lending laws.

Bankers fear that they will be forced as trade groups and as institutions to sign agreements based on the Chevy Chase Federal Savings Bank of Maryland settlement. Chevy Chase agreed Aug. n to open branches in minority areas of Washington, subsidize loans and advertise heavily in minority communities in a deal that has bankers deeply concerned.

Barnett is one of 10 large banks believed to be under investigation by DOJ. But the Fed declined to buy on to the DOJ plan, which is aimed at building momentum through regulatory leverage over banks for expansive business involvement in minority lending. The Fed noted the DOJ probe in its approval of the application, but said that it did not receive substantive negative information. On the basis of information provided by Barnett and its own data, the Fed said it "concludes that this proposal satisfies the criteria specified by statute to be applied by the board in reviewing proposed acquisitions of this type and that the record does not provide a basis to deny this application under the statutory factors.

"The board notes that this proposal represents the acquisition of a non-banking company and that board action on this proposal will not hinder the DOJ in its inquiry. The board will monitor the DOJ inquiry and retain broad authority to take appropriate supervisory action, including action on future applications, if warranted."

With the Fed an unwilling participant pant in its goals, the DOJ is now looking to an application by Barnett to acquire Florida branches of Glendale Federal Savings Bank of California. That application must be approved by the Office of the Comptroller of the Currency.

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