A community activist said Monday that Bankers Trust Corp. has agreed to suspend dealings with Delta Funding Corp.-a claim the beleaguered subprime lender denied.

Sarah Ludwig, executive director for the Neighborhood Economic Development Advocacy Project, said the bank has "frozen all dealings with Delta pending investigation" and will not securitize the company's next mortgage transaction.

"We do not understand that to be the case," a Delta spokesman said. The company will not pick a trustee for its next securitization until June, the spokesman said.

Bankers Trust declined to comment.

Ms. Ludwig said her group recently met with the chief executive officers from Bankers Trust and Deutsche Bank. Deutsche Bank agreed in November to buy Bankers Trust.

Delta drew criticism this year after media reports accused it of predatory lending.

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