An arbitrator has reached a settlement in a dispute between the thrift company Bank Plus Corp. and MMG Direct Inc., an on-line advertising and marketing agency that the bank had engaged to market its credit cards.

The arbitrator validated Bank Plus' termination of its marketing agreements with MMG in the fall of 1998, when the thrift company, which is also the holding company of Fidelity Federal Bank FSB, declined to issue 300,000 credit cards that MMG had requested for customers.

But the arbitrator required that Fidelity pay $700,000 in fees it withheld from MMG during the course of the dispute, as well as $1 million to cover legal expenses.

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