WASHINGTON -- The banking industry reacted with anger and resignation to Monday's announcement by the Justice Department that it had reached a fair-lending settlement with Chevy Chase Federal Savings' Bank.

The government charged the suburban Maryland bank with violating fair-lending laws by not operating enough branches in minority metropolitan Washington, areas. This is the first time Justice has brought a fair-lending suit that was not based on whether an institution unfairly rejected minority loan applicants. "Justice is still seeking people to hang and to make an example of to spread fear throughout the banking industry," said one particularly irate banking-industry observer who requested anonymity.

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