WASHINGTON - An odd hush has fallen over the banking industry since the Justice Department announced earlier this month that it had resolved a lending discrimination complaint against Northern Trust Co.

Banking industry observers said changes in the political climate and in the department's handling of the case made the deal far more palatable than last summer's Chevy Chase Federal Savings and Loan settlement, which brought loud cries of credit allocation.

"It is reflective of political realities," New York attorney Warren Traiger said. "The regulators, including Justice, hear what is going on in Congress and the threats to role back (the Community Reinvestment Act) and by implication the fair-lending laws."

That increases the pressure on Justice to handle cases reasonably, he said.

Others point out the extreme differences between Justice's two most recent forays. Chevy Chase involved establishing a new branch and three new loan offices, the first time the government ever required such an investment to settle a lending discrimination complaint.

Northern Trust, following the mold of pre-Chevy Chase settlements, agreed on June 1 only to commit $700,000 to compensate blacks and Hispanics who should have received loans.

"Until the election, the grave concern was there would be case after case after case coming down the pike setting new markers," said Kenneth Guenther, executive vice president of the Independent Bankers Association of America. "That just hasn't happened."

Justice also didn't base its case on controversial statistical models, the backbone of previous complaints. Instead, it relied on individual loan file reviews, a concept bankers appear much more comfortable with.

Also, Chevy Chase looks like thousands of other suburban banks, said William Sweet, a partner at Skadden, Arps, Slate, Meagher & Flom who represented the Maryland thrift. Northern Trust, however, is a specialized institution that few bankers can relate to, he said.

The Justice Department relies on a much simpler explanation for the lack of outcry - bankers have gotten on board and begun fighting lending discrimination.

"The Northern Trust case reflects the kind of discrimination that might have been prevalent a few years ago but which the industry is now trying to address," said Paul Hancock, who runs the housing section in Justice's civil rights division.

But that doesn't mean this settlement doesn't explore new ground. Howard B. Adler, a partner at Gibson, Dunn & Crutcher, said the Justice Department established that banks can't provide special assistance to whites that they don't offer to minorities.

"You have to make an equal effort," he said.

The Northern Trust case also serves as a warning to the industry that Justice is still in the game. "Lenders and banks would be foolish to think that fair-lending enforcement is a thing of the past," said Paul H. Schieber, a partner at Blank, Rome, Comisky & McCauley.

The precedent, however, hasn't struck anyone as especially novel, because most bankers have accepted for many years that they must treat all borrowers equally.

Justice also became politically more savvy. Rather than catching bankers by surprise - as it did with Chevy Chase - the department consulted with industry leaders beforehand.

"Justice did call around and explain to bankers what this was all about," Mr. Guenther said. "They said it was an old case and said the institution has had an exemplary relationship in 1994 and 1995."

Others noted that the $700,000 settlement amount was far below the $11 million Chevy Chase paid or the $1 million tiny First National Bank of Vicksburg, Miss., anted up in January 1994.

"What it tells me is that their concern and interest is staking out certain enforcement principles that they think need to be articulated," said Thomas Vartanian, a partner at Fried, Frank, Harris, Shriver & Jacobson. "In that sense, the dollar value of these settlements may be irrelevant."

But Mr. Adler said the next bank tagged for giving whites more help than minorities will likely pay much more. "Now people are on notice," he said.

Justice's Mr. Hancock said that though the $700,000 figure might not seem large, some of the individual awards to victims will be twice the size of those given in past deals.

The settlement also fits Justice's pattern of targeting different regions. The department already has covered the East Coast and Midwest, leaving the West Coast as the next likely focus.

"It's like the time zones," Mr. Vartanian said. "They are moving west."

Mr. Hancock said Justice does try to spread out its enforcements geographically. But, he said bankers should not relax just because the department already targeted a bank in their community.

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