When the Federal Reserve holds a hearing in Boston Saturday into the merger of Fleet Financial Group and Shawmut National Corp., the head of a senior citizens group plans to explode a bombshell.

Terry Drent, executive director of the Michigan-based Council on Aging, is expected to tell the Fed's board of governors that Fleet's consumer finance unit misled customers.

"We don't think the Fed should sanctify the merger before Fleet cleans up what they've done," Mr. Drent said.

Fleet denies Mr. Drent's charges, and sources close to the bank said he has been threatening a lawsuit for three years but has yet to file one.

Whether or not the claims are substantiated, they come at an awkward time for a company that is trying to satisfy regulators' and community groups' concerns about the effects of the proposed megamerger.

At the first in a series of unusual public hearings on the merger, Mr. Drent said, he plans to testify that Fleet Finance manipulated mortgages so that borrowers had a hard time keeping up payments and often defaulted.

That assertion is the focal point of a 51-page complaint that Mr. Drent said he expects to file today in U.S. District Court for the Eastern District of Michigan.

The wrongdoing is said to have occurred on higher-risk nonconforming loans made to elderly and generally unsophisticated borrowers in the late 1980s and early 1990s, Mr. Drent said. The suit, if filed, would seek class-action status.

Mr. Drent, in the planned filing and in interviews, maintained that the actions were profitable to Fleet but cost families their homes and credit ratings. Fleet maximized its profits by getting other mortgage companies to channel business its way, Mr. Drent said.

Executives at Fleet Financial Group denied the assertions. The consumer finance unit, which is based in Atlanta and operates branches in Michigan and other states, "charges interest the same way any consumer finance company charges interest," a spokeswoman said.

She also said the operation's foreclosure rate "is well within industry standards."

Mr. Drent appeared to have chosen his forum carefully. The threat of a lawsuit may end up being a minor inconvenience to Fleet compared with the impact of Mr. Drent's testimony at the merger hearing, industry experts said.

The Fed governors are bound to prick up their ears if Mr. Drent blasts Fleet, analysts said.

"The Fed really gives weight" to comments that have a bearing on the Community Reinvestment Act, said Melanie Fein, partner in the Arnold & Porter law firm in Washington.

Fed staff members from Boston and Washington will run the hearing and will make the comments part of the record that the governors will consider once the hearings conclude.

Whether Mr. Drent's testimony could ultimately scuttle the merger "depends a lot on how Fleet responds," Ms. Fein said.

The Fleet spokeswoman said the banking company has been trying to establish a rapport with Mr. Drent, who says he knows of more than 50 consumers who have been affected by the finance company's actions.

"We have repeatedly asked him for names of the customers," the spokeswoman said. "But no such list has ever materialized."

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