WASHINGTON

At a Senate hearing, federal regulators pledged to issue guidelines early next year to crack down on bank lending to hedge funds. Page 2

REGIONAL

BankAmerica reversed a decision to end its direct deposit service to the San Francisco Unified School District. Page 3

Chittenden of Vermont said after markets closed that it has a deal to buy Vermont Financial Services for $454 million in stock. Page 4

INVESTMENT PRODUCTS

Alliance Capital, pursuing its plan to become one of the top distributors of mutual funds through banks, hired four more dedicated wholesalers. Page 10

CARDS

delinquencies on consumer loans declined modestly in the third quarter, the American Bankers Association said. Page 13

MORTGAGES

Abandoning mortgage servicing wasn't easy for BankAtlantic, a Florida lender that had made the business a cornerstone for the last 30 years, chairman Alan B. Levan says. "We'd undertaken a yearlong study and found that mortgage servicing no longer represented the opportunity it once had," he says. Page 6

DIGITAL FRONTIERS

ON-LINE BANKING: Web-based brokerages like E-Trade Group, DLJ Direct, and Charles Schwab have opened offices in the Far East. Page 14

Microsoft said it will make the source code for its Marble Internet banking tools openly available for licensing to systems developers. Page 14

TECHNOLOGY

A bright spot in First Union's acquisition of Money Store has been the lender's student loan operation, Educaid. Page 15

CORPORATE FINANCE

Starwood Financial, a real estate investment trust, bought Lazard Freres' commercial real estate loan portfolio for $280 million, the firms said. Page 29

Polaroid reached an agreement with its 14-member bank group to amend the terms of a $350 million credit line led last year by J.P. Morgan. Page 29

MARKETS

Union Planters could miss its fourth-quarter earnings estimates as it focuses on closing and integrating 20 acquisitions, analysts say. Back page

WEEKLY REPORT: INTERNATIONAL

building on an alliance with HSBC, Wells Fargo is expanding its use of a technique to help companies get rid of export-related credit risks. Page 18

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