WASHINGTON Illinois has passed a law empowering state banks to sell virtually any product or service if at least one other state allows it. Page 2 NATIONAL/GLOBAL Bank of America said it would make $3 billion in home loans over 10 years to poor and moderate-income families in an arrangement with the nonprofit Neighborhood Assistance Corporation of America. Page 4 Banking analysts are starting to voice concern about an accounting rule that would force companies to mark the value of all their derivatives to market. Page 5 COMMUNITY/REGIONAL Gold Banc Corp. of Leawood, Kan., plans to enter the Colorado market by acquiring Denver-based Union Bankshares for $65 million of stock. Page 7 A New York credit union scaled back expansion plans after protests from banks and other credit unions. Page 7 TECHNOLOGY Three Banks and Visa, using a system from San Francisco-based Bankserv, have jumped on the bandwagon of converting point-of-sale checks into electronic debits. This indicates "an enormous momentum building across the country in the merchant base for check conversion," says Bankserv president David Kvederis. Page 13 INVESTMENT PRODUCTS Alliance Capital Management is betting big on third-party marketers as part of its growth strategy for sales through smaller banks. Page 8 MORTGAGES Banc One Mortgage has agreed to sell about $3 billion of servicing rights to First Nationwide Mortgage, a unit of California Federal Bank. Page 10 CFI Mortgage Services, a once-hot subprime lender that declared bankruptcy in March, is out from Chapter 11 and trying to reestablish itself under a new name. Page 11 SMART CARDS IBM and IC One Inc., a developer of smart card loyalty systems, are entering into a strategic partnership. They plan to jointly develop card-based systems for schools, hotels, and on-line shopping, among other uses. Page 14 Pathways Group, a systems development firm in Washington state, is expanding smart card initiatives with the state of Hawaii and in the movie theater industry. Page 14 MARKETS In line with the plunge in bank stock prices, bank bonds are selling at the biggest discount to comparable Treasury issues since the 1998 financial crisis. Page 22

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