WASHINGTON:

THE FEDERAL Reserve Board's inspector general will investigate one of the industry's biggest complaints - that examiners differ in how they interpret rules. Page 3

A CALIFORNIA appeals court slashed a judgment against First Interstate by more than $9 million, ruling that credit card holders can't use a quirk in the law to avoid high interest charges by refusing to pay their bills. Page 2

CREDIT/DEBIT/ATMs:

MASTERCARD CEO H. Eugene Lockhart offered a tantalizing glimpse of consumer research that indicates increasing acceptance of electronic transactions. Speaking to the Smart Card Forum, he said as many as seven out of 10 transactions are performed by ATM, phone, or other nonbranch means. Page 14

SOVEREIGN BANCORP is putting an old but unproven credit card marketing idea to the test. The Pennsylvania thrift is offering a card linked to a home equity line of credit.

Page 15

REGIONAL BANKING:

DIRECTORS of Meridian Bancorp are scheduled to meet today, and one item on the agenda is sure to be a possible merger or sale of the Pennsylvania bank. Page 4

BANK OF BOSTON Corp. plans to open at least 10 more branches in Brazil as part of a program to develop a broader range of customers there. Page 4

COMMUNITY BANKING:

A SPANISH BANK that had planned to spin off its domestic banking subsidiary on New York's Long Island through a public offering is instead selling it to North Fork Bancorp for $47 million in cash. Page 6

A MILWAUKEE fair-lending group is trying to derail a merger agreement between North Shore Bank and BadgerBank that would create Wisconsin's largest mutual savings bank. Page 6

INVESTMENT PRODUCTS:

FLEET FINANCIAL has snared a senior executive from one of the nation's largest insurance companies and entrusted him with the job of building an insurance business from scratch. Page 8

FIRST INTERSTATE is planning to give trust clients access to real- time account information with Windows-based software. The program, scheduled to start in November, will let customers generate customized reports instantaneously. Page 8

MORTGAGES:

THE HEAD of Anchor Mortgage Services until its takeover by Dime Savings Bank has joined GFC Mortgage Bankers in New York as president and chief executive.

Page 10

LENDERS are countering continued low volume by beefing up their servicing portfolios and looking toward subprime loans. Page 10

TECHNOLOGY:

THE FINANCIAL Services Technology Consortium, a group of prominent banks, technology vendors, and research institutions, has demonstrated a purchase over the Internet. Page 17

CHASE MANHATTAN and Nynex have unveiled the prototype of an electronic payment system designed to let consumers bank and shop by interactive television and personal computer. Page 17

FINANCE:

THE ANNOUNCEMENT that Brooklyn Bancorp is being acquired is likely to shift investors' attention to New York City thrift institutions. Back page

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