WASHINGTON

The $340 million fine Japan's Daiwa agreed to pay for covering up huge trading loses and illegal trades should signal banks that the government will punish attempts to deceive regulators, lawyers said. Page 3

The chartering of a credit union for Wisconsin Farm Credit System borrowers has unleashed a firestorm of criticism from rural banks and their political allies. Page 2

MORTGAGES

B of A expects its $14 billion purchase of servicing rights from First Bank System to strengthen name recognition among Midwest consumers. "I'm suddenly servicing those customers, and I'm mailing solicitations to them for various products - credit cards and home equity lines," says B of A's Arthur Ringwald. "We're building awareness." Page 5

Californians are ending their love affair with adjustable-rate mortgages. Only 22% of purchase loans closed last month were adjustables, down from 56.3% in January 1995, a study found. Page 4

REGIONAL BANKING

U.S. Bancorp has joined the new wave of banks jumping into supermarket banking. The Oregon company plans to open about 200 such branches over four years, including 170 in Albertson's stores in four western states. Page 6

Dutch ABN Amro says it will challenge First Chicago NBD for retail banking leadership in the Windy City and also go after its middle-market lending business. text here. Page 6

COMMUNITY BANKING

The biggest credit union trade group says a survey confirms that banks charged more and bigger fees. Regular checking fees averaged $5.97 a month at banks in this study, for example, versus $3.59. Page 8

Far from being worried by U.S. Bancorp's plan to buy California Bancshares, some Northern California community banks foresee a bonanza. A spate of recent deals in the area is said to be driving customers into the arms of the smaller banks. Page 8

INVESTMENT PRODUCTS

The stock market's phenomenal rise is giving some bankers cause for concern - over how to keep customers calm when the inevitable decline arrives. Page 10

CREDIT/DEBIT/ATMs

MasterCard has arranged discounts on Hypercom point of sale terminals for members around the world. The deal would save millions of dollars and add 40,000 terminals in the United States alone, the card association said. Page 12

Cobranded cards are no longer above the pricing fray. In the third quarter more than 50% of cobranded offers sported teaser rates, up from 20% a year earlier, and 80% offered balance transfer options. Page 12

TECHNOLOGY

Recent complaints about electronic bill payment operations may spur improvements. Banks will have to improve service, make error correction extremely easy, and ride herd over the third-party providers, a consultant says. Page 13

Servantis Systems announced a cooperative marketing deal in home banking with Prodigy, the popular on-line service. Terms were not disclosed. Page 13

FINANCE

Shares of card specialists are still a good buy, Sanford C. Bernstein & Co. says, even though issuers could suffer worse credit losses than in previous economic cycles. Back page

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