WASHINGTON

Two recent court rulings zero in on how to prove a bank policy biased and how to distinguish between an honest mistake and a discriminatory loan rejection. Page 4

To satisfy antitrust concerns about their merger, Bank of Boston and BayBanks agreed to sell 20 branches with total deposits of $860 million to Boston-based USTrust. Page 2

REGIONAL BANKING

Unionbancal, which has protected senior executives in duplicate roles since its merger of equals, is about to lose its first high-level official. William Sweet, executive vice president of corporate and real estate banking, will retire at the age of 59. Page 7

COMMUNITY BANKING

Rochester Community Savings in New York says it told them how to avoid insider-trading charges during merger talks, but three ex-officials were charged anyway. Page 8

A new book-and-video package developed by the ABA promises to help executives of smaller banks jump-start their electronic banking services. Page 9

MORTGAGES

Its regulator says Fannie Mae needs a better handle on interest rate risk in its giant mortgage portfolio. Aida Alvarez, director of the Office of Federal Housing Enterprise Oversight, says that until the advent of risk-based capital rules her agency is developing she worries that "existing enterprise capital may not be sufficiently high." Page 11

A new accounting rule requiring servicers to include originated mortgage servicing rights on their balance sheets has taken a toll on sales of servicing rights. Page 10

INVESTMENT PRODUCTS

Family offices - tightly controlled services set up by wealthy families to direct their investments - are hearing complaints about the types of investments selected and how portfolio information is delivered. Page 12

CNB Bancshares in Indiana has expanded its insurance agency by purchasing a competitor's clients. Page 13

CREDIT/DEBIT/ATMs

American Express has unveiled a second cobranding program with a hotel chain, ITT Sheraton, to strengthen its position in the travel and entertainment market. Page 14

Household International has big marketing plans for the AFL-CIO credit card portfolio it is buying from Bank of New York. Page 15

TECHNOLOGY

Alltel will not replace John E. Steuri, who retired May 31 as chairman and CEO of its outsourcing unit. That means less oversight for the five fiefdoms within Alltel Information Services. Page 16

Citicorp account holders throughout the New York area will soon be able to send and receive electronic mail on the screen phones they're testing for the bank. Page 17

FINANCE

The major credit card banks are undervalued because investors have failed to take into account the companies' franchise value, an analyst writes. Back page

Banks' growing reliance on bonds for funding has started a vicious cycle, a New York rating firm concludes. Page 22

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