WASHINGTON

Eight senators persuaded the Farm Credit Administration to delay a rule that would liberalize eligibility to borrow from the system - a victory for rural banks. Page 2

Critics of federal buyout programs call them costly "golden handshakes" that eliminate employees who would have retired anyway. But the FDIC claims its buyout program has been cost-effective. Page 4

REGIONAL BANKING

Banks usually must struggle to recover market share after a large merger, but Unionbancal has shown no sign of a setback since its April 1 merger of equals. Page 7

COMMUNITY BANKING

When a merger threatened the only bank branch in tiny Barnes, Kan., many of the town's 180 residents mobilized to save it. The uproar persuaded a second bank to buy and operate it. Page 8

Several of New Mexico's 11 savings institutions are gearing up to convert to commercial banks. Page 8

SPECIAL REPORT

Whether a bank creates its own funds or sells those of an outside company, it's in for a wild ride once it crosses into brokerage territory. To master complex rules, vie with competitors, and create a sales culture, most banks initiate a host of vendor relationships. Managing these connections is a big task - and the focus of this special report. Pullout section

MORTGAGES

Northern Trust hired a top mortgage executive from a Chicago rival to lead a push in home lending, especially to lower-income borrowers. Page 10

ContiFinancial promoted several key executives in its home equity lending division after a year in which the unit more than doubled originations. Page 11

INVESTMENT PRODUCTS

Charles Schwab & Co. hired former First Interstate executive Steven Scheid as its chief financial officer. Page 12

First of America is shopping for an agency in Indiana, Michigan, or Illinois as part of an expansion of its insurance sales program. Page 14

CREDIT/DEBIT/ATMs

Fair, Isaac, a pioneer of credit scoring, has been stumped for an explanation of a 25% spike in bankruptcy filings but notes an increase in the number of recent bank card account openings. Page 17

TECHNOLOGY

William Melton is fed up with those doubting safety in Internet payments and commerce. The risks are under control, says the founder and chairman of Cybercash. Page 18

FINANCE

First Union named Robert Healy managing director and head of its loan syndication group after two years as a managing director in the group and 15 years in Chemical Banking's loan syndication group. Back page

Some investors are in for a disappointment when Wells Fargo releases the first quarterly earnings report since its First Interstate merger, says Salomon Brothers. Back page

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