MERCHANT PROCESSING: With credit cards bigger than ever, so too is the business of processing the transactions for merchants. But many banks are on the outside looking in, having exited in leaner times. We assess the state of the market, banks' renewed interest, and the growth potential in electronic commerce. Pages 9-15


THE OFFICE of Thrift Supervision is streamlining its lending rules - the first major change since 1983. Page 2


KEYCORP has put a new wrinkle in credit card pricing, allowing customers who make higher monthly payments on a MasterCard to pay lower rates. Page 8


UST CORP. of Boston will more than double in size once two large acquisitions are completed, and its chief executive and staff are about to be tested. Page 16

HAVEN BANCORP will quintuple its New York City-area branch network with a deal to open 44 full-service branches in Pathmark supermarkets. Page 17


TWO EXECUTIVES who bought a start-up from a small Florida thrift are planning to expand aggressively. Page 18

A MORTGAGE Bankers Association survey found that about 97% of all homeowners prefer to apply for mortgages in person. Page 19


HOME SAVINGS of America used its purchase of 61 First Interstate branches to trigger a small-business lending frenzy. Page 20

A PHOENIX START-UP bank is betting that local small businesses want an alternative to the out-of-state banks that dominate the Arizona market. Page 21


BANK OF BOSTON may sue Massachusetts regulators for denying its application to sell insurance from a small town. Then again, state officials may find a way to let the bank into the market. Page 22


MICROSOFT has released a new version of its Money personal financial management software, launching an assault on Intuit's Quicken system. Page 25

VERIFONE is claiming a breakthrough toward one of electronic banking's holy grails: an ATM in the home - or in the pocket. The California company is introducing Personal ATM, a palm-size device with a smart card slot that allows value to be loaded onto the card via telephone. Page 26


INITIAL PUBLIC offerings of subprime automobile finance companies may be skidding to a halt because of consumer-credit concerns. Page 33

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