WASHINGTON - One year to the day after Chevy Chase Federal Savings Bank settled its controversial fair-lending case, the banking industry still can't agree what it means.

Observers are split into two camps: those who believe Chevy Chase is just the start of things to come and those who contend it was the crest of the fair-lending enforcement wave.

Andrew Sandler, an attorney who represented Chevy Chase, said bankers are deceiving themselves if they believe the Justice Department has backed off.

"The continuing controversy concerning the Chevy Chase consent decree has not dissuaded the Department of Justice from aggressively pursuing its fair-lending enforcement program," said Mr. Sandler, a partner in Skadden, Arps, Slate, Meagher & Flom.

Future cases are unlikely to mirror Chevy Chase's, he said. The next generation of bias cases will focus on pricing issues and gender and age discrimination, Mr. Sandler predicted, and banks, mortgage companies, and finance companies will be affected.

The government will continue to stretch the law, agreed Karen Shaw Petrou, president of the consulting firm ISD/Shaw Inc. "If Justice brings credible cases with real victims as well as elaborate theories, even this Congress won't 'mau mau' them," she said.

Others take the opposite view. They say the outcry over Chevy Chase forced the Justice Department into permanent retreat.

"Aug. 22, 1994, will mark the turning point," said Kenneth Thomas, a Miami-based expert who is writing a book on the case. "That is when things started to go downhill. That was the watershed mark."

Justice has reached only one lending bias settlement since last summer, and nothing appears on the horizon, he said.

"I'd be surprised if there is anything as aggressive again," agreed David Roderer, a partner at Winston & Strawn in Washington.

Bert Ely, president of the industry consulting firm Ely & Co., said the government could bring Chevy Chase-like cases only while Democrats were running Congress. It wouldn't dare now that Republicans are in power, he said.

The Justice Department and regulators contend that the Chevy Chase case was nothing more than a continuation of their efforts to stamp out discrimination.

The public became so fixated on the settlement's requirement that Chevy Chase open new offices in minority neighborhoods that its significance was overblown, said Deputy Comptroller of the Currency Stephen Cross.

"Chevy Chase was, in the public domain, viewed as something it wasn't," Mr. Cross said. "From my perspective, it was an old-fashioned red-lining case."

While Deval Patrick, assistant Attorney General for civil rights, agrees, he said the Justice Department is not retreating. "The emphasis on the enforcement of the fair-lending laws is as strong as it ever has been," he said.

Northern Trust Co.'s settlement in June of fair-lending charges shows the agency hasn't abandoned the fight, he said. Other investigations are continuing, he said, although he declined to specify their number, variety, or timetable.

Who's right? Many observers said the answer doesn't matter because Chevy Chase put the industry on notice that lending bias won't be tolerated.

"It certainly was a major wake-up call for the industry," said Donald Mullane, executive vice president of Bank of America, the lead subsidiary of BankAmerica Corp. "Everyone evaluated their programs."

Even the Justice Department is now noting Chevy Chase's improvements. In a recent interview, Mr. Patrick offered new statistics to show that the thrift now lends throughout the neighborhoods it once ignored.

So what is this case that still manages to divide the banking community one year later?

Simply put, Chevy Chase was a marketing controversy. The government charged that the thrift excluded minority communities in the District of Columbia and neighboring Prince Georges County, Md.

"To shun an entire community because of its racial makeup is just as wrong as to reject an applicant because they are African-American," Attorney General Janet Reno said at the time. "You can't deny service if no service is offered."

The government never cited specific instances in which the thrift had refused to serve a minority group member. But it alleged that Chevy Chase ordered employees to avoid serving these communities.

"It is discrimination, pure and simple," Ms. Reno told a room packed with reporters and TV cameras.

Chevy Chase settled the charges, agreeing to fund $140 million of cut- rate mortgages, to open an additional branch, and to establish three loan production offices in minority neighborhoods. The thrift said the deal cost it $11 million.

The thrift went on the offensive, saying it settled to avoid the high costs of litigation and launching a media blitz to tell the public that 71% of all its Washington, D.C., mortgages were in the allegedly red-lined communities. Chevy Chase also noted that the Office of Thrift Supervision had prevented it on safety and soundness grounds from expanding into these communities until 1993.

Industry trade groups condemned the deal, charging that the Justice Department was telling bankers how to run their businesses.

The agency quickly toned down its comments, saying that Chevy Chase had been a traditional red-lining prosecution. Mr. Patrick and his deputies began addressing any trade group that would listen to explain their view of the case.

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