BANKING & FINANCE - Nov. 20, 1993

Fed Explains Its Move Against Shawmut: The Federal Reserve Board said it rejected Hartford, Conn.-based Shawmut National Corp.’s proposal to buy a New Hampshire bank because the Justice Department is investigating possible discriminatory lending by a subsidiary and shortfalls in Shawmut’s fair-lending program. However, some community activists say Shawmut has steadily improved its lending record since 1990 and this year unveiled two strong community lending initiatives. Union Neighborhood Assistance Corp. in Boston, a fair-lending watchdog group, negotiated a new flexible mortgage with Shawmut and the Federal National Mortgage Assn. this year. The Fed on Monday rejected Shawmut’s $137-million purchase of New Dartmouth Bank.