BOSTON — A Fleet-Norstar Financial Group Inc. subsidiary charged with heavy-handed loan collection tactics “ought to be liquidated,” U.S. Sen. John Kerry said Monday.

But the president of Recoll Management Corp. said the senator’s proposal wouldn’t change the government’s mandate to recoup losses from the Bank of New England failure.

For months, borrowers and politicians have been criticizing Recoll, created by Fleet after it won last year’s bidding for Bank of New England.

Fleet won the bidding for the good assets and loans of the failed Bank of New England. The Federal Deposit Insurance Corp. retained loans classified as troubled, giving Recoll the task of collecting money.

Bank of New England was seized in Connecticut, Maine and Massachusetts on Jan. 6, 1991, in what is expected to be one of the most expensive commercial bank rescues in the nation’s history.

Recoll officials acknowledge they don’t have a popular job. But last week the FDIC found Recoll had not been following proper procedures, and Recoll put a moratorium on foreclosures to allow a case-by-case review.

Kerry, D-Mass., and Sen. William Cohen, R-Maine, heard borrower complaints at a hearing in Boston on Monday after a similar hearing Saturday in Maine.

“They acted toward us like we were convicted criminals or dogs,” said Mary Giglio, a Gloucester real estate developer. Giglio said she was never late on a monthly mortgage payment, but still encountered Recoll’s wrath.

Responding to the testimony, Kerry said: “My personal opinion is that Recoll ought to be liquidated.”

Kerry said the loan collection duties could be assumed by Fleet, which would bring the perspective of a bank rather than a collection agency.

But Thomas Lucey, president of Recoll, doubted Kerry’s idea would make much of a difference.

“It would not change the mandate,” Lucey said. He referred to the government’s efforts to collect troubled loans in order to minimize the cost of the Bank of New England failure.

Lucey said he would address any improper conduct by his employees.

Officials say the vast majority of loans that Recoll is charged with collecting are in serious trouble. The complaints, however, focus on a small portion where the borrowers are current with their payments. But the loans have been classified as troubled due to outside economic conditions, such as falling collateral values.

Ralph Steiger, president of Steiger’s Department Stores in Springfield, said his company has been hurt like other retailers in the recession and has cut its payroll by 20 percent.

Steiger said he tried to arrange new financing to emerge from the Recoll pool, but once lenders learned about the Recoll status, they wouldn’t help.

“We were in a trap,” he said.

But Steiger’s company has gotten a reprieve. His loan was among the 1,000 that Providence, R.I.-based Fleet has agreed to take from Recoll under a deal announced last week. Fleet officials say they can take a longer-term approach with these loans, but if the borrowers miss payments, the loans still can be put back into Recoll.

Richard Syron, president of the Federal Reserve Bank of Boston, said the government also needs to tackle the broader issue of tight capital.

Syron said regulators should not have forced banks to increase their capital ratios once they ran into trouble. As a result, banks have tightened credit, forced borrowers to repay loans and have taken few new customers.