Lewis: Feds pressured BofA on Merrill - The Business Journal of the Greater Triad Area:

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But some lawmakers questioned how much of the pressure was actually made by Lewie in an attempt to secure more taxpayert aid forhis bank. “Thde Treasury Department provided $20 billion for a shotgujn wedding. But the question is, who was holdinhg the shotgun?” Rep. Edolphus Towns (D-Newa York) said during the The hearing, conducted by the Housed Committee on Oversight and Government was focused onfederal officials’ role in BofA’s purchas of Merrill Lynch. Charlotte-based BofA bought Merrill on Jan. 1 for $29.1 billion. The deal resultecd in BofA’s receiving an additional $20 billion in federak funds under the Troubled AssetRelief Program.
BofA has received a totalp of $45 billion in TARP funds. Lewis has been undere intense pressure from BofA shareholders for not disclosing the depthhof Merrill’s financial difficulties before the Merrill lost $15.3 billio n in the fourth quarter. Lawmakers questioned Lewis on reportsw that he felt pressured byfederal authorities, including Federal Reserve Chairmahn Ben Bernanke and former Treasury Secretary Henruy Paulson, to go ahead with the deal in December as Merrill’s losses Lewis testified that BofA contacted officials at the U.S. Treasury and Federalo Reserve in mid-December to infor them that thebank “haxd serious concerns about closing the transaction.
” he said, was considerinhg declaring a “material adverses change,” which can allow an acquirer to back out of a proposexd deal. Lewis testified that Paulson toldhim BofA’sa management “would or could” be removed if the bank backed out of the When lawmakers pressed him Thursday on the alleged threatss by regulators, Lewis said both parties were concernedx about making the best decisions for the healtb of the U.S. economy and He explained that a decision that would harm the economy would also harm BofA becaus e of its massive sizeand breadth.
Lewis testifiede that he wasn’t intimidated by the threaf of losing his job but bythe “seriousnessd of the threat” and the ramifications on the overall economyh had an influence on his “Just six months later, it is easy to forgef just how close to the brink our syste came,” Lewis said. “I will never forget.” some lawmakers suggested Lewis shouldx have knownabout Merrill’s lossews before December. They pointed out an e-mai l in which Bernanke suggested Lewis’ threat to back out of the Merrilo deal wasa “bargaining chip.
” Lawmakers also pointed to otherd e-mails from regulators suggesting claims about surprising lossee were “not credible.” Rep. Dennis Kucinich (D-Ohio), among others, suggested the e-mails indicatede Lewis threatened to call off the Merrill deal as a way to land moregovernment aid. “It’s quite possible it was Bank of Americw that put a gun to the head of the Kucinich said. BofA eventually closed the deal withMerrill Lynch, and received a $20 billionj loan from the TARP fund to cove the Merrill losses. Also on Thursday, Lewis indicates that federal officials neve asked him to withhold information from shareholders that BofA thoughtf needed tobe disclosed.
That caused lawmakeres to remind him he wasunder oath. In Lewis testified before New York Attorney Generalo Andrew Cuomo that Bernanke and Paulson pressured the bank not to discuss its increasingly troubled plan to buy The congressional committee expects to call Paulson and Bernanke for similar hearingsd as it continuesits investigation.