House to subpoena Fed documents on BofA-Merrill deal

Charlotte ObserverJune 9, 2009 

A House committee said Tuesday that it will subpoena the Federal Reserve for documents related to Bank of America Corp.'s purchase of Merrill Lynch & Co.

A Fed spokeswoman said the agency had received the subpoena and expects to “respond fully and completely as requested.”

The committee, called the Committee on Oversight and Government Reform, is examining Charlotte-based Bank of America's purchase of Merrill and whether regulators inappropriately pressured the bank into completing the deal. The committee asked the Fed last week for copies of certain documents, including e-mails from Fed chairman Ben Bernanke to other high-ranking agency officials. Most date from mid-December, when bank chief executive Ken Lewis says he first considered backing out of the Merrill purchase, to mid-January, around when the bank announced Merrill's massive fourth-quarter losses and an extra $20 billion in government loans to support the Merrill deal.

The House committee had asked the Fed to turn over the documents by last Friday, but the Fed has expressed concerns about releasing confidential supervisory information. The Fed had already allowed committee staffers to review 6,000 pages of documents, but had not provided copies.

“Complying with this request should not be difficult as Committee staff have previously reviewed these documents and marked their locations,” the committee's leaders wrote in last week's letter to the Fed. “However, to facilitate coping and delivery, we would be happy to have someone assist your staff in locating the particular documents.”

Lewis has said he considered backing out of the Merrill deal last fall as Merrill's losses mounted, but that regulators “strongly encouraged” him to go through with it. In testimony to the New York Attorney General's Office, Lewis has said that regulators threatened to oust him and bank directors.

Lewis will testify to the committee on Thursday. A bank spokesman declined to comment on the subpoena.

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