Countrywide Acquisition: Fed will allow advocacy groups to have their say

March 27, 2008

Community groups will get a chance to speak out on Bank of America Corp.'s $4 billion acquisition of troubled lender Countrywide Financial Corp.

The Federal Reserve Board on Thursday said it will hold public hearings in Chicago and Los Angeles next month on a deal that would give the Charlotte bank the top spot in mortgage lending.

Community groups in California and elsewhere had urged the regulator to hold meetings on the takeover. The groups have expressed opposition to the deal unless Bank of America outlines a plan for staving off foreclosures.

The Fed is the primary regulator reviewing the acquisition announced in January as Countrywide struggled amid the nation's mortgage meltdown. The Chicago hearing will be April 22, followed by meetings in Los Angeles April 28 and 29.

The meeting is to collect information on the possible benefits and adverse effects of the acquisition, the Fed said. The regulator extended the public comment period on the acquisition to April 29 from March 31.

The Fed isn't required to hold hearings but has in some cases, including Bank of America's $48 billion acquisition of FleetBoston Financial Corp. in 2004. The last hearing was in April 2004 for JPMorgan Chase & Co.'s Bank One Corp. purchase.

'We look forward to presenting Bank of America's position regarding the merger during the hearings,' bank spokesman Scott Silvestri said. Bank of America has said it expects the deal to close in the third quarter but in filings has said a hearing could prolong the Fed's review.

Separately, Bank of America said in a filing Thursday that Countrywide executive David Sambol, who will become head of Bank of America's mortgage unit after the merger, has entered into a retention agreement that replaces a previous severance arrangement. Under the agreement, he would get $20 million payable over two years if he meets certain requirements. He would also get an $8 million restricted stock grant that would vest over three years.

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