BofA Board Shake-Up Pressed by Feds

The winds of change continue to blow against Bank of America's (BAC Quote) board.

The Wall Street Journal said Friday that regulators are pressuring BofA to shuffle its board to include more directors with experience in the financial services industry. It would not be the first time the government has stepped in to replace or urge change in the top ranks of troubled companies receiving taxpayer support. Citigroup (C Quote), American International Group (AIG Quote), Fannie Mae (FNM Quote) and Freddie Mac (FRE Quote) have made changes to their boards and executives at the behest of regulators.

However, each of those firms has received far more government assistance, making the BofA case unusual. Also, many of Bank of America's problems stem from its acquisition of the teetering investment bank Merrill Lynch, which was completed after allegedly heavy-handed pressure from Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke.

While the Journal, citing anonymous sources, didn't say that regulators are pushing CEO Ken Lewis to resign, a move to reshuffle BofA's board could put added pressure on him. Shareholders who were angry about the Merrill deal and the firm's stock performance stripped the CEO of his chairman title at BofA's annual meeting in late April.

Spokesman Robert Stickler told the Journal that all banks were required to review their boards and management, and Lewis "got the shareholder message" and found the vote "humbling."

During a conference call on Monday, Lewis deflected questions about when he planned to leave the firm, and who would replace him, by saying "that's the board's decision." He repeated his desire to stay on board until the firm begins to repay the $45 billion in government funds it has received.