BofA-Countrywide Deal in Jeopardy?

Last Updated Mar 10, 2008 2:48 PM EDT

Bank of America's proposed purchase of troubled lender Countrywide may have hit a snag: An influential California consumer-advocacy group is calling for state regulators to hold public hearings on the deal so that homeowners can have their say.

This is far from a threat to derail the acquisition, but the Greenlining Institute has a good track record at using regulatory approvals of such deals as leverage to ensure that the banks make and hold to commitments to lending to poorer borrowers -- a practice that banks have grown especially skittish about in the past year. Greenlining says it supports BofA buying Countrywide, it just wants the public hearing.

The group has formally asked both banks to meet with community groups and spell out how they plan to help homeowners facing foreclosure. This, in addition to talk among Democrats that such homeowners might deserve a bail-out or some other financial assistance to meet mortgage payments.

Countrywide's borrowers, and those at other banks as well, would benefit from this acquisition. But now it's looking a little harder to complete it without having to consider the input from some of the people actually holding mortgages.

  • Kevin Kelleher

    Kevin Kelleher writes a regular stock column at TheStreet.com and is a contributor to Wired, Popular Science, and GigaOm. He has previously worked as a reporter and editor at Bloomberg News, Wired News, and The Industry Standard.