Bank of America names Brian Moynihan CEO

NEW YORK (CNNMoney.com) -- Bank of America appointed senior executive Brian Moynihan as its new chief executive officer, the company said late Wednesday, putting an end to months of speculation about who would lead the nation's largest bank.

"I have worked closely with Brian Moynihan for six years, and I believe he is the right person to lead our company forward," exiting CEO Ken Lewis said in a statement. "He is a decisive leader and an exacting manager.

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Outgoing Bank of America CEO Ken Lewis spent eight years leading the company, transforming it into the nation's largest bank.

Moynihan, 50, is currently president of Consumer and Small Business at BofA. He was previously head of Global Wealth and Investment Management at FleetBoston Financial, which was acquired by BofA in 2004. Moynihan worked for FleetBoston for 11 years.

"Brian has been the top executive leading wealth management, corporate and investment banking and consumer banking. His work with international clients in our capital markets businesses has given him broad knowledge of and perspective on global financial services markets," said BofA chairman Walter Massey, who led the successor search, in a statement.

Lewis took the company's board of directors by surprise in September when he announced his plan to retire from the firm.

He had publicly promised to serve until the bank paid back the $45 billion the company received last fall under TARP, or the Troubled Asset Relief Program.

In the end, however, scrutiny over the Merrill Lynch deal proved too much for Lewis, who will retire on Dec. 31.

"We have everything we need at Bank of America to be the best financial services company in the world," said Moynihan in a statement. "What we need to do now is very simple. We need to execute."

In mid-January, the company revealed that it needed an additional $20 billion in government aid, to help the company absorb its purchase of the investment banking firm.

That came on top of $25 billion that Bank of America had already received from the government as part of the Troubled Asset Relief Program, or TARP.

The merger proved to be an even bigger headache for Lewis amid allegations that Bank of America failed to alert shareholders in its proxy statement to the fact that Merrill had authorized billions of dollars in bonus payments to its executives.

Investors who were angry about the merger and the company's ailing stock stripped Lewis of his title as chairman in April at the company's annual shareholder meeting.

Months later, he was dragged into the center of an ongoing Congressional investigation into the Merrill deal. Some lawmakers accused Lewis of threatening to scuttle the deal as a "bargaining chip" for more government assistance.

In an effort to deflect some of the scrutiny that the firm was facing over compensation from Obama administration "pay czar" Kenneth Feinberg, Lewis agreed in October to decline a salary and a bonus in his final year as CEO

News of Lewis' retirement left Bank of America's board of directors scrambling for a replacement suitable to take the reins from the 40-year veteran of the firm.

The names of numerous candidates circulated in the following weeks, including William Demchak, a leading executive at Pittsburgh-based PNC (PNC, Fortune 500) as well as Robert Kelly, the current chairman and CEO of Bank of New York Mellon (BK, Fortune 500). Even outgoing New Jersey Governor John Corzine and BlackRock (BLK, Fortune 500) CEO Larry Fink were both briefly rumored as possible candidates for the post.

It was widely believed however, that many possible successors to Lewis were scared off by the level of government scrutiny they would have to endure if they accepted the job.

As one of seven companies to get "exceptional" government assistance, BofA has had to succumb to a handful of government demands, including having the pay packages of its top executives reviewed Feinberg.

But the company cleared that particular stumbling block on Dec. 9, when Bank of America repaid the entire $45 billion in bailout funds.

Still, there are plenty of challenges ahead for Moynihan once he takes the helm.

A sweeping set of changes are set to go into effect for the credit card industry in February. BofA is currently the second largest issuer of credit cards in the country, according to the industry trade publication Nilson Report. Even more changes are likely ahead as Congress pushes forward with additional banking industry reforms.

There has even been increased talk on Capitol Hill of giving regulators the power to break up some of the nation's largest financial institutions, a group that would most certainly include BofA.

At the same time, the company faces what could be an ugly legal fight with the Securities and Exchange Commission over BofA's alleged failure to notify shareholders of its decision to pay Merrill executives outsized bonuses last year.

BofA had originally worked out a $33 million settlement with the SEC over the matter, but a judge threw out the agreement, setting the stage for a trial in early 2010.