Nov. 6 (Bloomberg) -- Brian Moynihan, a contender to succeed Bank of America Corp. Chief Executive Officer Kenneth D. Lewis, agreed to testify before Congress about his role in the Merrill Lynch & Co. takeover, people familiar with the matter said.

Moynihan, 50, who heads consumer banking, will appear at a House Oversight Committee hearing on Nov. 17, according to two people, who spoke anonymously because the schedule isn’t public. He’ll be joined by Timothy Mayopoulos, whom Moynihan replaced as general counsel in December as the Merrill deal almost unraveled. Mayopoulos has been interviewed privately, another person said.

“We’d hope the hearing would relate to events surrounding the departure of Timothy Mayopoulos from Bank of America,” said Jonathan Finger, a Bank of America shareholder who pressed for Lewis’ ouster as chairman earlier this year. “Another important area for the committee to look at is the legal advice that Mr. Moynihan gave to Ken Lewis for a talking-points memo prior to meeting with the bank’s board of directors later in December.”

The panel is investigating how Bank of America’s rescue of Merrill Lynch during last year’s financial industry meltdown turned into one of the most costly public bailouts covering both companies. The Charlotte, North Carolina-based bank needed $20 billion from the U.S., on top of $25 billion already awarded, plus $118 billion of guarantees to complete the purchase.

Federal Reserve Chairman Ben S. Bernanke, former Treasury Secretary Hank Paulson and Lewis testified earlier this year. The committee has since pressed the company to turn over related documents, and Bank of America complied on Oct. 16. Some were written by board member Chad Gifford, who also will appear at the Nov. 17 hearing, the people said.

Handwritten Notes

The committee is sorting through about 1,000 pages that include e-mails, correspondence among senior managers, lawyers and directors, and “talking points” for executives speaking with regulators, according to copies of about 50 pages obtained by Bloomberg News. Some e-mails list Moynihan as the sender or recipient.

Investigators also received handwritten meeting notes scribbled on hotel stationery and pads from Harvard Business School’s executive education program, attributed to board members and senior executives including Lewis and Chief Financial Officer Joe Price.

The committee is focusing on the bank’s deliberations last December on whether to abort the Merrill takeover as fourth- quarter losses at the New York-based brokerage swelled, ultimately totaling $15.8 billion.

No Reason

Merrill, the world’s biggest broker, agreed in September to be acquired after more than $50 billion of losses and writedowns tied to the collapse of the subprime-mortgage market. Bank of America concluded the transaction over the same weekend that Lehman Brothers Holdings Inc. collapsed.

One e-mail shows Bank of America discussing the growth in Merrill’s losses as early as Nov. 5. Mayopoulos was ousted Dec. 10, nine days after he told Lewis the losses didn’t create a legal case for canceling the Merrill purchase, according to a person familiar with the matter. In an interview with committee investigators last month, Mayopoulos repeatedly said he was given no reason for his dismissal, the person said.

A Bank of America press release on Dec. 10 said Moynihan had succeeded Mayopoulos as general counsel. Mayopoulos now is general counsel at Fannie Mae.

MAC Clause

The bank’s legal adviser, Wachtell Lipton Rosen & Katz, wrote a memo Dec. 18 memo to bank management questioning whether a “material adverse change” had occurred even as Merrill’s fourth-quarter losses soared, according to a document provided to the committee.

Lewis, 62, told regulators Dec. 17 he might invoke the so- called MAC clause and cancel the merger. That sparked meetings with Paulson, Bernanke and other government officials, who pressed Lewis to complete the purchase, citing risks to the bank and the financial system if Merrill collapsed. Paulson testified that he told Lewis the Fed might remove management and the board. Lewis decided to proceed with the Merrill deal.

The documents include notes from a meeting written on Harvard Business School stationery that attributes remarks to “Ken” dated Dec. 19, 2008. “Deterioration accelerating; fin svc melting down to epic proportions,” wrote the author, who isn’t identified.

Moynihan was named head of investment banking and wealth management in January, then moved in August to lead consumer banking. He and Chief Risk Officer Greg Curl, 61, are considered the most likely internal candidates to replace Lewis, people familiar with the situation said last month. Lewis, who has been criticized for not telling shareholders about Merrill’s losses and bonuses before they voted on the deal, is leaving at the end of the year.

Gifford’s Mail

Documents from Gifford, the bank board member, include a Jan. 15 e-mail about the bailout in which he wrote, “Unfortunately, it’s screw the shareholders,” according to documents provided to the committee.

The documents show Gifford received an e-mail the same day from Al de Molina, a former chief financial officer and now the head of GMAC Inc., under the subject line, “Are you available.” De Molina, 52, has also been named in speculation about a successor to Lewis. The text of the message isn’t visible in the copy reviewed by Bloomberg.

The Charlotte Observer reported yesterday that the House Oversight Committee had asked the bank to make Moynihan available on Nov. 17. Bank spokesman Larry Di Rita said the bank is cooperating with the committee and declined to elaborate.

Mayopoulos declined to comment, according to his lawyer, Ed Hinson. De Molina and Jenny Rosenberg, a spokeswoman for the House Oversight Committee, declined to comment. Gifford didn’t respond to a request for comment.

To contact the reporter on this story: David Mildenberg at dmildenberg@bloomberg.net

Last Updated: November 6, 2009 10:09 EST