Bank of America (NYSE: BAC) Paying Back Tarp, Finds The Next CEO?

Ken Lewis, the embattled chief executive who is stepping down at the end of this month may have saved his best for last. Bank of America (NYSE: BAC) has taken a major step late today: they have announced that they will repay the $45 Billion in taxpayer funds it received in last year’s TARP program.

This announcement could not have come sooner, as the bank has come under considerable scrutiny recentlay from the government’s pay czar Ken Feinberg. The compensation limitations had also damaged the bank’s ability to fill the CEO role, as candidates would have faced compensation packages at a significant discount to comparable firms not facing such restrictions.

Reportedly, at least one candidate turned down the job due to the issue of government restrictions on compensation. Greg Curl, 62, the bank’s Chief Risk Officer acted as the lead negotiator with the Federal Reserve on the TARP repayment, and this accomplishment may bode well for him, in his own candidacy for the chief executive role. Curl also acted as the lead negotiator in BofA’s acquisitions of Merril Lynch, Countrywide, and LaSalle Financial.

As outside candidates have become disinterested in recent weeks due to the limitations and Charlotte location, Curl was quietly building relationships with the bank’s overseers in Washington, as well as internal council and deal teams. The skill set he acquired during this time may very well make him the leading candidate to manage the firm in it’s next phase.

Ken Lewis has also recommend Curl for the job shortly after his announced resignation of September 30th, though at the time the Board rejected the idea, as Curl was one of his closest allies at the bank. The Board is reportedly also considering Brian Moynihan for the role, who serves as BofA’s head of retail banking operations, but head has only been in the job for four months. To his credit though, Moynihan also worked closely with officials in Washington during these past two months, seeking to assure them that the bank understood the major issues, and was developing plans to address them.

A senior insider revealed that the board was leaning towards appointing an insider, after having minimal interest from outside candidates such as BNY Mellon’s Chief Robert Kelly, Citigroup’s Michael O’Neill, and Barclays’ Bob Diamond.

The appointment of Mr. Curl would not offer a leader for the next decade, but would buy the firm another two to three years, during which they could develop a deeper bench of talent, or become attractive to an outside superstar leader, to take the firm to the next level.