WASHINGTON -- The Federal Reserve Board has approved a bid by BankAmerica Corp. to acquire Liberty Bank, Honolulu.

The deal will allow the company to merge Liberty Bank into Bank of America FSB, Portland, Ore. Once consummated, Bank-America will be the third largest lender in Hawaii, controlling deposits of $1.8 billion.

The Fed approved the deal on the condition that the thrift carry out a number of community reinvestment initiatives, and that it address fair-lending concerns raised by the Office of Thrift Supervision in a recent exam.

In considering the application, the Fed received complaints that the lenders have not complied with the Community Reinvestment Act and have discriminated against minorities.

The fed found no evidence of illegal discrimination and noted that both Bank of America FSB and Liberty Bank received satisfactory ratings in recent CRA exams.

But the agency also cited technical violations of fair-lending laws raised in a recent OTS exam, and said they should be remedied.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.