U.S. lawmakers accused the Treasury and Federal Reserve on Thursday of using threats and intimidation to force Bank of America to take over Merrill Lynch, a charge Bank of America Chief Executive Ken Lewis denied.

Republicans accused Federal Reserve Chairman Ben Bernanke and former Treasury Secretary Henry Paulson of putting a gun to the head of Lewis to close the deal.

Both Bernanke and Paulson will be asked to testify at a later date before the House Oversight and Government Reform Committee.

Democratic Representative Elijah Cummings noted Lewis had told his board the Fed and Treasury would remove the board and management of the bank if it did not complete the purchase of Merrill Lynch despite growing losses there.

If that isn't a threat, I don't know what is, Cummings said.

Lewis, the sole witness at the hearing, admitted after repeated questioning that there had been pressure, but sidestepped efforts to characterize the stance of Bernanke and Paulson as improper or an undue threat.

Lewis, who kept his answers brief and smiled and laughed at times during the grilling, said Bernanke and Paulson never asked him to keep information secret that the bank wanted to disclose to shareholders.

I would say they strongly advised and they spoke in strong terms but I thought it was with good intentions, he said, arguing the pressure was not improper.

It was in the context of them thinking it was in the best interests of Bank of America and the financial system.

Bank of America is regulated by the Federal Reserve.

The panel is examining the government's role in the January 1 purchase of Merrill Lynch, and the $20 billion in additional taxpayer bailout money given to Bank of America that month.

Lewis agreed to buy Merrill Lynch last fall in a deal put together with Treasury's assistance as Wall Street and the U.S. economy fell into a deep tailspin. Shareholders of Bank of America and Merrill voted in favor of the companies' merger last December 5.

CLIMATE OF FEAR

Lewis has said it was only later that month that he learned how fast Merrill was deteriorating, and then threatened to pull out of the merger, with officials of the Treasury and the Federal Reserve pushing for completion of the deal.

This transaction took place in a climate of fear and intimidation by government officials, said Republican Representative Jim Jordan of Ohio.

Edolphus Towns, Democratic chairman the U.S. House Oversight and Government Reform Committee, said Bernanke and Paulson would be called to testify about their role.

We will be looking for some answers to puzzling questions, he said.

Did Paulson and Bernanke abuse their authority by ordering Mr. Lewis to go through with the Merrill acquisition, or did Mr. Lewis threaten to back out in order to squeeze more money out of the federal government? he asked.

Lawmakers repeatedly said Lewis must have known much earlier than he claims about the heavy losses at Merrill, which lost $15.84 billion in the fourth quarter of last year.

But Lewis said nobody predicted the meltdown that occurred in the fourth quarter of 2008.

Lewis also insisted the bank's securities lawyers, not him, decided what information about the Merrill deal was important enough to disclose to shareholders.

Asked if the bank's consideration of triggering a clause to pull out of the deal should have been relayed to shareholders, Lewis said: I'd leave that decision to our securities lawyer and our outside counsel.

(Writing by John Whitesides; Additional reporting by Mark Felsenthal; Editing by Tim Dobbyn)

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