Fed OKs Bank of America's $3.3 billion U.S. Trust buy

WASHINGTON (Reuters) - The U.S. Federal Reserve Board said on Tuesday it approved Bank of America's (BAC.N) proposed $3.3 billion purchase of U.S. Trust Corp. from discount brokerage giant Charles Schwab Corp. (SCHW.O).

In an approval order, the Fed said the proposed transaction would add $11.1 billion in banking assets to Bank of America, leaving the Charlotte, North Carolina, giant's total assets at around $1.5 trillion.

The deal, announced in November 2006, was aimed at vaulting Bank of America to the top spot in the private banking business, boosting its assets under management to $261 billion. It also gives it a 153-year-old brand name in U.S. Trust, which is known for handling money of aristocratic American families.

Schwab, which bought U.S. Trust in May 2000 for $2.9 billion, opted to sell the unit to focus on low-cost services to ordinary investors.

The Fed said the deal was consistent with the Bank Holding Company Act and did not increase Bank of America's market share in any given depository market enough to cause any adverse effects on competition.