Lynch was previously chief legal officer at Morgan Stanley.
Like many big banks, Bank of America is dealing with multiple legal and regulatory issues now, including challenges to its procedures for foreclosing on homes and new rules that affect everything from debit cards to retail brokerage.
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Lynch, who at the SEC brought cases against Ivan Boesky and Michael Milken, is famous for helping banks restore their reputations after legal setbacks.
Lynch's hire is part of a management shake-up by Chief Executive Brian Moynihan that also gave the bank a new chief financial officer, Bruce Thompson. Thompson, currently chief risk officer, will replace Chuck Noski, who will become vice chairman of the bank.
Bank of America announced a more than 35 percent decline in first quarter earnings on Friday, hurt by losses in its mortgage unit.
(Reporting by Dan Wilchins in New York; editing by Jackie Frank)