WASHINGTON (Reuters) - The House of Representatives' ethics panel plans to drop allegations against Democratic Representative Maxine Waters following a long probe into whether she improperly aided a bank in which her husband owned shares, the panel's head said on Friday.

Acting House Ethics Committee Chairman Robert Goodlatte, a Republican, said the panel was prepared to accept a recommendation from an outside lawyer hired to examine Waters' conduct, Billy Martin, not to pursue further investigation of her role in the matter.

"We are prepared to accept that recommendation," Goodlatte said in a statement.

At issue were allegations that during the depths of the financial crisis in 2008, Waters may have violated House ethics rules for seeking help from the U.S. Treasury Department for OneUnited Bank of Boston. Her husband owned stock in the bank and once sat on the board.

Waters, a high-ranking Democrat from Los Angeles on the House Financial Services Committee, maintained that she had called then-Treasury Secretary Henry Paulson to seek help for minority owned banks in general. She said she dropped her involvement upon learning that OneUnited sought assistance from the Troubled Asset Relief Program, which was set up in 2008 to shore up banks during the financial crisis.

The bank eventually received $12 million in federal bailout capital.

Goodlatte said the panel was still considering whether to admonish Waters' chief of staff and grandson, Mikael Moore, over allegations that he used his office for personal gain, dispensed personal favors and brought dishonor to the House by continuing to work on OneUnited's behalf. The move is short of a formal reprimand under House rules.

The committee held a public hearing on the matter on Friday and could decide on further action later in the day.

(Reporting By Donna Smith; Writing by David Lawder; Editing by Fred Barbash and Vicki Allen)