We propose a new adaptive feedback cancellation (AFC) system in hearing aids (HAs) based on a well-posed optimization criterion that jointly considers both decorrelation of the signals and sparsity of the underlying channel. We show that the least squares criterion on subband errors regularized by a p-norm-like diversity measure can be used to simultaneously decorrelate the speech signals and exploit sparsity of the acoustic feedback path impulse response. Compared with traditional subband adaptive filters that are not appropriate for incorporating sparsity due to shorter sub-filters, our proposed framework is suitable for promoting sparse characteristics, as the update rule utilizing subband information actually operates in the fullband. Simulation results show that the normalized misalignment, added stable gain, and other objective metrics of the AFC are significantly improved by choosing a proper sparsity promoting factor and a suitable number of subbands. More importantly, the results indicate that the benefits of subband decomposition and sparsity promoting are complementary and additive for AFC in HAs.