Bank of America faces more than $1.2 billion in money-laundering penalties

The Big Picture

Bank of America will pay more than $1.2 billion in penalties after U.S. Treasury Department agencies found deficiencies in its anti-money-laundering and sanctions compliance programs, according to announcements issued Tuesday.

Treasury described the action as its third-largest penalty ever. The package includes a $1.2 billion assessment by the Financial Crimes Enforcement Network, or FinCEN, with credit for penalties imposed by other regulators. The Office of the Comptroller of the Currency imposed a $750 million civil money penalty, the largest in that agency's history.

What Happened

Treasury said Bank of America admitted it willfully violated the Bank Secrecy Act, failed to maintain an anti-money-laundering program that met legal minimum requirements and failed to file required Suspicious Activity Reports.

The department said the bank did not timely report more than $5 billion in suspicious transactions to FinCEN. More than $1 billion of that activity implicated national-security-related or other priority illicit-finance risks, Treasury said.

Those transactions included activity indicative of possible Chinese money-laundering networks, fraud and potential trade-based money laundering with a substantial nexus to the U.S. southwest border, according to Treasury.

Regulators also said Bank of America relied too heavily on inquiries from law enforcement and referrals from other financial institutions. Treasury said that reliance effectively outsourced a substantial part of the bank's responsibility to proactively detect and report suspicious activity.

Why It Matters

Treasury Secretary Scott Bessent said failures by a bank of Bank of America's size can create risks beyond the institution itself. "When a bank of this size fails to meet its anti-money laundering and sanctions obligations, the consequences extend far beyond its own walls, exposing the entire U.S. financial system to significant illicit finance risks," Bessent said.

The OCC penalty reflects continued concerns about the bank's compliance controls. CNBC reported that the OCC said Bank of America had not corrected deficiencies identified in a 2024 cease-and-desist order, including failures in systems intended to detect and report suspicious activity.

What Each Side Is Saying

Bank of America said, "Financial crime compliance is serious, and we are responsible for getting it right." The bank said it has invested billions of dollars in technology and dedicated thousands of employees to fighting financial crime, and that it is committed to completing required remediation work.

The Office of Foreign Assets Control separately reached an $11.6 million settlement involving 475 apparent violations of multiple sanctions programs. Treasury said the transactions involved sanctions programs targeting Russia, Belarus, Iran, Burma, Somalia, narcotics and global terrorism. The BBC reported that OFAC characterized the apparent violations as non-egregious.

What Happens Next

Treasury said Bank of America must conduct a third-party review of suspicious transactions that went undetected. The bank also must undergo independent reviews of its transaction-monitoring and customer-due-diligence programs.

The announcement came less than a day before Bank of America was scheduled to report third-quarter earnings. The bank told the BBC that its quarterly results would include a non-tax-deductible $1.2 billion charge, reducing net income by about 17 cents per share.