Bank of America fined $1.2 billion for anti-money laundering violations

Bank of America has agreed to pay more than $1.2 billion to settle federal enforcement actions related to anti-money laundering and sanctions violations. The U.S. Treasury Department announced the penalties on Tuesday, marking the third-largest fine in the department's history. The settlement resolves claims that the nation’s second-largest bank failed to report billions of dollars in suspicious transactions and allowed illicit finance to flow through its accounts.

Breakdown of the Penalties

The total penalty of more than $1.21 billion comprises several components. The Financial Crimes Enforcement Network (FinCEN) imposed a $1.2 billion penalty, which is the third-largest in Treasury history, following fines against Binance in 2023 and TD Bank in 2024. Within this total, the Office of the Comptroller of the Currency (OCC) levied a $750 million civil money penalty. According to the OCC, this is the largest penalty it has ever imposed on a bank.

Separately, the bank reached an $11.6 million settlement with the Office of Foreign Assets Control (OFAC). This settlement covers 475 suspected sanctions breaches involving Russia, Belarus, Iran, Burma, Somalia, narcotics, and global terrorism. The OCC penalty is credited toward the FinCEN total rather than added to it.

Regulatory Findings and Admissions

As part of the settlement, Bank of America admitted it willfully violated the 1970 Bank Secrecy Act. The Treasury Department stated that the bank failed to maintain a compliant anti-money laundering program and did not conduct required due diligence on foreign correspondent accounts. Regulators found that the bank failed to report more than $5 billion in suspicious transactions. Of that amount, over $1 billion involved national security risks, including Chinese money laundering networks, fraud, and trade-based laundering tied to the southwest border.

Treasury Secretary Scott Bessent said in a statement, "Today’s actions send a clear message that even the biggest financial institutions are not above the law." He added, "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."

The OCC noted that the bank had been subject to a cease-and-desist order since December 2024, which required it to fix its compliance program. Comptroller of the Currency Jonathan Gould stated, "The bank's poor response to its BSA deficiencies is unacceptable. The second largest bank's egregious and continued BSA violations warrant the OCC imposing its largest [civil money penalty] ever assessed against a bank."

Bank Response and Financial Impact

Bank of America stated that it has invested billions of dollars in technology and dedicated thousands of employees to combat financial crime. A spokesperson said the bank is "far along" in remediation efforts. "Financial crime compliance is serious, and we are responsible for getting it right," the spokesperson said.

The bank confirmed that the penalties will result in a $1.2 billion non-tax-deductible charge in its third-quarter results, reducing net income by approximately 17 cents per share. Following the announcement, Bank of America’s stock fell more than 2.5% in after-hours trading. The bank is scheduled to report full quarterly results on Wednesday morning.

Why it matters

This settlement highlights the ongoing regulatory scrutiny of major financial institutions regarding anti-money laundering compliance. It serves as a significant warning to the banking sector that regulators are willing to impose historic fines for systemic failures in detecting illicit finance. The case also underscores the complexities of monitoring trillions of dollars in transactions across global networks, particularly involving high-risk jurisdictions and entities. Unlike previous large fines against Binance and TD Bank, this action did not include parallel charges from the Justice Department.

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Sources

• dailycaller.com: Treasury Dept. Hits Major US Bank With Third-Largest Fine In History | The Daily Caller
• cnbc.com: Bank of America fined $1.2 billion over money-laundering violations
• cnn.com: Bank of America fined $1.2 billion by Treasury Department for money laundering and sanctions laws violations | CNN Business
• nbcnews.com: Bank of America to pay $1.21 billion over sanctions violations
• finance.yahoo.com: Bank of America hit with $1.2 billion penalty over money laundering failures

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.