Bank of America fined $1.2 billion for sanctions and AML violations

Bank of America was ordered on Tuesday to pay $1.2 billion to the U.S. Treasury Department after the agency determined the bank violated anti-money laundering and sanctions laws. The penalty is the third-largest ever imposed by the Treasury Department.

Breakdown of the Penalty

The total penalty of $1.2 billion includes a $750 million civil money penalty levied by the Office of the Comptroller of the Currency (OCC). According to the Treasury Department, this is the largest-ever fine imposed by the OCC. The agency stated the fine was for Bank of America’s "deficient and ineffective" anti-money laundering compliance program.

Treasury Secretary Scott Bessent addressed the enforcement action in a statement. "Today’s actions send a clear message that even the biggest financial institution are not above the law," Bessent said. 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."

Admissions and Specific Violations

The Treasury Department stated that Bank of America "admits that it willfully violated" the Bank Secrecy Act. The agency noted that the bank "failed to maintain" an anti-money laundering program that met minimum requirements under the law and failed to file mandatory Suspicious Activity Reports.

According to a Treasury Department statement, "Bank of America failed to timely report to FinCEN over $5 billion dollars in suspicious transactions, with over $1 billion of this activity implicating national security-related and other priority illicit finance risks, including suspicious transactions indicative of Chinese Money Laundering Networks, fraud, and potential trade-based money laundering with a substantial nexus to the southwest border."

FinCEN is the Financial Crimes Enforcement Network, tasked with combating money laundering, illicit financial activities, and terrorist financing networks.

Sanctions Settlement

In addition to the anti-money laundering penalties, Bank of America is settling "its potential civil liability for 475 apparent violations of multiple sanctions programs" with the Office of Foreign Assets Control (OFAC). OFAC oversees U.S. sanctions programs.

Treasury said the company "processed millions of dollars in payments in apparent violation of sanctions programs targeting Russia, Belarus, Iran, Burma, Somalia, narcotics, and global terrorism."

Bank Scale and Context

Bank of America is the second-largest bank in the country. It has more than 70 million clients and processes about $4.5 trillion in payments for individual customers annually. The bank also handles $450 trillion in payments for corporate customers, including payrolls, corporate credit cards, and supplier payments.

The announcement was made after markets closed on Tuesday. Bank of America is scheduled to report its third-quarter earnings shortly before 7:00 a.m. ET on Wednesday.

Why it matters

This enforcement action highlights significant regulatory scrutiny on major financial institutions regarding their internal compliance controls. The Treasury Department described the penalties as part of efforts to go after banks that do not meet sanctions and anti-money laundering obligations. The scale of the unreported suspicious transactions, particularly those involving national security risks, underscores the potential systemic exposure when compliance programs fail at large institutions.

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Sources

• nbcnews.com: Bank of America to pay $1.21 billion over sanctions violations
• washingtonexaminer.com: Treasury fines Bank of America $1.2B for violating anti-money laundering laws

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