The US Treasury Department has imposed more than $1.2 billion in penalties against Bank of America for violating anti-money laundering and sanctions laws, the department announced on Tuesday.
The fine is the third-largest penalty in the Treasury's history. Treasury Secretary Scott Bessent said: "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 US financial system to significant illicit finance risks."
He added that the actions "send a clear message that even the biggest financial institutions are not above the law."
The Financial Crimes Enforcement Network (FinCEN) assessed a $1.2 billion penalty after finding that Bank of America failed to timely report over $5 billion in suspicious transactions to the government. Of that amount, $1 billion posed national security and illicit finance risks, the Treasury said.
The failures included not flagging transactions that possibly involved Chinese money laundering networks or trade-based laundering "with a substantial nexus to the southwest border," according to the Treasury.
Regulators found that the bank overly relied on inquiries from outside parties, such as law enforcement and other financial institutions, rather than its own internal controls. This meant the bank "effectively outsourced to third parties a substantial portion of its proactive detection and reporting obligations," the Treasury said.
As part of the settlement, Bank of America admitted that it "willfully violated" the Bank Secrecy Act by failing to maintain a compliant anti-money laundering programme, conduct required due diligence on foreign correspondent accounts, and file suspicious activity reports.
The $1.2 billion total included penalties from multiple regulators. The Office of the Comptroller of the Currency (OCC) assessed a $750 million fine — the largest in its history — for the bank's deficient anti-money laundering compliance programme. FinCEN's $1.2 billion penalty includes credit for the OCC fine.
The Office of Foreign Assets Control (OFAC) separately announced an $11.6 million settlement agreement covering 475 apparent violations of multiple sanctions programmes, including those related to Russia, Iran, narcotics, and global terrorism. OFAC said the apparent violations were determined to be "non-egregious."
The settlement includes compliance commitments regarding training, testing, audit, and future cooperation with OFAC.
The announcement came less than 24 hours before Bank of America was due to report its quarterly earnings. The bank said its third-quarter results would include a non-tax-deductible charge of $1.2 billion, impacting net income by approximately 17 cents per share.
In response, Bank of America said: "Financial crime compliance is serious, and we are responsible for getting it right. We have invested billions of dollars in technology and dedicated thousands of employees to combat financial crime, and our team is far along with and committed to completing the work required to address the issues raised by our regulators."
