Bank of America hit with $1.2bn fine for money laundering failings
US Treasury Department fines Bank of America $1.2 billion for failing to detect money laundering and report suspicious transactions.
Stock photo for illustration only, not from the actual event
- Bank of America fined $1.2 billion by the US Treasury Department.
- The banking giant failed to report over $5 billion in suspicious activity.
- Admitted to willfully violating the Bank Secrecy Act and lacking proper controls.
- Penalty includes a record $750 million fine from the Office of the Comptroller of the Currency.
Bank of America is facing a massive regulatory penalty after being fined $1.2 billion by the US Treasury Department for failing to detect potential money laundering and other illegal financial activities. The announcement was officially made public on Tuesday.
According to the Treasury, the banking giant neglected to report more than $5 billion in suspicious activity to the government. Out of that total, $1 billion posed direct risks to national security and illicit finance. These oversight failures included missing transactions potentially tied to Chinese money laundering networks or trade-based laundering linked closely to the southwest border region.
Stock photo for illustration only, not from the actual event
In announcing the penalty—the third-largest ever imposed by the department—Treasury Secretary Scott Bessent stated that 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. The department further noted that the bank relied too heavily on inquiries from outside parties, such as law enforcement and other financial institutions, instead of maintaining proactive internal controls.
"Our team is far along with and committed to completing the work required to address the issues raised by our regulators,"
Bank of America
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 program, conduct required due diligence on foreign correspondent accounts, and file suspicious activity reports. The $1.2 billion fine incorporates penalties from the Office of the Comptroller of the Currency, which levied a record $750 million fine, alongside a settlement with the Office of Foreign Assets Control tied to 475 apparent sanctions violations involving Russia, Iran, narcotics, and global terrorism.
Context and Analysis: This major regulatory enforcement action highlights the increasingly aggressive stance US authorities are taking against compliance failures in major financial institutions. For Bank of America, the immediate impact includes a non-tax-deductible third-quarter charge impacting net income by approximately 17 cents per share. More broadly, this case serves as a stark warning to global banking giants that heavy investments in internal compliance technology and rigorous monitoring systems are now mandatory to avoid catastrophic regulatory and financial penalties.
The announcement arrived less than 24 hours before Bank of America was scheduled to release its quarterly earnings report on Wednesday morning. In an emailed statement, the bank noted that its third-quarter results will reflect the $1.2 billion charge and emphasized that substantial personnel and resources have already been dedicated to ongoing remediation efforts.
Source: BBC Business
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