Bank of America fined $1.2bn by US for money laundering failings

United States financial regulators have penalized Bank of America more than $1.21bn across multiple enforcement actions targeting widespread violations of federal sanctions and anti-money laundering statutes. As detailed in reporting from Inquirer and Al Jazeera, the punitive package represents the third-largest penalty ever recorded by the US Department of the Treasury.

The enforcement actions involve several regulatory bodies. According to BBC coverage, the Financial Crimes Enforcement Network (FinCEN) assessed a $1.2bn penalty after finding that the institution failed to counter and disclose priority national security risks, explicitly citing illicit capital flows along the southwest border and Chinese money laundering networks. In parallel actions, the Office of the Comptroller of the Currency (OCC) imposed a $750m civil money penalty over an ineffective and deficient Bank Secrecy Act and anti-money laundering compliance programme, marking the largest fine ever imposed by that federal agency according to The National. Meanwhile, the Office of Foreign Assets Control (OFAC) concluded an $11.6m settlement resolving apparent infractions across several sanctions regimes.

Media additions

Treasury Secretary Scott Bessent noted that when a bank of this size fails to meet its obligations, the consequences extend far beyond its own walls, exposing the entire US financial system to significant illicit finance risks. Bessent added that the actions send a clear message that even the biggest financial institutions are not above the law. Under the terms established with FinCEN, Bank of America conceded that it willfully violated the Bank Secrecy Act.

The lender admitted non-compliance across three core mandates: maintaining an anti-money laundering programme that complied with statutory minimums, conducting due diligence regarding correspondent accounts held by foreign financial institutions, and filing suspicious activity reports. FinCEN uncovered systemic deficiencies in how the institution handled customer due diligence alongside its protocols for detecting and disclosing suspicious activity. During this timeframe, the bank prioritized its revenues and minimized the impact on its required compliance resources, omitting to submit timely reports for more than $5bn in suspicious transactions.

Over $1bn of these untracked funds involved national security matters and critical illicit Finance threats, encompassing fraud patterns, ties to Chinese money laundering networks, and suspected trade-based money laundering connected to the southwest border. The Treasury noted that the bank overly relied on inquiries from outside parties like law enforcement and other financial institutions instead of its own internal controls, effectively outsourcing a substantial portion of its proactive detection and reporting obligations.

The timing of the announcement—arriving less than a day before the bank's scheduled earnings release—sent ripples through the market. Bank of America stated that its third-quarter results will include a non-tax-deductible charge of $1.2 billion impacting net income by approximately 17 cents per share.

In its official response, Bank of America maintained that financial compliance is serious and that it is responsible for getting it right. A spokesperson noted that the institution worked with regulators to reach the penalty resolutions stemming from violations cited in a previously reported 2024 OCC Consent Order and FinCEN investigation. The bank asserted that it has invested billions of dollars in technology and dedicated thousands of employees to combat financial crime, emphasizing that its team is far along with and committed to completing the work required to address the issues raised by regulators.

Under the newly issued Consent Order, the bank is obliged to hire an external firm to execute a lookback review to identify and lodge notifications with FinCEN for all suspicious transfers missed during the breakdown. Bank of America must also submit to third-party audits evaluating its customer due diligence, foreign correspondent account due diligence, suspicious activity monitoring systems, and the underlying data governance framework supporting its anti-money laundering infrastructure.