BofA Fined $1.2B By US Treasury For Violating Anti-Money Laundering Laws Ahead Of Earnings

Bank of America Corp. Will take a $1.2 billion hit to its bottom line when it reports earnings next Wednesday, after the U.S. Treasury imposed the third‑largest penalty ever on a bank for anti‑money‑laundering (AML) failures. The fine, a combination of a FinCEN assessment, an OCC civil penalty and an OFAC settlement, follows a decade‑long pattern of weak compliance that regulators say risked the integrity of the financial system.

In a statement released Tuesday, the Treasury’s Financial Crimes Enforcement Network said the bank had failed for years to report over $5 billion in suspicious transactions and to fix long‑standing AML problems. The agency’s own assessment was $1.2 billion, the third‑largest ever imposed. Treasury Secretary Scott Bessent added that the action sent a clear signal that even the biggest institutions are not above the law.

Media additions

“Today’s actions send a clear message that even the biggest financial institutions are not above the law,”

Scott Bessent, Treasury Secretary, via CNBC

The OCC, which regulates national banks, announced a $750 million civil penalty. It described the penalty as the largest ever levied by the agency, citing “widespread breakdowns” in Bank of America’s BSA/AML compliance program. The department’s press release highlighted that the bank had not made acceptable progress on deficiencies identified in a cease‑and‑desist order signed in December 2024.

“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,”

Jonathan Gould, Comptroller of the Currency, via OCC press release

OFAC settled with the bank for $11.6 million over 475 sanctions violations. The violations involved blocked foreign institutions and restricted accounts tied to Iran, Russia, Somalia, Burma and other sanctioned regimes, as well as narcotics and terrorism programmes. Treasury said the bank had “willfully violated” the Bank Secrecy Act by failing to maintain a compliant AML program, conduct due diligence on foreign correspondent accounts and file suspicious activity reports.

Bank of America’s own response, released to CNBC, stressed its investment in technology and personnel to address the issues. “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,” the bank said. The spokesperson, Christa Robinson, added that remediation costs were already reflected in the current expense base.

“Financial crime compliance is serious, and we are responsible for getting it right,”

Christa Robinson, Bank of America spokesperson, via CNBC

Market reaction was swift. Shares fell about 2 % in after‑hours trading on the news. The news arrives just 24 hours before the bank is scheduled to release its third‑quarter earnings on Wednesday morning, a timing that could amplify volatility.

In the wake of the Treasury action, the bank will be required to conduct a third‑party review of undetected suspicious transactions and to undergo independent reviews of its transaction‑monitoring and customer‑due‑diligence programmes. These steps, announced by Treasury, are designed to ensure that the bank’s systems are fully restored.

What to watch next:

• Bank of America’s Q3 earnings announcement, scheduled for Wednesday morning, will include the $1.2 billion charge and a detailed discussion of remediation costs.

Bank of America’s case underscores a broader trend in the U.S. Banking sector, where regulators are tightening enforcement to protect national security and the integrity of the financial system. The Treasury and OCC’s joint action illustrates the growing willingness of federal agencies to impose severe penalties when compliance programmes fall short. For investors, the immediate impact is a dent in earnings and a reminder that regulatory risk remains a significant factor in banking valuations.