The US Treasury Department announced a $1.2bn penalty against Bank of America for failing to adequately detect potential money laundering and illicit financial activity. The fine represents the third-largest the Treasury has ever imposed. According to Treasury officials, the bank did not report more than $5bn in suspicious transactions to the government, with approximately $1bn of those unreported activities carrying national security and illicit finance concerns.
The Treasury identified specific compliance failures, including the bank’s inability to flag transactions potentially connected to Chinese money laundering networks and trade-based money laundering schemes with links to the southwest border. Bank of America stated it was committed to addressing the issues raised by regulators and remedying the deficiencies identified in the investigation.
The Treasury noted that Bank of America overly depended on external inquiries from law enforcement and other financial institutions rather than developing robust internal monitoring systems. This approach effectively transferred substantial portions of the bank’s required proactive detection and reporting responsibilities to third parties, regulators said. As part of the settlement, Bank of America acknowledged willfully violating the Bank Secrecy Act by failing to maintain a compliant anti-money laundering programme, perform required due diligence on foreign correspondent accounts, and file appropriate suspicious activity reports.
The penalty package consisted of fines from multiple regulatory bodies. The Office of the Comptroller of the Currency imposed a $750m fine, marking its largest penalty ever. The Office of Foreign Assets Control assessed an $11.6m settlement related to 475 apparent violations of sanctions programmes involving Russia, Iran, narcotics, and terrorism financing, designating these violations as non-egregious.
Bank of America disclosed that the $1.2bn fine would create a non-tax-deductible charge affecting quarterly earnings. Treasury Secretary Scott Bessent emphasized that lapses of this magnitude in a major financial institution create consequences extending throughout the broader US financial system, exposing it to significant illicit finance risks.
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