Bank of America has received a $1.2 billion penalty from the US Treasury Department for deficiencies in its anti-money laundering compliance and reporting obligations. The fine represents the third-largest penalty the department has ever imposed.
According to Treasury officials, the bank failed to report more than $5 billion in suspicious activity to government authorities. Approximately $1 billion of the unreported transactions involved activity with national security implications and illicit finance risks. The unreported suspicious activity included transactions potentially connected to Chinese money laundering networks and trade-based laundering operations with connections to the southwest border region.
The Treasury Department determined that Bank of America relied excessively on inquiries initiated by external parties such as law enforcement agencies and other financial institutions rather than developing robust internal detection systems. This approach resulted in the bank outsourcing significant portions of its proactive detection and reporting obligations to third parties. As part of the settlement agreement, the bank acknowledged willfully violating the Bank Secrecy Act through failures to maintain compliant anti-money laundering programs, conduct appropriate due diligence on foreign correspondent accounts, and file required suspicious activity reports.
The total penalty consisted of separate enforcement actions from multiple regulatory agencies. The Office of the Comptroller of the Currency imposed $750 million in fines, marking its largest penalty to date. The Office of Foreign Assets Control assessed $11.6 million in penalties related to 475 apparent violations of various sanctions programs covering Russia, Iran, narcotics trafficking, and global terrorism designations. OFAC characterized these violations as non-egregious in nature.
Bank of America stated it had already initiated extensive remediation efforts and would continue addressing regulatory concerns. The bank disclosed that its quarterly earnings announcement would reflect the $1.2 billion charge as a non-tax-deductible expense affecting per-share earnings. Treasury Secretary Scott Bessent emphasized that compliance failures at large financial institutions expose the entire US financial system to substantial illicit finance risks.
Article Attribution | Read More at Article Source
Article summary produced by Claude AI