Treasury Imposes $1.2B Penalty on Bank of America for AML and Sanctions Failures
The U.S. Treasury Department has levied a $1.2 billion fine on Bank of America for willful violations of anti-money laundering and sanctions laws. The penalty, the third-largest in Treasury history, stems from the bank's failure to report over $5 billion in suspicious transactions linked to Chinese networks and the southwest border. Bank of America admitted to these violations and agreed to an additional $11.6 million settlement with the Office of Foreign Assets Control.
Key points
- The $1.2 billion fine is the third-largest in Treasury Department history, behind settlements with Binance and TD Bank.
- Bank of America admitted to willfully violating the 1970 Bank Secrecy Act by failing to mitigate and report national security risks.
- The penalty includes $750 million to the Office of the Comptroller of the Currency, the largest civil penalty ever imposed by that agency.
- An additional $11.6 million settlement was reached with the Office of Foreign Assets Control over sanctions violations involving Iran, Russia, and narcotics.
- Treasury Secretary Scott Bessent stated that the action sends a clear message that large financial institutions are not above the law.
Background
This action follows a 2024 Consent Order from the Office of the Comptroller of the Currency and a FinCEN investigation. The fine is part of a broader regulatory focus on financial crime compliance, following similar large penalties against Binance and TD Bank during the previous administration.
How outlets are covering it
The New York Post and CNN report the core facts of the $1.2 billion fine and the admissions of guilt by Bank of America. The New York Post emphasizes the historical significance of the fine, noting it is the third-largest in Treasury history and the largest ever from the OCC. CNN provides similar details but focuses on the broader implications for the financial sector. Yahoo Finance, while not providing a detailed article, reflects the market impact through Bank of America's stock price decline of 1.14% to $53.96, indicating investor reaction to the news.
Why it matters
The fine underscores the U.S. government's intensified efforts to enforce anti-money laundering and sanctions compliance among major financial institutions. It signals that even the largest banks face significant penalties for failures in detecting and reporting illicit finance, potentially leading to increased scrutiny and investment in compliance technologies across the industry.
What to watch
Bank of America will record a non-tax-deductible charge in its third-quarter earnings. The bank has committed to completing the work required to address the issues raised by regulators, including investments in technology and personnel to combat financial crime.
- Bank of America hit with $1.2B fine for money laundering, sanctions violations New York Post
- Bank of America fined $1.2 billion by Treasury Department for money laundering and sanctions laws violations CNN
- US fines Bank of America US$1.2 billion for alleged money laundering South China Morning Post
- AP Top Extended Financial Headlines at 5:00 p.m. EDT Yahoo Finance
- BofA fined $1.2 billion by US government for failing to police suspicious activity Reuters
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