The US Treasury Department on Tuesday announced more than $1.2 billion in penalties against Bank of America, accusing the country's second-largest bank of violating anti-money-laundering and sanctions laws — the third-largest enforcement action in the department's history.
The Treasury said the penalty stemmed from the bank's failure to timely report more than $5 billion in suspicious transactions, including more than $1 billion involving national security and other priority illicit-finance risks. The department alleged some of the transactions were indicative of Chinese money laundering networks, fraud and potential trade-based money laundering.
"When a bank of this size fails to meet its anti-money laundering and sanctions obligations, the consequences extend far beyond its own walls, exposing the entire U.S. financial system to significant illicit finance risks," Treasury Secretary Scott Bessent said in a statement, adding that the action sends a clear message that even the biggest financial institutions are not above the law.
What the bank said
Bank of America said it was working with regulators to reach penalty resolutions, and that it had invested billions of dollars in technology and dedicated thousands of employees to combat financial crime. The bank said its third-quarter results, due Wednesday, would include a non-tax-deductible charge of $1.2 billion impacting net income by approximately 17 cents per share.
The fine is the third-largest ever imposed by the Treasury Department's Financial Crimes Enforcement Network, following a record $3.4 billion against Binance in 2023 and $1.3 billion against TD Bank in 2024. Of the total, $750 million will go to the Office of the Comptroller of the Currency as a civil penalty, the largest OCC penalty in history.
The Treasury said Bank of America admitted it willfully failed to have proper safeguards in place and to report suspicious activity. CNN reported that the bank's sanctions-screening filter had a design flaw that kept it from appropriately prioritising potentially prohibited transactions, undermining US sanctions programmes including Iran and counter-narcotics efforts.
The bank's stock fell more than 2.5% in after-hours trading after the fine was announced.
Sources: Bank of America fined $1.2 billion by Treasury Department (CNN)
The Treasury said the penalty stemmed from the bank's failure to timely report more than $5 billion in suspicious transactions, including more than $1 billion involving national security and other priority illicit-finance risks. The department alleged some of the transactions were indicative of Chinese money laundering networks, fraud and potential trade-based money laundering.
"When a bank of this size fails to meet its anti-money laundering and sanctions obligations, the consequences extend far beyond its own walls, exposing the entire U.S. financial system to significant illicit finance risks," Treasury Secretary Scott Bessent said in a statement, adding that the action sends a clear message that even the biggest financial institutions are not above the law.
What the bank said
Bank of America said it was working with regulators to reach penalty resolutions, and that it had invested billions of dollars in technology and dedicated thousands of employees to combat financial crime. The bank said its third-quarter results, due Wednesday, would include a non-tax-deductible charge of $1.2 billion impacting net income by approximately 17 cents per share.
The fine is the third-largest ever imposed by the Treasury Department's Financial Crimes Enforcement Network, following a record $3.4 billion against Binance in 2023 and $1.3 billion against TD Bank in 2024. Of the total, $750 million will go to the Office of the Comptroller of the Currency as a civil penalty, the largest OCC penalty in history.
The Treasury said Bank of America admitted it willfully failed to have proper safeguards in place and to report suspicious activity. CNN reported that the bank's sanctions-screening filter had a design flaw that kept it from appropriately prioritising potentially prohibited transactions, undermining US sanctions programmes including Iran and counter-narcotics efforts.
The bank's stock fell more than 2.5% in after-hours trading after the fine was announced.
Sources: Bank of America fined $1.2 billion by Treasury Department (CNN)
