Bank of America Hit With $1.21 Billion in Penalties Over Money Laundering Failures
Treasury says the nation's second-largest bank missed suspicious activity for years, including transactions tied to Chinese laundering networks and the southwest border.
When regulators say a big bank knew about a problem for years and did not fix it, that is not a paperwork error. That is the allegation against Bank of America.
The Treasury Department announced approximately $1.21 billion in penalties against the bank over longstanding anti-money laundering failures and U.S. sanctions violations, according to Fox Business. The Financial Crimes Enforcement Network (FinCEN) assessed a $1.2 billion penalty, which includes credit for a $750 million civil penalty imposed by the Office of the Comptroller of the Currency (OCC). A separate $11.6 million settlement with the Office of Foreign Assets Control brings the combined total to about $1.21 billion. Fox reports it is the largest penalty in OCC history and the third-largest in FinCEN history.
What did regulators find? According to Treasury, the bank failed to report more than $5 billion in suspicious transactions on time. That includes more than $1 billion in activity involving national security risks, such as Chinese money laundering networks, fraud and potential trade-based money laundering connected to the southwest border. In its FinCEN settlement, the bank admitted to willfully violating the Bank Secrecy Act by failing to maintain an adequate anti-money laundering program, conduct required due diligence on certain foreign bank accounts and file suspicious activity reports.
The OCC found the bank's transaction monitoring system failed to properly monitor trillions of dollars in transactions. Regulators also said the bank knew for years it was failing to refer potentially suspicious transactions for investigation but did not correct the problems. The OCC first identified significant deficiencies in 2023 and issued a cease-and-desist order in December 2024.
Bank of America told Fox Business the penalties will produce a $1.2 billion non-tax-deductible charge in its third-quarter results, cutting net income by about 17 cents per share. A spokesperson acknowledged the violations and said the company has invested billions of dollars in technology and assigned thousands of employees to fighting financial crime. The bank said it remains committed to completing the required improvements.
Americans are often told that the largest financial institutions are too sophisticated to miss what regulators say they missed. This week's numbers suggest otherwise.