Bank of America has been mandated to pay a hefty penalty of $1.2 billion to the U.S. Treasury Department after being found in violation of anti-money laundering and sanctions laws. This fine stands as the third-largest in the history of the Treasury Department.
Of this total, the bank is required to pay $750 million to the Office of the Comptroller of the Currency (OCC), marking the largest fine ever imposed by this regulatory body.
“Today’s actions send a clear message that even the biggest financial institutions are not above the law,” stated Treasury Secretary Scott Bessent, underlining the importance of compliance among financial entities.
As the second-largest bank in the United States, Bank of America serves more than 70 million clients and processes approximately $4.5 trillion in payments annually for individual consumers. For corporate clients, the bank manages payments totaling $450 trillion, encompassing payrolls, corporate credit card transactions, and supplier payments.
The Treasury Department highlighted that Bank of America “admits that it willfully violated” regulations stipulated in the Bank Secrecy Act. The bank also acknowledged failing to maintain an adequate anti-money laundering program and neglecting to file required Suspicious Activity Reports (SARs).
According to the Treasury Department, Bank of America did not report timely over $5 billion in suspicious transactions to the Financial Crimes Enforcement Network (FinCEN). Among these, transactions of over $1 billion raised flags related to national security concerns, involving activities associated with Chinese money laundering networks, fraud, and potential trade-based money laundering linked to the U.S. southwestern border.
FinCEN is crucial in combating money laundering and illicit financial activities globally. In response to these findings, a Bank of America spokesperson affirmed the institution’s commitment to addressing financial crime. “We have invested billions of dollars in technology and dedicated thousands of employees to combat financial crime, and our team is far along with and committed to completing the work required to address the issues raised by our regulators,” the spokesperson stated.
Besides the violations associated with FinCEN, the Treasury Department noted that Bank of America has settled “its potential civil liability for 475 apparent violations of multiple sanctions programs” with the Office of Foreign Assets Control (OFAC). This includes the processing of millions of dollars in payments that seemingly violated sanctions aimed at Russia, Belarus, Iran, Burma, Somalia, narcotics, and terrorist financing.
“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,” Bessent highlighted, emphasizing the broader implications of such regulatory failures.
Bank of America is set to report its third-quarter earnings shortly before 7:00 a.m. ET on Wednesday, raising further questions regarding the financial impact of these regulatory penalties on its operations.
