Bank of America hit with $1.2B in penalties over money laundering compliance failures
Federal regulators hit Bank of America with historic penalties over years of anti-money laundering failures
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The Treasury Department announced approximately $1.21 billion in penalties against Bank of America over longstanding anti-money laundering failures and U.S. sanctions violations.
Regulators found the bank failed to adequately investigate trillions of dollars in potentially suspicious transactions despite knowing about significant compliance deficiencies.
The action includes the largest penalty in the history of the Office of the Comptroller of the Currency (OCC) and the third-largest in the history of the Financial Crimes Enforcement Network (FinCEN).
FinCEN assessed a $1.2 billion penalty against the nation's second-largest bank, which includes credit for a $750 million civil penalty imposed by the OCC. A separate $11.6 million settlement with the Office of Foreign Assets Control (OFAC) brings the combined penalties to approximately $1.21 billion.
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Bank of America said in a statement shared with FOX Business that the penalties will result in a $1.2 billion non-tax-deductible charge in its third-quarter financial results, reducing net income by approximately 17 cents per share.
A Bank of America spokesperson acknowledged the violations in a statement to Fox Business, saying the company has invested billions of dollars in technology and dedicated thousands of employees to combating financial crime.
The bank said it worked with regulators to resolve the penalties and has made substantial progress addressing the identified deficiencies.
The company also said it remains committed to completing the required improvements and will continue assisting federal and local law enforcement with financial crime investigations.
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According to Treasury, Bank of America failed to report more than $5 billion in suspicious transactions on time, including 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.
As part of its settlement with FinCEN, 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 that the bank's transaction monitoring system failed to properly monitor trillions of dollars in transactions, resulting in large numbers of late suspicious activity reports involving billions of dollars. Many of those transactions showed indicators of potential money laundering.
Regulators also found that the bank knew for years it was failing to refer potentially suspicious transactions for investigation but did not correct the problems.
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| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| BAC | BANK OF AMERICA CORP. | 53.94 | -0.62 | -1.14% |
The OCC first identified significant deficiencies in 2023 and issued a cease-and-desist order in December 2024 requiring the bank to strengthen its anti-money laundering program.
However, regulators found the bank continued to experience widespread breakdowns in its internal controls, including gaps that allowed potential trade-based money laundering transactions to go undetected.
Comptroller of the Currency Jonathan V. Gould criticized the bank for failing to address the problems despite repeated warnings.
The separate OFAC settlement involved 475 apparent violations of U.S. sanctions programs targeting countries including Iran, Russia, Belarus, Burma and Somalia, as well as narcotics trafficking and global terrorism.
The violations included processing payments through sanctioned banks, allowing certain sanctioned individuals to conduct transactions and failing to promptly update federal sanctions watchlists.
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As part of the enforcement action, Bank of America must work with an independent third party to review previously undetected suspicious transactions and undergo additional reviews of its anti-money laundering controls.
The bank also agreed to additional sanctions compliance commitments involving employee training, testing, audits and cooperation with federal regulators.