WASHINGTON — The U.S. Treasury Department said Tuesday that it's imposing $1.2 billion in fines on Bank of America for supposedly violating anti-money laundering and sanctions laws.
The fines on America's second-biggest bank amount to the third-largest in the department's history. The Treasury Department said the fine is due to the bank's failure to report over $5 billion in suspicious activity to the government, including $1 billion in activity that posed national security-related and other priority illicit finance risks.
"Financial institutions are on the front lines of protecting our economic and national security." Treasury Secretary Scott Bessent said in a statement. "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. Today's actions send a clear message that even the biggest financial institutions are not above the law."
Treasury said the bank "prioritized its revenues" in building compliance programs, and overly relied on inquiries from outside parties like law enforcement and other financial institutions instead of its own internal controls.
Treasury said Bank of America also reached an $11.6 million settlement with the department's Office of Foreign Assets Control over "apparent violations of numerous sanctions programs, including on Iran, Russia, narcotics, and global terrorism."
In a statement released alongside the announcement, Treasury said its Financial Crimes Enforcement Network assessed the $1.2 billion penalty for Bank of America's "failure to mitigate and report priority national security risks, including Chinese Money Laundering Networks and illicit finance along the southwest border."
As part of the fine, the Office of the Comptroller of the Currency levied a $750 million civil penalty against the lender, the largest ever for the regulator, citing failures to address shortcomings in its anti-money laundering programs that were identified as part of a 2024 cease-and-desist order from the watchdog.
The OCC said the bank's compliance program was "deficient and ineffective," and its transaction monitoring system caused the bank to delay in filing suspicious activity reports on billions of dollars of transactions.
Treasury said that Bank of America "admits that it willfully violated" the 1970 Bank Secrecy Act, which requires banks to help the government detect and prevent money laundering.
"Financial crime compliance is serious, and we are responsible for getting it right," Bank of America said in a statement. "We worked with regulators to reach these penalty resolutions stemming from violations cited in the previously reported 2024 (Comptroller of the Currency) Consent Order and FinCEN's investigation.
"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 added that the bank's third-quarter results due for release on Wednesday will include a non-tax-deductible charge of $1.2 billion, which will reduce quarterly net income by approximately 17 cents a share. Shares were down 1.8% in after-hours trading.
As a result of the fine, Treasury said that Bank of America will work with a third party to report any further transactions to FinCEN that had gone undetected. They will need to have various security programs reviewed as well, with a focus on addressing risks related to the Southwest border, Iran and Russia.
The latest action is the third-largest penalty ever issued by the Treasury Department, behind a roughly $4 billion settlement in 2023 with Binance, the world's largest cryptocurrency exchange, and an approximately $3 billion settlement with Canada-based TD Bank the following year. Both those historic actions happened as part of the Biden administration's focus on anti-money laundering and efforts to promote compliance with the then-emerging virtual currency industry.
Months later, Binance founder and CEO Changpeng Zhao was sentenced to four months in prison over charges that he looking the other way as criminals used his platform to move money connected to child sex abuse, drug trafficking and terrorism.
The fine comes days after American Express was also hit with a $350 million penalty for similar anti-money laundering shortcomings.
Information for this article was contributed by Paul Wiseman, Farnoush Amiri and Alex Veiga of The Associated Press and by Pete Schroeder, Ismail Shakil and Saeed Azhar of Reuters.
