A record fine from the bank regulator
Bank of America was ordered to pay $1.21 billion to the Treasury Department, which said the bank violated anti-money laundering and sanctions laws. The penalty is the third largest in Treasury's history. Of the total, $750 million goes to the Office of the Comptroller of the Currency, the largest fine that agency has ever levied.
The Treasury said the bank admitted it willfully violated the Bank Secrecy Act and failed to maintain an anti-money laundering programme that met minimum legal requirements. It also admitted failing to file mandatory Suspicious Activity Reports.
Unreported transactions and sanctioned payments
According to Treasury, the bank failed to report in time more than $5 billion in suspicious transactions. More than $1 billion of that activity touched national security and other priority illicit finance risks, including transactions indicative of Chinese money laundering networks, fraud and possible trade-based money laundering linked to the southwest border.
Bank of America also settled potential civil liability for 475 apparent violations of multiple sanctions programmes with the Office of Foreign Assets Control. Treasury said the bank processed millions of dollars in payments that appeared to violate sanctions targeting Russia, Belarus, Iran, Burma, Somalia, narcotics and global terrorism.
The government's argument
Treasury Secretary Scott Bessent said the action sends a clear message that even the largest financial institutions are not above the law. He added that when a bank of this size misses its anti-money laundering and sanctions obligations, the consequences reach beyond its own walls and expose the wider US financial system to illicit finance risk.
Bank of America said financial crime compliance is serious and that it is responsible for getting it right. The bank said it has invested billions of dollars in technology and assigned thousands of employees to the work, and that it reports hundreds of thousands of suspicious activity reports a year.
The bank is the second largest in the country, with more than 70 million clients and about $4.5 trillion in annual payments for individual customers. It handles a further $450 trillion in payments for corporate clients, including payrolls, corporate cards and supplier payments. The penalty was announced a day before the bank reports third-quarter earnings.