In brief
Bank of America has been hit with a record $1.2 billion penalty from the U.S. Treasury for shortcomings in its anti‑money‑laundering program. The bank failed to flag more than $5bn in suspicious transactions, including $1bn linked to national‑security risks and alleged Chinese money‑laundering networks. The fine includes a $750m charge from the OCC and an $11.6m settlement with OFAC over 475 sanctions violations. The hefty payment will dent the bank’s third‑quarter earnings, adding a non‑tax‑deductible loss of $1.2bn to its income statement.
Bank of America has been fined $1.2bn (£910m) after the U.S. Treasury Department revealed the bank had failed to detect or report more than $5bn in suspicious activity.
The penalty, the third‑largest ever imposed by the Treasury, covers a $750m fine from the Office of the Comptroller of the Currency and an $11.6m settlement with the Office of Foreign Assets Control over 475 sanctions violations.
Key failures included missing indicators of Chinese money‑laundering networks and trade‑based laundering tied to the U.S. southwest border, the Treasury said. Bank of America also relied too heavily on third‑party inquiries rather than its own internal controls, effectively outsourcing core AML duties.
The bank said it would absorb the cost in its quarterly results, noting the $1.2bn hit would reduce net income by about 17 cents a share. It added that dedicated personnel and resources are already underway to remediate the shortfalls.
Treasury Secretary Scott Bessent warned that a bank of this size failing to meet AML obligations “exposes the entire U.S. financial system to significant illicit finance risks.”
Bank of America acknowledged willfully violating the Bank Secrecy Act by not maintaining a compliant anti‑money‑laundering programme, failing due diligence on foreign correspondent accounts and neglecting to file suspicious activity reports.
The settlement clarifies the bank’s exposure to Russia, Iran, narcotics and terrorism sanctions programmes, all of which were deemed “non‑egregious” by OFAC.
Bank officials have pledged swift action to strengthen monitoring, reporting and compliance functions, saying the incident has highlighted the need for comprehensive safeguards.
