Bank of America will pay a $1.2bn fine after the US Treasury Department found it failed to report more than $5bn in suspicious transactions, including $1bn linked to national security and illicit finance risks.
The Treasury said the bank did not flag transactions potentially tied to Chinese money laundering networks or trade-based laundering connected to the US southwest border. The failures meant the bank missed opportunities to detect and report illegal activity, the department said on Tuesday.
The fine ranks as the third-largest ever imposed by the Treasury. It includes penalties from the Office of the Comptroller of the Currency (OCC) and the Office of Foreign Assets Control (OFAC). The OCC’s $750m portion is its largest penalty to date.
OFAC’s settlement related to 475 apparent violations of sanctions programs covering Russia, Iran, narcotics, and global terrorism. The $11.6m fine reflected the agency’s view that the violations were “non-egregious.”
Treasury Secretary Scott Bessent said: “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 US financial system to significant illicit finance risks.”
The Treasury criticised Bank of America for relying too heavily on outside inquiries from law enforcement and other financial institutions rather than its own internal controls. It said the bank “effectively outsourced to third parties a substantial portion of its proactive detection and reporting obligations.”
Bank of America admitted it “willfully violated” the Bank Secrecy Act by failing to maintain a compliant anti-money laundering program, conduct due diligence on foreign correspondent accounts, and file suspicious activity reports, according to the Treasury.
The announcement came less than 24 hours before the bank was set to release its quarterly earnings on Wednesday. Bank of America said the fine would result in a non-tax-deductible charge of $1.2bn, reducing net income by roughly 17 cents per share.
The bank added in an emailed statement: “Our team is far along with and committed to completing the work required to address the issues raised by our regulators.” It also confirmed it had already allocated significant personnel and resources to remediation efforts, which are reflected in current expenses.
The scale of the unreported suspicious transactions and the involvement of national security concerns underline the challenges US regulators face in policing large financial institutions. The Treasury’s move sends a clear signal about enforcement priorities amid increasing scrutiny of money laundering and sanctions compliance.
According to Joy Online.
