Bank of America Faces $1.2 Billion Penalty for Compliance Failures

Bank of America was ordered to pay more than $1.2 billion in federal penalties after the U.S. Treasury Department said Tuesday that the bank violated anti-money laundering and sanctions laws by failing to report suspicious transactions and maintain required compliance systems.

The Treasury Department said the bank failed to timely report more than $5 billion in suspicious transactions, including more than $1 billion involving national security and other high-priority risks such as Chinese money-laundering networks, fraud and possible trade-based money laundering.

According to the Treasury Department, the penalties include a $750 million civil money penalty from the Office of the Comptroller of the Currency, the largest penalty ever issued by the OCC. The total action is the third-largest penalty in Treasury history.

The Treasury Department said Bank of America admitted it willfully violated Bank Secrecy Act requirements by failing to maintain an adequate anti-money laundering program, perform required due diligence on foreign correspondent accounts and file suspicious activity reports.

"Today's actions send a clear message that even the biggest financial institutions are not above the law," said Scott Bessent, Treasury Secretary.

The bank also agreed to resolve potential civil liability for 475 apparent sanctions violations involving payments processed in connection with programs targeting Russia, Belarus, Iran, Burma, Somalia, narcotics and global terrorism, according to the Treasury Department.

Bank of America said it has invested billions of dollars in compliance technology and dedicated thousands of employees to financial crime prevention efforts.

"Financial crime compliance is serious, and we are responsible for getting it right," said Christa Robinson, Bank of America spokesperson.

Robinson said the bank is continuing remediation work required by regulators and will keep supporting law enforcement investigations while filing hundreds of thousands of suspicious activity reports each year.

"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," said Bank of America.

"We will continue to support federal and local law enforcement across thousands of investigations and report hundreds of thousands of suspicious activity reports each year," said Bank of America.

The OCC said the bank failed to correct previously identified deficiencies after a 2024 cease-and-desist order. Regulators said problems included weaknesses in transaction monitoring, customer due diligence and systems used to identify suspicious activity.

"Despite its obligation to the American people as a national-chartered, global systemically important bank, the bank's BSA/AML compliance program continues to reflect widespread breakdowns in internal controls, which threatens U.S. national and economic security," said Jonathan Gould, Comptroller of the Currency.

Gould said the bank's continued compliance failures justified the OCC's record penalty and warned that banks without effective anti-money laundering programs could face significant regulatory action.

"The bank's poor response to its BSA deficiencies is unacceptable. The second largest bank's egregious and continued BSA violations warrant the OCC imposing its largest civil money penalty ever assessed against a bank," said Jonathan Gould, Comptroller of the Currency.

Bank of America said the penalties will create a $1.2 billion non-tax-deductible charge in its third-quarter results, reducing net income by about 17 cents per share. The bank was scheduled to report its quarterly earnings shortly after the regulatory action.