Federal regulators imposed more than $1.21 billion in penalties against Bank of America for widespread failures to detect and report suspicious financial transactions, including activity linked to Chinese money laundering networks and national security threats.
By yourNEWS Media Newsroom
The U.S. Treasury Department announced more than $1.21 billion in penalties against Bank of America on Tuesday, October 13, accusing the nation’s second-largest bank of widespread failures to comply with federal anti-money laundering requirements and sanctions laws.
The enforcement actions represent the third-largest financial penalty in Treasury Department history and include the largest civil fine ever assessed by the Office of the Comptroller of the Currency.
According to the Treasury Department’s official announcement, Bank of America failed to properly identify, investigate and report billions of dollars in suspicious transactions, including financial activity associated with Chinese money laundering networks and illicit operations near the U.S.-Mexico border.
Treasury Secretary Scott Bessent said the bank’s failures created risks extending throughout the American financial system.
“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,” Bessent said.
“Today’s actions send a clear message that even the biggest financial institutions are not above the law.”
The Treasury Department’s Financial Crimes Enforcement Network, known as FinCEN, assessed a $1.2 billion civil penalty after determining that Bank of America failed to maintain an adequate anti-money laundering compliance program and neglected required reporting obligations.
Federal investigators identified more than $5 billion in suspicious transactions that were not properly reported, including approximately $1 billion involving national security concerns and other priority financial crime risks.
As part of the settlement, Bank of America admitted that it willfully violated the Bank Secrecy Act, the federal law requiring financial institutions to maintain safeguards against money laundering and report certain suspicious transactions.
The Office of the Comptroller of the Currency separately assessed a $750 million penalty, the largest in the agency’s history.
The $750 million assessment is credited toward FinCEN’s $1.2 billion penalty rather than added to it, preventing the two agencies from collecting separate payments for the same portion of the enforcement action.
Regulators said the bank repeatedly failed to investigate potentially suspicious transactions despite warnings about weaknesses in its compliance systems.
The OCC also cited deficiencies in employee training, internal auditing and the bank’s ability to identify transactions potentially involving trade-based money laundering.
According to regulators, Bank of America continued experiencing significant compliance problems even after agreeing to a December 2024 enforcement order requiring improvements.
In addition to the anti-money laundering penalties, the Treasury Department’s Office of Foreign Assets Control announced an $11.6 million settlement involving apparent violations of U.S. economic sanctions.
Those violations involved restrictions targeting Iran, Russia, narcotics trafficking networks and organizations associated with global terrorism.
Federal officials said the sanctions violations demonstrated additional weaknesses in the bank’s transaction screening and compliance oversight.
Under the agreements, Bank of America must strengthen its financial crime detection systems, improve employee training and conduct additional reviews of previously unreported suspicious activity.
The bank will also be required to engage independent outside specialists to assess its compliance practices and identify transactions requiring further investigation.
Bank of America acknowledged the regulatory findings while emphasizing that it has already invested substantial resources in improving its financial crime prevention systems.
The company said it remains committed to satisfying its regulatory obligations and strengthening the effectiveness of its compliance operations.
The penalties are expected to reduce the bank’s third-quarter earnings by approximately $1.2 billion, equivalent to about 17 cents per share, according to Reuters reporting on the settlement.
The latest enforcement action follows other major federal settlements involving financial institutions accused of failing to prevent money laundering and illicit transactions.
In 2023, cryptocurrency exchange Binance agreed to pay approximately $4 billion to resolve federal allegations involving violations of anti-money laundering laws and sanctions requirements.
The following year, TD Bank reached an approximately $3 billion settlement after acknowledging widespread deficiencies in its anti-money laundering systems.
Those cases, along with the Bank of America enforcement action, rank among the largest financial crime settlements in Treasury Department history.
Bank of America’s penalty underscores increasing regulatory scrutiny of financial institutions responsible for monitoring transactions that could facilitate organized crime, sanctions evasion or threats to national security.
Federal authorities emphasized that large banks must maintain effective reporting systems regardless of their size or the volume of transactions they process.
The settlement leaves Bank of America facing substantial financial costs and continuing regulatory oversight as it works to correct the compliance failures identified by federal investigators.
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