Treasury hits BofA with $1.2B fine over money laundering violations

In a historic move, Bank of America has been hit with more than $1.21 billion in penalties by the U.S. Government over violations of anti-money laundering and sanctions laws.

The Treasury Department announced what it described as record enforcement actions on Tuesday afternoon. These include a $1.2 billion penalty for Bank of America’s “failure to mitigate and report priority national security risks, including Chinese Money Laundering Networks and illicit finance along the southwest border,” the Treasury said, in a statement. The fine marks the third-largest penalty in Treasury history.

This includes a $750 million penalty by the Office of the Comptroller of the Currency over what is described as the BofA’s “deficient and ineffective” anti-money laundering compliance program. The penalty is the largest in OCC history. The Office of Foreign Assets Control also announced an $11.6 million settlement agreement with BofA over “apparent violations of numerous sanctions programs, including on Iran, Russia, narcotics, and global terrorism.”

“Financial institutions are on the front lines of protecting our economic and national security,” said Treasury Secretary Scott Bessent, in a statement.  “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. Today’s actions send a clear message that even the biggest financial institutions are not above the law.”

Bank of America failed to report over $5 billion in suspicious activity to the Treasury’s Financial Crimes Enforcement Network (FinCEN), according to the Treasury.

In its statement, the Treasury said that, as part of its resolution with FinCEN, Bank of America admits that it willfully violated the Bank Secrecy Act and failed to implement and maintain an anti-money-laundering program that met the minimum requirements of the BSA and FinCEN’s implementing regulations. The Treasury added that the bank failed to conduct due diligence for correspondent accounts for foreign financial institutions, and file suspicious activity reports. 

“Financial crime compliance is serious, and we are responsible for getting it right," said a Bank of America spokesperson, in a statement sent to InvestmentNews. "We worked with regulators to reach these penalty resolutions stemming from violations cited in the previously reported 2024 OCC Consent Order and FinCEN’s investigation."

"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," the Bank of America spokesperson added. "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."

The spokesperson said that the bank's third-quarter results will include a non-tax-deductible charge of $1.2 billion impacting net income by approximately 17 cents per share. "We have already dedicated substantial personnel and resources to our ongoing remediation efforts, and those costs are in the current expense base," the spokesperson added. 

Bank of America is not the only high-profile financial institution to be hit with a money-laundering fine. Earlier this year UBS agreed to pay $125 million in a resolution with four federal regulators over anti-money laundering gaps.