The United States government has imposed more than $1.21 billion in financial penalties on Bank of America following regulatory findings of serious weaknesses in the bank’s anti-money laundering controls, suspicious transaction reporting and compliance with US sanctions laws.
The enforcement actions were announced on Tuesday, October 13, by the US Department of the Treasury and its regulatory agencies. According to official statements, the bank failed to report more than $5 billion in suspicious transactions to the appropriate authorities. More than $1 billion of that activity involved risks identified by regulators as national security-related and other priority illicit-finance concerns.
Regulatory Findings
The Financial Crimes Enforcement Network (FinCEN), a Treasury Department bureau responsible for combating illicit financial activity, assessed a $1.2 billion penalty against Bank of America for failures to address and report priority financial risks.
Separately, the Office of the Comptroller of the Currency (OCC) imposed a $750 million civil penalty over deficiencies in the bank’s compliance programme. The OCC described the action as the largest civil money penalty in its history against a bank.
Regulators found that the bank's transaction-monitoring systems failed to identify and escalate potentially suspicious activity in a timely manner. The shortcomings resulted in substantial delays in suspicious activity reports, including reports relating to transactions that exhibited potential indicators of money laundering.
The Treasury Department also said the bank relied excessively on law-enforcement inquiries and information from other financial institutions instead of adequately identifying suspicious transactions through its own monitoring systems.
Sanctions Compliance Violations
In a separate enforcement action, the Treasury Department’s Office of Foreign Assets Control (OFAC) reached an $11.6 million settlement with the bank over 475 apparent violations of US sanctions programmes.
The alleged violations involved payment processing and other compliance failures connected to sanctions targeting countries and activities including Russia, Iran, narcotics trafficking and global terrorism.
Together, the actions amount to more than $1.21 billion in penalties and settlements. The $750 million OCC penalty is credited against the $1.2 billion FinCEN assessment and should not be counted as an additional $750 million on top of it.
Bank of America Ordered to Review Past Transactions
Under the regulatory requirements, Bank of America must work with an independent third party to review historical transactions, identify suspicious activity that was previously overlooked and report qualifying transactions to FinCEN.
The bank must also undergo independent assessments of its transaction-monitoring systems, customer due-diligence procedures and controls governing correspondent accounts held for foreign financial institutions.
The action follows an earlier cease-and-desist order issued in December 2024 that required the bank to address weaknesses in its anti-money-laundering compliance programme. The OCC said significant deficiencies persisted despite that earlier regulatory intervention.
Bank's Response and Financial Impact
Bank of America said it has invested billions of dollars in technology and dedicated thousands of employees to combating financial crime. A bank spokesperson said the institution was committed to completing the work required to address the regulators’ concerns.
The bank also indicated that its third-quarter financial results would include a non-tax-deductible charge of approximately $1.2 billion, reducing net income by an estimated 17 cents per share.
The financial consequences may extend beyond the immediate penalty, as the enforcement action raises questions about the effectiveness of the bank’s compliance oversight and the costs of strengthening its controls.
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