Bank of America fined $1.21bn by US regulators over money laundering lapses

US regulatory authorities hit Bank of America with more than $1.21bn in penalties, concluding coordinated enforcement actions targeting widespread breakdowns in the institution's anti-money laundering and sanctions compliance programmes. The historic package marks the third-largest enforcement action ever recorded by the US Department of the Treasury.

Treasury and OCC Impose Record-Breaking Penalties

The punitive measures span multiple federal agencies, with the Financial Crimes Enforcement Network assessing a $1.2bn penalty. According to FinCEN, the nation's second-largest bank failed to counter and disclose priority national security risks, including illicit capital flows along the southwest border and Chinese money laundering networks. In a parallel action, the Office of the Comptroller of the Currency imposed a $750m civil money penalty over an ineffective and deficient Bank Secrecy Act and anti-money laundering compliance programme. Regulators noted that the OCC sanction amount is credited against the overall total rather than added to it. Separately, the Office of Foreign Assets Control concluded an $11.6m settlement resolving apparent infractions across several sanctions regimes, covering nations and activities including Iran, Russia, narcotics, and global terrorism.

Willful Violations and Concealed Transactions

Under the terms established with FinCEN, Bank of America conceded that it "willfully violated" the Bank Secrecy Act. US authorities determined that the lender admitted non-compliance across three core mandates: maintaining an anti-money laundering programme that complied with statutory minimums under the BSA and FinCEN regulations, conducting due diligence regarding correspondent accounts held by foreign financial institutions, and filing suspicious activity reports. Investigators found that Bank of America prioritized its revenues and minimized the impact on its required compliance resources, effectively outsourcing much of its detection responsibility to law enforcement agencies and other financial institutions.

Consequently, the institution omitted to submit timely suspicious activity reports to FinCEN for more than $5bn in suspicious transactions. Over $1bn of those untracked funds involved national security matters and critical illicit finance threats, encompassing fraud patterns, ties to Chinese money laundering networks, and suspected trade-based money laundering connected to the southwest border. Comptroller of the Currency Jonathan Gould stated that the bank's poor response to its Bank Secrecy Act deficiencies warranted the agency's largest civil money penalty ever assessed against a bank, noting that compliance failures continued despite a prior cease-and-desist order issued in 2024.

Financial Impact and Mandatory Remediation Orders

Management disclosed that quarterly results would incorporate a $1.2bn non-tax-deductible charge, reducing net income by approximately 17 cents per share. Treasury Secretary Scott Bessent noted that 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." Equity analysts observed that the financial hit remains digestible for the institution, though the regulatory action casts a spotlight on internal controls and compliance infrastructure.

The newly issued consent order obliges Bank of America to hire an external firm to execute a lookback review, which will identify and lodge notifications with FinCEN for all suspicious transfers missed during the breakdown. The lender must also submit to third-party audits evaluating its customer due diligence, foreign correspondent account due diligence, suspicious activity monitoring systems, and the underlying data governance framework supporting its anti-money laundering infrastructure.

With earnings results scheduled for release, investors and analysts await official filings to gauge the exact operational impact of the one-off charge against ongoing financial performance.