US Treasury Fines Bank of America $1.2 Billion for Anti-Money-Laundering and Sanctions Failures

The US Treasury Department on Tuesday imposed more than $1.21 billion in penalties on Bank of America for violations of anti-money-laundering and sanctions laws. The Financial Crimes Enforcement Network assessed a $1.2 billion fine, the Office of the Comptroller of the Currency added a $750 million civil money penalty, and the Office of Foreign Assets Control settled 475 apparent sanctions violations for $11.6 million. The combined action is the third-largest in Treasury history and the largest ever levied by the OCC.

Bank of America admitted that it willfully violated the Bank Secrecy Act. The bank failed to maintain an adequate anti-money-laundering programme, to conduct required due diligence on correspondent accounts for foreign financial institutions, and to file suspicious activity reports on a timely basis. As a result it did not report more than $5 billion in suspicious transactions. More than $1 billion of that activity involved national-security and priority illicit-finance risks, including Chinese money-laundering networks and transactions with a substantial nexus to the southwest border.

Treasury Secretary Scott Bessent said that when a bank of this size fails to meet its obligations the consequences extend beyond its own walls and expose the broader financial system. The OCC noted that Bank of America processes hundreds of trillions of dollars in transactions each year and carries a high and rising risk profile for money laundering and terrorist financing. A 2024 cease-and-desist order had already required the bank to fix longstanding deficiencies; the new penalty reflects continued shortfalls.

OFAC’s settlement covers apparent violations of programmes targeting Russia, Belarus, Iran, Burma, Somalia, narcotics and global terrorism. The bank processed payments involving blocked banks, failed to prioritise alerts for exact name-and-date matches to blocked persons, and mishandled two business accounts through human error. OFAC described the violations as non-egregious but largely not voluntarily self-disclosed.

Bank of America said its third-quarter results, due on Wednesday, will include a non-tax-deductible charge of $1.2 billion that reduces net income by approximately 17 cents per share. The bank stated that its team is committed to completing the remedial work required by regulators. Analysts had estimated adjusted earnings per share near $1.10 before the charge.

The penalty arrives less than 24 hours before the earnings release and follows a period in which other large institutions have faced multi-billion-dollar anti-money-laundering fines. Unlike some earlier cases, the Bank of America action does not include parallel criminal charges from the Justice Department. The bank remains under the 2024 consent order and must work with a third party to identify and report previously undetected suspicious transactions.

For the broader banking sector the case underscores the cost of persistent compliance gaps at systemically important institutions. The $750 million OCC component alone sets a new high-water mark for that regulator. Whether the size of the fine produces lasting improvements in transaction monitoring will be measured in future examination reports rather than in the immediate earnings hit.