US authorities imposed more than $1.21 billion in penalties on Bank of America over anti-money-laundering and sanctions failures. The Treasury Department said the bank failed to report more than $5 billion in suspicious transactions, including over $1 billion linked to national-security and other priority illicit-finance risks. The package included a $1.2 billion Financial Crimes Enforcement Network penalty, a $750 million Office of the Comptroller of the Currency penalty credited against it, and an $11.6 million sanctions settlement.
Treasury described the action as the third-largest penalty in its history and the OCC component as the largest civil money penalty that agency has imposed. Bank of America admitted in the FinCEN resolution that it wilfully violated the Bank Secrecy Act, including by failing to maintain a compliant anti-money-laundering programme and file required suspicious activity reports. The OCC said the bank had not corrected serious weaknesses identified under a December 2024 cease-and-desist order.
MONITORING FAILURES AND REMEDIAL ORDERS
FinCEN said the bank relied too heavily on law-enforcement inquiries and referrals from other financial institutions instead of effective internal controls. Suspicious activity accumulated without timely investigation, while weaknesses in customer due diligence left some third-party payment patterns insufficiently examined. Regulators said the resulting delayed reports involved billions of dollars and reduced their usefulness to law enforcement.
The sanctions settlement covered 475 apparent violations involving programmes targeting Russia, Belarus, Iran, Myanmar, Somalia, narcotics and global terrorism. Treasury attributed the processing failures to a combination of technical errors, human mistakes, poor alert calibration and delayed watchlist updates. OFAC characterised the apparent violations as non-egregious and largely not voluntarily disclosed.
FINANCIAL EFFECT AND NEXT STEPS
The consent order requires Bank of America to appoint a third party for a retrospective review of transactions that went undetected and to report qualifying activity to FinCEN. The bank must also undergo independent reviews of transaction monitoring, customer due diligence, foreign correspondent-account checks and relevant data governance. A bank spokesperson said it had invested billions of dollars and assigned thousands of employees to financial-crime controls, and remained committed to completing the required work.
Bank of America said its third-quarter results would include a $1.2 billion non-tax-deductible charge, reducing quarterly net income by about 17 cents a share. Reuters reported that the shares fell 2.7% in after-hours trading, while noting that regulators did not impose an asset cap. The next immediate milestone is the bank's results release and conference call, when investors can assess the charge, remediation costs and management's timetable for completing the regulatory work.