Bank of America fined $1.2bn for money laundering failings
Bank of America has been hit with a $1.2 billion fine by the US Treasury Department for failing to detect and report potential money laundering and other illegal activity. The announcement came on Tuesday, less than 24 hours before the bank was due to report its quarterly earnings.
Regulatory failures and response
The Treasury said the bank failed to report over $5 billion in suspicious activity to the government, including $1 billion that posed national security and illicit finance risks. Failures included not flagging transactions possibly involving Chinese money laundering networks and trade-based laundering with a substantial nexus to the southwest border. The bank admitted it willfully violated the Bank Secrecy Act by not maintaining a compliant anti-money laundering programme, not conducting required due diligence on foreign correspondent accounts, and not filing suspicious activity reports.
The Treasury also said the bank overly relied on inquiries from outside parties like law enforcement and other financial institutions instead of using its own internal controls, effectively outsourcing a substantial portion of its proactive detection and reporting obligations. In a statement to the BBC, Bank of America said: “Our team is far along with and committed to completing the work required to address the issues raised by our regulators.” The bank added that its third-quarter results would include a non-tax-deductible charge of $1.2 billion, impacting net income by approximately 17 cents per share.
The fine is the third-largest ever imposed by the Treasury Department. It includes a $750 million penalty from the Office of the Comptroller of the Currency, the biggest penalty that agency has ever levied, and an $11.6 million settlement with the Office of Foreign Assets Control tied to 475 apparent violations of sanctions programmes including Russia, Iran, narcotics, and global terrorism. OFAC described the apparent violations as non-egregious. Treasury Secretary Scott Bessent said: “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 US financial system to significant illicit finance risks.”
