Bank of America has been hit with more than $1.2 billion in penalties by the U.S. Treasury Department for widespread failures to detect and report suspected money laundering and sanctions violations, the third-largest penalty in Treasury history. The action, announced on October 13, targets the nation's second-largest bank over conduct that regulators say spanned from 2018 through 2025.
A $5 Billion Blind Spot
Treasury said the penalty stems from the bank's failure to timely report more than $5 billion in suspicious transactions, including over $1 billion involving national security and other priority illicit-finance risks. Treasury alleged that some transactions were "indicative of Chinese Money Laundering Networks, fraud, and potential trade-based money laundering with a substantial nexus to the southwest border."
Regulators painted a picture of a compliance program running on autopilot. Treasury alleged that Bank of America "prioritized its revenues" when building compliance programs, relying on outside inquiries from law enforcement and other financial institutions to identify suspicious activity instead of its own controls. FinCEN said the bank "effectively outsourced to third parties a substantial portion of its proactive detection and reporting obligations."
As part of the settlement, Bank of America admits that it willfully violated the 1970 Bank Secrecy Act, which requires banks to help the government detect and prevent money laundering. A consent order also requires the bank to hire an independent third party to review past transactions, identify suspicious activity it failed to detect, and report those transactions to FinCEN.
The Record-Breaking Components
The headline figure is made up of several record penalties:
- $750 million from the Office of the Comptroller of the Currency — the largest fine the OCC has ever imposed — stemming from Bank Secrecy Act violations raised in a 2024 cease-and-desist order.
- $11.6 million settlement with the Office of Foreign Assets Control for 475 apparent violations of sanctions programs. Treasury said the bank mistakenly allowed over $14 million in payments to sanctioned individuals and banks connected to "Russia, Belarus, Iran, Burma, Somalia, narcotics, and global terrorism."
Bank of America's admission came with a costly price tag.
"Not Above the Law"
Treasury Secretary Scott Bessent did not mince words: "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." He added: "Today's actions send a clear message that even the biggest financial institutions are not above the law."
The bank moved quickly to contain the fallout. "Financial crime compliance is serious, and we are responsible for getting it right," a Bank of America spokesperson said. "We have invested billions of dollars in technology and dedicated thousands of employees to combat financial crime, and our team is far along with and committed to completing the work required to address the issues raised by our regulators."
The financial hit is real but manageable for a bank of this size: third-quarter results released October 14 included a $1.2 billion non-tax-deductible charge, which reduced quarterly net income by approximately 17 cents per share. Bernard Mensah, BofA's president of international, told CNN's Richard Quest at a Global Perspectives panel in Bangkok that the bank is working to get compliance back on track.
The Takeaway
This is regulators' loudest signal yet that compliance is not optional, no matter how big the balance sheet. With an independent review now digging through years of missed red flags, the $1.2 billion may not be the last word on Bank of America's money-laundering troubles.
Watch: The National Desk's report on the Treasury's $1.2 billion penalty against Bank of America
Music in this post's reel: Kevin MacLeod - Long Road Ahead B (incompetech.com), licensed under CC BY 3.0