The U.S. Treasury Department announced on Tuesday that Bank of America will pay a $1.2 billion fine for failing to detect and report over $5 billion in suspicious activity, including $1 billion that posed national security and illicit finance risks.
The bank’s shortcomings included not flagging transactions that may have involved Chinese money‑laundering networks or trade‑based laundering linked to the southwest border, the Treasury said.
Bank of America said it is committed to addressing the regulator’s concerns and that the fine will be reflected in its third‑quarter results as a non‑tax‑deductible charge, cutting net income by about 17 cents per share.
Treasury Secretary Scott Bessent warned that a failure of a bank of this size “exposes the entire U.S. financial system to significant illicit finance risks.” The agency cited an overreliance on external inquiries and a failure to maintain an effective internal anti‑money‑laundering program.
As part of the settlement, the bank admitted willful violations of the Bank Secrecy Act, failed due diligence on foreign correspondent accounts, and failure to file suspicious activity reports. The penalty includes a $750 million fine from the Office of the Comptroller of the Currency and an $11.6 million settlement with the Office of Foreign Assets Control for 475 sanctions violations.
The fine is the third‑largest ever imposed by the Treasury and the biggest ever levied by the OCC. Bank of America’s executives said they have already dedicated substantial personnel and resources to remediation efforts, which are now part of the bank’s current expense base.
Bank of America will announce its quarterly earnings tomorrow, with the fine’s impact already reflected in its financial statements.
