Bank of America faces $1.2 billion money laundering penalty

U.S. regulators announced more than $1.21 billion in penalties against Bank of America on Tuesday, saying the nation’s second-largest bank failed to report billions of dollars in suspicious transactions and processed payments that appeared to violate U.S. sanctions.

The Treasury Department said its Financial Crimes Enforcement Network, or FinCEN, assessed a $1.2 billion penalty over anti-money laundering failures. The Office of the Comptroller of the Currency assessed a $750 million fine — the largest in its history — that is credited toward the FinCEN penalty, according to Al Jazeera. A separate $11.6 million settlement with Treasury’s Office of Foreign Assets Control addresses apparent sanctions violations.

The $1.2 billion penalty is the third-largest in Treasury Department history, the agency said.

“Today’s actions send a clear message that even the biggest financial institutions are not above the law,” Treasury Secretary Scott Bessent said in a statement. He said failures by a bank of Bank of America’s size expose the broader U.S. financial system to “significant illicit finance risks.”

Treasury said Bank of America admitted it willfully violated the Bank Secrecy Act, failed to maintain an anti-money laundering program meeting the law’s minimum requirements and did not file mandatory Suspicious Activity Reports. The bank failed to report more than $5 billion in suspicious transactions to FinCEN on time, the department said. More than $1 billion of that activity involved national security-related or other priority illicit finance risks, including transactions indicative of Chinese money laundering networks, fraud and potential trade-based money laundering connected to the southwest border.

Al Jazeera reported that regulators also identified weaknesses in the bank’s processes for detecting and reporting suspicious transactions and conducting customer due diligence. According to the Treasury statement cited by Al Jazeera, the bank “effectively outsourced to third parties a substantial portion of its proactive detection and reporting obligations.”

The sanctions settlement covers 475 apparent violations of multiple U.S. programs. Treasury said the bank processed millions of dollars in payments that appeared to breach sanctions targeting Russia, Belarus, Iran, Burma, Somalia, narcotics and global terrorism. The settlement includes commitments on training, testing, audits and future communication and cooperation with the Office of Foreign Assets Control, Al Jazeera reported.

“Financial crime compliance is serious, and we are responsible for getting it right,” Bank of America said in a statement. The bank said it had invested billions of dollars in technology and assigned thousands of employees to combat financial crime, and was working to address the issues raised by regulators. It also said it would continue supporting law enforcement investigations and filing hundreds of thousands of suspicious activity reports each year.

Bank of America has more than 70 million clients, according to NBC News. It processes about $4.5 trillion in payments for individual customers annually and handles $450 trillion in payments for corporate customers, including payroll, corporate credit card and supplier payments.