Bank of America fined $1.2B for money laundering failures

Bank of America has been hit with a $1.2 billion fine by the U.S. Treasury Department for allegedly failing to report over $5 billion in suspicious transactions, including $1 billion tied to national security risks ^[3]. The penalty, the third-largest in the department’s history, stems from widespread deficiencies in the bank’s financial crime compliance program ^[1].

The Office of the Comptroller of the Currency imposed a $750 million civil penalty—the largest ever for the regulator—citing a deficient and ineffective transaction monitoring system that delayed suspicious activity reports on billions of dollars in transactions ^[3]. The bank reportedly prioritized revenue over compliance and relied too heavily on external inquiries instead of internal controls.

In addition, Bank of America paid $11.6 million to the Office of Foreign Assets Control (OFAC) for over 400 apparent violations of sanctions programs targeting Iran, Russia, narcotics trafficking, and global terrorism ^[1]. The Treasury said the bank mistakenly processed millions in payments that breached these restrictions ^[3].

The fine comes just days after American Express was penalized $350 million for similar AML shortcomings ^[3]. Bank of America’s third-quarter results, due Wednesday, will include a $1.2 billion non-tax-deductible charge, reducing net income by about 17 cents per share. Shares dropped 1.8% in after-hours trading.

The bank defended its efforts, stating it has invested billions in technology and thousands of employees to combat financial crime, and is committed to fixing the issues raised by regulators ^[3]. The story was first reported by New York Post and The Independent.