The U.S. Treasury Department imposed $1.21 billion in penalties on Bank of America on October 15, marking the third-largest fine in Treasury history and the largest ever imposed by the Office of the Comptroller of the Currency (OCC). The enforcement action stems from alleged willful violations of the Bank Secrecy Act, including failures to report more than $5 billion in suspicious transactions and address priority national security risks.
The penalties include a $1.2 billion fine from the Financial Crimes Enforcement Network (FinCEN) and a $750 million penalty from the OCC, which will be credited against the FinCEN assessment. An additional $11.6 million settlement addresses sanctions violations tied to programs including those targeting Iran, Russia, narcotics trafficking, and global terrorism.
Regulators’ Rationale
Treasury Secretary Scott Bessent stated in a press release that the penalties send a message that “even the biggest financial institutions are not above the law.” The enforcement action cited Bank of America’s failure to mitigate and report risks, including Chinese money-laundering networks and illicit finance along the southwest border. Treasury emphasized that such failures expose the entire U.S. financial system to significant illicit finance risks.
Bank of America’s Response
In a statement, Bank of America acknowledged the penalties and noted that it has invested billions in compliance technology and dedicated thousands of employees to address financial crime. The bank stated it is “far along” in remediation efforts and that the penalties will result in a $1.2 billion non-tax-deductible charge, reducing third-quarter net income by approximately 17 cents per share.
The penalties come one day before the bank’s scheduled third-quarter earnings report, during which it disclosed the financial impact of the fines. Bank of America’s stock fell more than 2% in after-hours trading following the announcement.
Scope of Violations
Regulators identified widespread deficiencies in Bank of America’s systems, including:
- Failure to maintain a compliant anti-money laundering program
- Inadequate due diligence on foreign correspondent accounts
- Lapses in filing required suspicious activity reports
- Deficiencies in transaction monitoring and internal oversight
The enforcement action follows a 2024 Consent Order from the OCC and an ongoing investigation by FinCEN. Bank of America stated it has worked with regulators to resolve the cited violations.
Market and Regulatory Impact
The $750 million OCC penalty is the largest ever imposed by the agency, surpassing previous highs. The $1.2 billion total fine ranks as the third-largest in Treasury Department history, trailing only penalties against Binance ($3.4 billion in 2023) and TD Bank ($1.3 billion in 2024).
Treasury’s action underscores heightened regulatory scrutiny of financial institutions’ compliance with anti-money laundering and sanctions laws. The penalties reflect a broader administration effort to hold banks accountable for systemic failures that enable illicit finance.
Background on Anti-Money Laundering Laws
The Bank Secrecy Act of 1970 requires financial institutions to assist U.S. government agencies in detecting and preventing money laundering. Banks must:
- Implement robust compliance programs
- Monitor transactions for suspicious activity
- File reports with FinCEN when red flags are identified
- Conduct due diligence on high-risk clients and correspondent accounts
Violations of these obligations can result in civil penalties, criminal charges, or both, depending on the severity of the misconduct.