Bank of America hit with $1.2B Treasury penalties

U.S. Treasury authorities have assessed more than $1.2 billion in penalties against Bank of America (BAC) for alleged violations of anti-money-laundering and sanctions laws. The actions center on failures under the Bank Secrecy Act, including deficiencies in the bank’s anti-money-laundering program and delayed reporting of suspicious activity.

The Financial Crimes Enforcement Network said the $1.2 billion penalty is the third-largest in Treasury’s history. Treasury stated that more than $1 billion of the unreported suspicious transactions involved national security and other high-priority risks, including activity linked to Chinese money-laundering networks and the southwest border.

As part of the settlements, Bank of America (BAC) admitted that it willfully violated Bank Secrecy Act regulations. The bank acknowledged failing to maintain a compliant anti-money-laundering program, to conduct required due diligence on foreign correspondent accounts, and to file suspicious activity reports in a timely manner.

Treasury said the bank did not timely report more than $5 billion in transactions classified as suspicious. These failures were tied to weaknesses in transaction monitoring and customer due diligence that allowed high-risk activity to go unreported or to be reported late.

Within the overall package, the Office of the Comptroller of the Currency imposed a $750 million civil money penalty on Bank of America. Treasury described this as a record penalty from the OCC, and it is credited toward the more than $1.2 billion total assessed against the bank.

Separately, Treasury announced an $11.6 million settlement over sanctions violations. That settlement covers apparent breaches of multiple sanctions programs and forms part of the broader enforcement response to the bank’s control failures.

Bank of America said the penalties will result in a $1.2 billion non-tax-deductible charge in its third-quarter results. The bank expects the charge to reduce net income by about $0.17 per share for the quarter.

The bank stated that remediation costs related to its compliance issues are already reflected in its current expense base. It said it has invested billions of dollars in compliance and described itself as far along in remediation efforts aimed at strengthening anti-money-laundering and sanctions controls.

Treasury officials emphasized that the scale of the penalties is intended to reinforce that large financial institutions remain subject to the same laws as other entities. The enforcement actions highlight the priority placed on reporting activity linked to national security and other high-risk illicit finance.

Regulators indicated that ongoing remediation, including enhancements to monitoring systems and due diligence processes, will be necessary. Independent reviews and lookbacks are expected to ensure that past gaps are addressed and that future suspicious activity is identified and reported promptly.