WASHINGTON — The U.S. Department of the Treasury announced more than $1.21 billion in penalties against Bank of America on Tuesday, citing widespread breakdowns in the institution’s anti-money laundering controls and sanctions compliance.
The enforcement action marks the third-largest penalty ever assessed by the department, trailing only a roughly $4 billion settlement with cryptocurrency exchange Binance in 2023 and an approximately $3 billion penalty against TD Bank in 2024, the Associated Press reported.
Treasury officials stated that the nation’s second-largest bank prioritized profits over proper regulatory oversight, depending so heavily on law enforcement inquiries and alerts from other institutions that it functionally outsourced portions of its suspicious-activity surveillance.
“When a bank of this size fails to meet its anti-money laundering and sanctions obligations, the consequences extend far beyond its own walls, exposing the entire U.S. financial system to significant illicit finance risks,” Treasury Secretary Scott Bessent said in a statement.
Record Banking Penalties
The total financial sanction involves multiple regulatory arms within the Treasury Department:
- The Financial Crimes Enforcement Network, known as FinCEN, issued a $1.2 billion penalty after finding the bank failed to address national security concerns, including illicit cross-border finance along the southwest border and Chinese money laundering networks.
- The Office of the Comptroller of the Currency assessed a $750 million civil penalty — the highest in the agency’s history — which is credited toward the overall FinCEN fine.
- The Office of Foreign Assets Control reached an $11.6 million settlement with the lender covering 475 apparent violations across several sanctions regimes, including measures tied to Iran, Russia, narcotics trafficking and global terrorism.
According to Treasury disclosures cited by Al Jazeera, Bank of America failed to notify FinCEN in a timely manner regarding more than $5 billion in suspicious transactions. Federal authorities also noted that the bank admitted to willfully violating the Bank Secrecy Act of 1970, which mandates that financial firms assist the federal government in uncovering and halting money laundering schemes, the New York Post reported.
Lapses in Internal Controls
Regulators emphasized that Bank of America had failed to resolve deficiencies previously targeted in a 2024 cease-and-desist order. That earlier action highlighted systemic problems with how the company set thresholds to trigger investigations into questionable customer behavior.
Comptroller of the Currency Jonathan Gould criticized the lender’s slow remediation efforts, warning that sustained compliance lapses by a globally systemic financial institution pose significant risks to both economic stability and national security.
“The bank’s poor response to its BSA deficiencies is unacceptable,” Gould said in an agency release. “The second largest bank’s egregious and continued BSA violations warrant the OCC imposing its largest civil money penalty ever assessed against a bank.”
Treasury officials noted that warning signs involving potential trade-based money laundering, fraud schemes and narcotics proceeds routinely went unaddressed by compliance personnel, CNBC reported.
Bank Response and Next Steps
In an issued statement, Bank of America said it has dedicated billions of dollars toward upgraded compliance technology and assigned thousands of workers to combat illicit finance.
“Financial crime compliance is serious, and we are responsible for getting it right,” the bank stated. “We worked with regulators to reach these penalty resolutions stemming from violations cited in the previously reported 2024 Consent Order and FinCEN’s investigation.”
Under the terms of the settlement, Bank of America must hire outside experts to conduct an independent review of past transactions that slipped through undetected. The firm is also required to submit its transaction-monitoring systems and customer due-diligence practices to third-party oversight while fulfilling extensive training, audit and testing commitments mandated by sanctions regulators.
