Bank of America fined $1.2 billion for money laundering compliance failures

Bank of America has been fined $1.2 billion (£910 million) for failing to detect potential money laundering and other illegal activities, according to the US Treasury Department. The bank did not report over $5 billion in suspicious activity to the government, with $1 billion of that posing national security and illicit finance risks. The Treasury noted that these failures included not flagging transactions potentially linked to Chinese money laundering networks or trade-based laundering connected to the southwest border. Bank of America stated, "Our team is far along with and committed to completing the work required to address the issues raised by our regulators." This announcement came less than 24 hours before the bank was scheduled to release its quarterly earnings on Wednesday morning. The bank indicated that its third-quarter results would include a non-tax-deductible charge of $1.2 billion, impacting net income by approximately 17 cents per share. The bank added that it has already allocated substantial personnel and resources to its ongoing remediation efforts. Treasury Secretary Scott Bessent commented on the fine, stating, "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 US financial system to significant illicit finance risks." The Treasury highlighted that the bank overly relied on inquiries from external parties, such as law enforcement and other financial institutions, rather than its own internal controls, effectively outsourcing a significant portion of its detection and reporting obligations. As part of the settlement, Bank of America admitted to "willfully violating" the Bank Secrecy Act by failing to maintain a compliant anti-money laundering program, conduct required due diligence on foreign correspondent accounts, and file suspicious activity reports. The $1.2 billion fine included penalties from the Office of the Comptroller of the Currency (OCC) and the Office of Foreign Assets Control (OFAC). The OCC's $750 million fine was noted as the largest penalty it has ever imposed. OFAC stated that its settlement with the bank was related to 475 apparent violations of sanctions programs, including those concerning Russia and Iran, narcotics, and global terrorism. The settlement amount of $11.6 million was determined based on the assessment that Bank of America's apparent violations were "non-egregious," according to OFAC.