In brief
Bank of America faces a $1.2 bn fine after the Treasury discovered serious failings in its anti‑money‑laundering controls. More than $5 bn of suspicious activity went unreported, including potential ties to Chinese laundering networks and trade‑based schemes linked to the Southwest border. The bank’s negligence, largely relying on external inquiries instead of internal checks, also involved multiple sanctions breaches. The settlement shows regulators are tightening oversight of large institutions. The penalty is the largest ever imposed on a U.S. bank for such violations.
Bank of America has been hit with a record $1.2 bn fine by the U.S. Treasury for serious gaps in its anti‑money‑laundering controls. The penalty comes after the bank failed to flag more than $5 bn in suspicious transactions, $1 bn of which could have presented national‑security threats.
Regulators found the bank overly dependent on outside requests for help, effectively outsourcing a large portion of its detection duties to third parties. This approach proved inadequate when hundreds of high‑risk movements – including those linked to Chinese networks and trade‑based laundering at the Southwest border – slipped through the system.
The settlement forces the bank to admit willful violations of the Bank Secrecy Act, including failures to maintain compliant AML programs, conduct due diligence on foreign correspondent accounts and file required suspicious activity reports.
In addition to the Treasury’s $1.2 bn figure, the Office of the Comptroller of the Currency contributed a $750 m penalty, its largest ever, while the Office of Foreign Assets Control added $11.6 m over 475 apparent sanctions breaches covering Russia, Iran, narcotics and terrorism.
Bank of America said the fine will reduce its third‑quarter net income by about 17 cents per share and that remediation costs are already reflected in the current expense base.
Treasury Secretary Scott Bessent warned that a failure of a bank this size exposes the entire U.S. financial system to illicit finance risks, underscoring the need for stricter compliance oversight.
