The U.S. Treasury has imposed a record $1.2 billion fine on Bank of America for violations of anti-money laundering (AML) and sanctions laws. The penalty, the third-largest in Treasury's history, stems from the bank's failure to report over $5 billion in suspicious transactions, with more than $1 billion linked to national security risks. The Financial Crimes Enforcement Network (FinCEN) assessed the bulk of the penalty for the bank's inadequate reporting of Chinese money-laundering networks and illicit finance along the southwest border. The Office of the Comptroller of the Currency (OCC) also levied a $750 million civil penalty for deficiencies in the bank's AML compliance program, while the Office of Foreign Assets Control (OFAC) settled for $11.6 million over sanctions violations.
The penalties highlight systemic issues within Bank of America's compliance framework. Treasury noted that the bank prioritized revenue over compliance, relying heavily on law enforcement and third-party interventions rather than its own internal controls. This approach allowed suspicious activity to accumulate uninvestigated for extended periods, reducing the effectiveness of Suspicious Activity Reports (SARs) for law enforcement. The bank also failed to adequately monitor customer transactions and ignored red flags related to narcotics trafficking and trade-based money laundering, despite internal warnings.
The OCC's findings were equally severe, stating that the bank's transaction monitoring system failed to properly track trillions in transactions. The agency criticized the bank's lack of skilled personnel and its failure to escalate suspicious activity for years. Comptroller Jonathan Gould emphasized that the penalties were necessary due to the bank's repeated violations, calling it the largest fine ever imposed by the OCC. OFAC's findings included 475 apparent sanctions violations, though they were deemed less severe than the violations against TD Bank.
This penalty follows a 2024 cease-and-desist order from the OCC, which identified systemic failures in Bank of America's AML compliance. Despite the order, the bank continued to fail in its obligations, leading to the current fines. The case underscores the growing regulatory scrutiny of major banks for AML and sanctions compliance, with Bank of America now joining TD Bank as a notable example of the consequences of non-compliance.
The penalties also signal a shift in regulatory enforcement, with regulators now willing to impose significant fines for repeated violations. While the fines are substantial, they do not fully address the long-term risks posed by the bank's compliance failures. The case serves as a warning to other financial institutions about the importance of robust AML programs and the potential costs of neglecting them.