In brief
Bank of America was fined $1.2bn after the Treasury Department uncovered that it missed more than $5bn in potentially illicit money‑laundering transactions, including ties to Chinese networks and trade‑based schemes near the U.S. southwest border. The penalty, the largest ever imposed by Treasury on a single institution, comprised $750m from the OCC and $11.6m for sanctions breaches. The fine will hit the bank’s quarterly earnings, weighing about 17 cents per share, just a day before its earnings release. Treasury officials warned that such oversights threaten the wider U.S. financial system, while the bank promises to overhaul its compliance measures. The settlement marks a turning point for anti‑money‑laundering enforcement at the country’s biggest banks.
The U.S. Treasury slapped the banking giant with a record $1.2 billion fine after finding that it failed to flag and report more than $5 billion in suspicious transactions over the past decade. Of that amount, $1 billion involved activities that posed national security risks, including alleged Chinese money‑laundering rings and trade‑based practices connected to the Southwest border.
Treasury Secretary Scott Bessent warned that such failures “extend far beyond the bank’s own walls,” exposing the broader U.S. financial system to illicit finance risks.
The penalty is split between a $750 million charge from the Office of the Comptroller of the Currency (OCC) and a $11.6 million settlement with the Office of Foreign Assets Control (OFAC) – the latter covering 475 sanctions violations on Russia, Iran, narcotics, and terrorism.
Bank of America said it would bear a $1.2bn non‑tax‑deductible charge that will reduce its third‑quarter net income by about 17 cents per share, a hit announced just 24 hours before its earnings call.
In a statement to the BBC, the bank noted it had already deployed significant staff and resources to address the shortcomings, and that those costs were factored into its current expenses.
Treasury highlighted that the bank had overly relied on external inquiries, effectively outsourcing key parts of its anti‑money‑laundering duties to third parties. The settlement confirms that Bank of America willfully violated the Bank Secrecy Act, lacking a compliant AML programme and failing to file required suspicious activity reports.
The fine underscores the rising scrutiny banks face after regulators discovered widespread lapses in anti‑money‑laundering controls. For the U.S., it signals a stronger commitment to preventing the financial system from being used to fuel crime and terrorism.
