The U.S. Department of the Treasury announced coordinated enforcement actions on Tuesday against Bank of America, the nation's second-largest bank. The penalties total more than $1.21 billion due to breaches of anti-money laundering laws and sanctions regulations, as stated in the Treasury's official release.
Enforcement Actions and Financial Penalties
These actions involve three different agencies: the Financial Crimes Enforcement Network (FinCEN) levied a civil penalty of $1.2 billion; the Office of the Comptroller of the Currency (OCC) imposed a $750 million fine, the largest in its history, which is included within FinCEN's total and not added separately; and the Office of Foreign Assets Control (OFAC) settled on an $11.6 million payment for 475 apparent breaches of various sanctions programs.
In terms of actual payments, the bank is required to pay $450 million directly to the Treasury within ten days, along with the $750 million to the OCC, amounting to $1.2 billion in effective disbursements, according to FinCEN's consent order.
Failures in Reporting and System Oversight
Investigations revealed that Bank of America failed to timely report over $5 billion in suspicious transactions to FinCEN between January 2018 and July 2025. Of this, more than $1 billion was tied to national security priority risks, including Chinese money laundering networks and illicit financial activities related to the U.S. southwest border.
The bank admitted to willfully violating the Bank Secrecy Act by not maintaining a compliant anti-money laundering program, failing to conduct due diligence on correspondent accounts for foreign banks, and neglecting to file Suspicious Activity Reports (SARs) accurately and promptly.
A major flaw was in the bank's proprietary transaction monitoring system, known as the Event Processor, developed in 2010. This system maintained poorly calibrated alert thresholds and static risk weights for years. When the bank lowered its detection threshold in December 2023, a look-back review uncovered nearly 8,900 unfiled SARs, involving transactional activity of almost $4 billion, estimating a need for 750 additional employees and 800 consultants to handle the volume generated by the new threshold.
Regulatory Oversight and Compliance Lapses
This case follows a direct precedent: the OCC had already issued a cease-and-desist order in December 2024, demanding the bank rectify its anti-money laundering program, yet over a year later, the bank continued to fail in escalating potentially suspicious activities for investigator review.
FinCEN's order also disclosed internal communications showing how the bank prioritized revenue over regulatory compliance. In August 2022, compliance staff concluded that "overwhelming evidence suggests the client is receiving payments from numerous mass marketing scam victims," with about 90% of more than 125 cases related to fraud. Despite this, the bank chose to maintain the business relationship.
International Sanctions Violations
The 475 apparent OFAC violations, deemed a non-egregious case, involved transactions linked to Iran, Russia, Belarus, Myanmar, Somalia, drug trafficking, and global terrorism, amounting to approximately $14.8 million, occurring between September 2021 and April 2025.
Treasury Secretary Scott Bessent warned, "When a bank of this size fails to meet its anti-money laundering and sanctions obligations, the repercussions extend far beyond its own walls, exposing the entire U.S. financial system to significant illicit financing risks."
Bank of America publicly acknowledged the seriousness of these deficiencies and stated it is "well advanced" in corrective measures, noting that the $1.2 billion charge will reduce its third-quarter 2026 net income by approximately 17 cents per share.
The FinCEN order also mandates independent reviews of the bank's anti-money laundering program with deadlines extending to July 2028, and a retrospective review of transactions from January 2022, with a final report due by December of that year.
Understanding Bank of America's Regulatory Challenges
What are the primary reasons for the fines imposed on Bank of America?
The fines are primarily due to violations of anti-money laundering laws and sanctions regulations, including failures in timely reporting of suspicious transactions and inadequate compliance programs.
How significant is the $1.2 billion penalty for Bank of America?
The $1.2 billion penalty is significant as it highlights major compliance failures within the bank, potentially impacting its profitability and requiring substantial corrective action.
What actions must Bank of America undertake following the enforcement actions?
Bank of America is required to pay fines, conduct independent reviews of its anti-money laundering program, and improve its compliance systems to prevent future violations.