Bank of America is facing staggering federal penalties. Regulators ordered the lender to pay over $1.21 billion. The penalties stem from systemic anti-money laundering failures. As Banking Dive reported, the Treasury Department announced the massive action on Tuesday. The fines are among the steepest regulatory sanctions in American history.
The penalties involve multiple federal enforcement bodies. The Financial Crimes Enforcement Network levied a $1.2 billion fine. According to Banking Dive, this is the third-largest penalty in Treasury history. Meanwhile, the Office of the Comptroller of the Currency assessed a $750 million civil penalty. Banking Dive noted that this marks the largest penalty in the OCC’s 163-year history. The OCC penalty was credited toward the total FinCEN sum.
Regulators found deep operational weaknesses within the bank. Bank of America admitted to willful violations of the Bank Secrecy Act. FinCEN determined that the bank failed to conduct proper due diligence on foreign correspondent accounts. It also failed to file suspicious activity reports on roughly $5 billion in transactions. The OCC found the bank failed to adequately monitor trillions of dollars in activity. Furthermore, the agency stated the bank knew about escalation breakdowns for years. Staff and compliance officers lacked the skills needed to manage the program.
The problems persisted despite previous regulatory intervention. Back in 2024, the bank agreed to a formal cease-and-desist order. Yet the lender failed to take the required corrective actions. Comptroller Jonathan Gould called the bank’s poor response “unacceptable.” He stressed that widespread internal breakdowns threatened economic security. Additionally, OFAC announced an $11.6 million settlement covering sanctions violations. Those violations involved transactions connected to Iran, Russia, narcotics, and terrorism.
The bank acknowledged its obligations following the announcements. A Bank of America spokesperson told Banking Dive that “financial crime compliance is serious.” The spokesperson added in an email to Banking Dive that the bank is “responsible for getting it right.” They stated the team is actively completing work required by regulators. The firm has invested billions in technology and personnel to combat financial crime.
The financial fallout will hit the company’s bottom line immediately. Third-quarter earnings will include a non-tax-deductible charge of $1.2 billion. Banking Dive reported this charge will cut net income by roughly 17 cents per share. Regulators did not impose an asset cap on the institution. However, the historic penalty serves as a stark warning to the entire banking industry.
Sources Used
- Banking Dive: https://www.bankingdive.com/news/bofa-fined-1-21-billion-over-aml-bsa-occ-treasury/832915/
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