Bank of America hit with $1.2bn fine for money laundering failings: news

Bank of America Hit with $1.2 Billion Fine for Anti-Money Laundering and Sanctions Failings

The U.S. Department of the Treasury has penalized Bank of America with $1.2 billion in fines after finding widespread, systemic failures in the bank’s anti-money laundering (AML) controls and sanctions compliance programs. The enforcement action ranks as the third-largest penalty ever assessed by the Treasury Department, trailing only historic settlements with Binance and TD Bank.

Key Details of the Enforcement Action

• Total Financial Penalties: The Financial Crimes Enforcement Network (FinCEN) assessed the headline $1.2 billion civil money penalty. Concurrently, the Office of the Comptroller of the Currency (OCC) levied a record $750 million penalty (credited toward the FinCEN total), and the Office of Foreign Assets Control (OFAC) settled a related action for $11.6 million.

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• Bank Secrecy Act (BSA) Violations: Regulators found that the nation’s second-largest financial institution willfully violated the Bank Secrecy Act by neglecting due diligence requirements on correspondent banking accounts maintained for foreign institutions and chronically delaying the filing of Suspicious Activity Reports (SARs).

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• High-Risk Transaction Backlogs: Bank of America was found to have delayed reporting on more than $5 billion in suspicious transactions. Over $1 billion of these unreported funds involved high-priority national security threats, notably illicit financial flows connected to Chinese money-laundering networks, organized fraud, and trade-based laundering along the U.S. southwest border.

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• Sanctions Compliance Breaches: The OFAC settlement resolved hundreds of apparent violations involving transactions linked to sanctioned jurisdictions and programs, including regimes in Russia and Iran, as well as counter-narcotics and global counter-terrorism sanctions.

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Regulatory Fallout and Market Impact

Federal regulators underscored that critical anti-money laundering frameworks apply equally to the largest institutions in the U.S. financial system. In addition to paying the multi-agency financial penalties, Bank of America is required to implement substantial compliance overhauls, overhaul its transaction-monitoring infrastructure, and submit to heightened regulatory oversight and independent verification to resolve the underlying operational defects.