Bank of America hit with $1.2 billion penalty over money laundering allegations
Axios · LC · trust 62/100
The Treasury Department on Tuesday announced more than $1.2 billion in penalties against Bank of America for years of failures to report suspicious transactions and address shortcomings in its anti-money-laundering program. Why it matters: The action includes the third-largest penalty in Treasury history. What they're saying: "Today's actions send a clear message that even the biggest financial institutions are not above the law," Treasury Secretary Scott Bessent said in a press release . The big picture: The civil action comes less than a week after federal regulators fined American Express $350 million over similar failures to detect and report suspected money laundering. Zoom in: Bank of America admitted to willfully violating federal anti-money-laundering laws — including requirements to maintain adequate safeguards and report suspicious transactions. Regulators said the bank failed to properly monitor trillions of dollars in transactions, resulting in more than $5 billion in suspicious activity that was either unreported or reported late. More than $1 billion involved potential national security and other high-priority risks — including Chinese money-laundering networks and suspected trade-based money laundering linked to the U.S.-Mexico border, regulators said. Of note: The Office of the Comptroller of the Currency also assessed a $750 million civil penalty, the largest in the agency's history. Treasury also announced an $11.6 million settlement with Bank of America over hundreds of apparent violations of U.S. sanctions, including those targeting Russia and Iran. Flashback: Bank of America has been working to address deficiencies in its anti-money-laundering program since a December 2024 regulatory order. But regulators said significant problems persisted. Officials said the bank prioritized revenue while limiting compliance resources — at times relying on law enforcement and other outside sources to identify suspicious activity. The other side: In a statement, Bank of America said it has invested billions of dollars in technology and dedicated thousands of employees to fighting financial crime. "Our team is far along with and committed to completing the work required to address the issues raised by our regulators." What to watch: Bank of America reports third-quarter earnings Wednesday. The bank said it will record a $1.2 billion, non-tax-deductible charge in those results. The bank said costs associated with its ongoing efforts to fix compliance problems are already reflected in its expenses. Editor's note: This story has been updated with additional details.
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