Bank of America money laundering fine topped more than $1.2 billion on Tuesday after regulators said the bank failed to properly monitor trillions of dollars in transactions and report more than $5 billion in suspicious activity. The penalties add a charge to the bank’s third quarter results and come as it prepares for Wednesday morning earnings.
Scott Bessent on Bank of America
Scott Bessent said, "Even the biggest financial institutions are not above the law" after the Treasury Department announced the action. FinCEN imposed a $1.2 billion penalty, the third-largest fine in the Treasury Department’s history, while the OCC added a $750 million penalty, its largest ever, plus an $11.6 million sanctions settlement.
The OCC penalty will be credited against FinCEN’s assessment rather than stacked on top of it. Bank of America said it will include a non-tax-deductible charge of $1.2 billion in its third quarter results, a hit expected to reduce net income by about 17 cents per share.
FinCEN and OCC findings
Regulators said the failures ran through transaction monitoring systems, customer due diligence, and internal oversight. FinCEN said the bank admitted to willfully violating the Bank Secrecy Act and effectively outsourced substantial parts of suspicious activity detection to law enforcement and other financial institutions.
More than $1 billion of the unreported suspicious transactions involved national security-related and other priority illicit finance risks. The Treasury Department said some activity was potentially tied to Chinese money-laundering networks, narcotics trafficking, and fraud, and that suspicious transactions were left uninvestigated for extended periods.
December 2024 order
Nearly two years after a December 2024 cease-and-desist order, the latest penalties show regulators were not satisfied with Bank of America’s progress. The OCC said the bank failed to make sufficient progress after the earlier enforcement action, and Jonathan Gould called the bank’s poor response to its Bank Secrecy Act deficiencies unacceptable.
Bank of America said it has invested "billions of dollars in technology" and deployed "thousands of employees to combat financial crime," but regulators said the breakdowns were widespread across multiple control systems. The bank’s stock fell more than 2% after markets closed on Tuesday, leaving the new review of previously undetected suspicious transactions and independent compliance assessments as the next test.
