Bank of America has been fined over $1.2 billion for violating anti-money-laundering and sanction laws.
On Tuesday, October 13, the U.S. Department of the Treasury handed down the fine, stating that Bank of America had failed to report over $5 billion in “suspicious activity” to the Financial Crimes Enforcement Network (FinCEN).
Over $1 billion of the activity was “national security-related and other priority illicit finance risks, including suspicious transactions indicative of Chinese Money Laundering Networks, fraud, and potential trade-based money laundering with a substantial nexus to the southwest border,” the Treasury stated in its announcement.
“When a bank of this size fails to meet its anti-money laundering and sanctions obligations, the consequences extend far beyond its own walls, exposing the entire U.S. financial system to significant illicit finance risk,” Treasury Secretary Scott Bessent said in a statement.
Third largest in history
The $1.2 billion fine is the Treasury Department’s third largest in its history. In 2023, it fined Binance $3.4 billion and, a year later, fined TD Bank $1.3 billion.
The total figure includes a $750 million fine from the Office of the Comptroller of the Currency (OCC)—the largest in its history—for having an “ineffective” anti-money laundering program.
It also comprised an $11.6 million settlement agreement with the Office of Foreign Assets Control (OFAC). While this is the smallest part of the fine, the 475 “apparent violations of sanction programs” are quite notable. These sanctions were against Russia, Iran, global terrorism, and narcotics, among other significant areas.
According to the Treasury, “these apparent violations occurred when Bank of America channeled correspondent banking payments through blocked banks due to technical and human error.”
“We are responsible for getting it right”
Reached for comment by Fast Company, a Bank of America spokesperson said the financial services giant has invested “billions of dollars” in financial crime and is committed to addressing the issues raised by U.S. regulators.
“Financial crime compliance is serious, and we are responsible for getting it right,” the spokesperson said in a statement. “We worked with regulators to reach these penalty resolutions stemming from violations cited in the previously reported 2024 OCC Consent Order and FinCEN’s investigation.”
Stock down after third-quarter earnings
Shares of Bank of America Corporation (NYSE: BAC) were down more than 8% on Wednesday following the fine and an early-morning earnings report.
The company reported $30.12 billion in revenue for quarter three, falling short of Wall Street’s predicted $30.69 billion, according to consensus estimates cited by CNBC.
“Our third-quarter results will include a non-tax-deductible charge of $1.2 billion impacting net income by approximately 17 cents per share,” Bank of America’s statement said. “We have already dedicated substantial personnel and resources to our ongoing remediation efforts, and those costs are in the current expense base.”