Bank of America fined $1.2 billion by Treasury Department for anti-money laundering and sanctions law violations

Bank of America Fined $1.2 Billion by Treasury

Earthguardiansonline.com – Bank of America fined 1.2 billion dollars is the outcome of a Treasury Department enforcement action over anti-money-laundering and sanctions compliance failures. The penalties, announced Tuesday, total more than $1.2 billion.

The case is among the largest ever brought by the Treasury Department’s Financial Crimes Enforcement Network, or FinCEN. It involves the nation’s second-largest bank, which processed more than $9 trillion in transactions in the previous year.

Treasury said Bank of America failed to adequately identify, manage and report significant illicit-finance risks. Those risks included Chinese money-laundering networks and suspicious activity connected to the US southwest border.

“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 risks,” Treasury Secretary Scott Bessent said.

Record Penalty for the OCC

Of the total Bank of America fined 1.2 billion settlement, $750 million will go to the Office of the Comptroller of the Currency as a civil penalty. Treasury described it as the largest penalty in the OCC’s history.

Treasury said the bank acknowledged that it knowingly failed to maintain appropriate safeguards and did not submit required suspicious-activity reports. The agency also said the bank did not respond quickly enough to warning signs involving potentially suspicious customers, including people with alleged narcotics-trafficking ties.

Compliance employees had raised concerns, according to Treasury, but the bank did not take sufficiently timely or meaningful action. More than $5 billion in suspicious activity consequently went unreported, the agency said.

Anti-money-laundering rules require financial institutions to monitor unusual transactions and report qualifying activity. Such reports do not establish that a customer committed a crime, but they can help law enforcement trace possible criminal proceeds, terrorism financing, sanctions evasion and other prohibited activity.

Sanctions Screening Concerns

The enforcement action also addressed a problem with Bank of America’s sanctions-screening system. Treasury found that the filter did not properly prioritize some transactions that could involve people on the government’s sanctions list.

When a payment matched both the name and date of birth of a person on Treasury’s sanctions list, the system did not designate it as high priority. That could delay the review of payments requiring immediate scrutiny.

Treasury sanctions lists include thousands of people and organizations, including alleged terrorists, narcotics traffickers and sanctioned businesses. US people and companies are generally barred from transacting with listed parties, and associated assets may be blocked.

Treasury said the weaknesses affected US sanctions objectives, including Iran-related and counter-narcotics programs. In an institution processing a vast volume of payments, accurate matching and escalation systems are essential to identifying potentially prohibited transactions.

How the Fine Compares

The Bank of America fined 1.2 billion action ranks third among FinCEN’s largest penalties. FinCEN’s largest fine remains the $3.4 billion penalty imposed on Binance in 2023, followed by a $1.3 billion penalty against TD Bank in 2024.

Those earlier cases included Justice Department charges. No related Justice Department action was announced with the Bank of America penalties.

The case comes as the second Trump administration has increased attention on major banks and the practice often called “debanking.” The administration has addressed the issue through executive orders, while President Donald Trump earlier this year filed a personal $5 billion lawsuit against JPMorgan Chase over allegations that the bank closed his account for political reasons.

FAQ: What the Bank of America Penalty Means

Why was Bank of America fined $1.2 billion?

Treasury said the bank committed serious anti-money-laundering and sanctions compliance violations, including failures to maintain safeguards, file required suspicious-activity reports and prioritize certain sanctions-related payment alerts.

Does the penalty mean customers did anything wrong?

No. The action concerns the bank’s compliance systems and reporting obligations. Suspicious-activity reports are used to alert authorities to potential risks and do not by themselves prove that a customer engaged in illegal conduct.

Will the fine affect Bank of America customers?

The announced action focuses on regulatory penalties and compliance failures. Treasury’s announcement did not state that customers’ accounts or deposits would be affected by the settlement.