Bank of America faces .2 billion in penalties for failures in money laundering compliance
The U.S. Treasury Department has levied significant penalties against Bank of America, totaling approximately .21 billion, following serious violations relating to anti-money laundering and U.S. sanctions compliance. The regulatory action marks a noteworthy moment in the banking sector, reflecting the increasing scrutiny financial institutions face concerning their compliance practices.
Investigations revealed that Bank of America failed to adequately review trillions of dollars in suspicious transactions while being aware of substantial compliance deficiencies. This oversight not only undermines regulatory frameworks designed to combat financial crime but also poses risks to national security. According to the Treasury, the bank failed to timely report over billion in potentially suspicious activities, which included connections to high-risk issues such as money laundering networks.
The penalties represent the largest fine issued by the Office of the Comptroller of the Currency (OCC) to date, and they rank third in the history of the Financial Crimes Enforcement Network (FinCEN). A .2 billion assessment by FinCEN includes a credit for a 0 million civil penalty previously imposed by the OCC, as well as a separate settlement of .6 million with the Office of Foreign Assets Control (OFAC).
In a formal response, Bank of America indicated that these penalties will result in a significant financial impact, amounting to a .2 billion non-tax-deductible charge expected in its third-quarter financial results. The bank acknowledged the compliance violations and emphasized its commitment to enhancing its anti-money laundering capabilities by investing billions in technology and increasing staffing dedicated to mitigating financial crime.
Despite taking steps to address identified deficiencies, the OCC’s findings suggested that the bank continued to be mired in operational failures. In December 2024, the OCC had issued a cease-and-desist order directing the bank to fortify its anti-money laundering program. However, regulators found ongoing issues that allowed potential instances of trade-based money laundering to evade detection.
As part of the enforcement measures, Bank of America will collaborate with an independent third party to scrutinize previously unnoticed suspicious transactions and undergo further audits of its anti-money laundering controls. The financial institution has also committed to enforcing stringent additional measures concerning employee training and compliance audits, ensuring alignment with federal regulatory standards.
This ruling not only holds Bank of America accountable but also underscores the broader trend toward heightened regulatory vigilance in the financial services industry, serving as a cautionary tale for other institutions regarding the importance of compliance.
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