US fines Bank of America $1.2b for money laundering lapses

US regulators fined Bank of America more than $1.2 billion for anti-money laundering and sanctions breaches, the Treasury Department said on Oct 13.

The second biggest US bank failed to properly report more than $5 billion in suspicious transactions, Treasury said. Some activity was indicative of Chinese money laundering networks and illicit finance around the south-west US border, according to the department.

The penalties

The overall charge includes $1.2 billion assessed by Treasury's Financial Crimes Enforcement Network, including a $750 million civil penalty from the Office of the Comptroller of the Currency. The Treasury's Office of Foreign Assets Control also announced an $11.6 million settlement over apparent violations of numerous sanctions programmes, including on Iran, Russia, narcotics, and global terrorism.

Comptroller of the Currency Jonathan Gould said the OCC penalty is its biggest civil money penalty assessed against a bank, due to what he called 'egregious and continued' violations of the Bank Secrecy Act.

Regulators published a consent order requiring Bank of America to work with a third party to identify and report suspicious transactions that went undetected, and to undergo an independent review of its monitoring and due diligence. The bank was already under a December 2024 cease-and-desist order, but Treasury noted it failed to prioritise compliance despite that order.

What the bank says

A Bank of America spokesperson told AFP results would include a $1.2 billion charge, weighing on net income by around 17 cents per share. The bank said it is committed to finishing the work needed to address regulators' concerns.

Bank of America shares fell 2.6% in after-hours trading after Treasury's announcement.

The takeaway: A major US bank got a $1.2b penalty after missing $5b in suspicious flows, and regulators say it kept failing even after a 2024 order.