OCC’s $750 million Bank of America penalty is largest in regulator’s history
The US Treasury Department announced Tuesday that Bank of America has been fined $1.21 billion for widespread failures to detect potential money laundering and other illicit activity — the third-largest penalty in the department’s history.
Treasury Secretary Scott Bessent said in a statement that Bank of America’s failings exposed “the entire US financial system to significant illicit finance risks.” He added: “When a bank of this size fails to meet its anti-money laundering and sanctions obligations, the consequences extend far beyond its own walls.”
The penalty stems from the bank’s failure to report more than $5 billion in suspicious activity to the government, including $1 billion that Treasury said posed national-security-related and other priority illicit-finance risks. In its findings, Treasury said the bank “prioritized its revenues” in building compliance programs and over-relied on inquiries from outside parties such as law enforcement and other financial institutions instead of its own internal controls.
Under the consent order, Bank of America is required to hire an independent third party to review past transactions, identify suspicious activity the bank failed to detect at the time, and report those transactions to the Financial Crimes Enforcement Network (FinCEN).
A Bank of America spokesperson said in a statement that “financial crime compliance is serious, and we are responsible for getting it right.” The spokesperson added that the bank has “invested billions of dollars in technology and dedicated thousands of employees to combat financial crime, and our team is far along with and committed to completing the work required to address the issues raised by our regulators.”
The penalty will produce a $1.2 billion non-tax-deductible charge in the bank’s third-quarter results, due for release Wednesday, reducing net income by approximately 17 cents per share. Analysts had estimated adjusted earnings per share of $1.10, according to mean estimates compiled by LSEG, though that figure excludes one-time items such as the fine. Shares of Bank of America fell 2.7% in after-hours trading after closing the regular session down 1.1%.
UBS analyst Erika Najarian said in a note that the penalty is likely to add to negative investor sentiment and raise concerns about higher expenses and whether Bank of America can maintain its roughly $6 billion quarterly share-buyback pace. “We think shares likely underperforming at open,” Najarian said. She noted there was no asset cap — a regulatory penalty that would have limited how large the bank could grow.
As part of the overall action, the Office of the Comptroller of the Currency levied a $750 million civil penalty against the lender, the largest ever for that regulator. The OCC cited failures to address shortcomings in Bank of America’s anti-money-laundering programs that were identified as part of a 2024 cease-and-desist order from the watchdog. The regulator said the bank’s compliance program was “deficient and ineffective” and that its transaction-monitoring system caused the bank to delay filing suspicious-activity reports on billions of dollars of transactions.
Separately, the bank paid $11.6 million to the Office of Foreign Assets Control for more than 400 apparent violations of numerous sanctions programs. Treasury said the bank mistakenly processed millions of dollars in payments that violated sanctions programs targeting countries including Russia and Iran.
The fine comes days after American Express was also hit with a $350 million penalty for similar anti-money-laundering shortcomings.