US Treasury fines Bank of America $1.21 billion for compliance failures

Treasury says bank prioritized revenue over compliance

The U.S. Treasury on Tuesday imposed $1.21 billion in penalties on Bank of America, the nation’s second-largest bank, for failing to report more than $5 billion in suspicious transactions in a timely manner and for an anti-money laundering compliance program the agency called deficient. The action, the third-largest penalty in Treasury history, included the largest civil penalty ever assessed by the Office of the Comptroller of the Currency.

The penalties came after a 2024 consent order failed to change the bank’s compliance practices, the Treasury said, and FinCEN reported that Bank of America admitted to willfully violating the Bank Secrecy Act.

The action includes three separate penalties. FinCEN assessed a $1.2 billion fine for failing to report suspicious activity, the third-largest penalty the Treasury has imposed. The Office of the Comptroller of the Currency assessed its largest-ever $750 million civil penalty for the bank’s compliance program, and the Office of Foreign Assets Control added an $11.6 million settlement for apparent violations of sanctions programs involving Iran, Russia, narcotics, and global terrorism. FinCEN agreed to count the OCC civil penalty toward its $1.2 billion fine, so the combined total is $1.21 billion, according to a 95-page consent order.

The Treasury said more than $1 billion of the unreported suspicious transactions involved national security-related and other priority illicit financial risks, including transactions indicative of Chinese money laundering networks, fraud, and potential trade-based money laundering with a “substantial nexus to the southwest border.”

“Financial institutions are on the front lines of protecting our economic and national security,” Treasury Secretary Scott Bessent said in a statement. “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.”

FinCEN said Bank of America admitted to willfully violating the Bank Secrecy Act through its compliance failures, and the Treasury said that as the issues arose, the bank “prioritized its revenue and worked to minimize the impact on its required compliance resources.”

The action follows a 2024 OCC consent order that was supposed to address the same compliance issues. A Bank of America spokesperson told UPI that the penalties stem from violations cited in that order and the FinCEN investigation, and that the bank is “far along with and committed to completing the work required to address the issues raised by our regulators.”

But the Treasury said that even after agreeing to the 2024 order, the bank “still failed to prioritize” compliance with money-laundering monitoring responsibilities.

CNN reported that Bank of America’s software had a design flaw that kept it from screening prohibited transactions.

Bank of America reported a third-quarter profit of $6.9 billion, down about 17% from a year earlier, with earnings taking a hit from the $1.2 billion charge. Shares of the bank dropped 7.5% on Wednesday, CNN reported.

“Today’s actions send a clear message that even the biggest financial institutions are not above the law,” Bessent said in a statement.

A Bank of America spokesperson said in an emailed statement that the bank “worked with regulators to reach these penalty resolutions.” “Financial crime compliance is serious, and we are responsible for getting it right,” the spokesperson said. The bank has invested billions of dollars in technology and dedicated thousands of employees to financial crime compliance, according to the spokesperson, and will continue to support law enforcement investigations and report hundreds of thousands of suspicious activity reports each year.

Dennis Kelleher, the CEO of Better Markets, said in a statement that the $1.2 billion fine was small compared with Bank of America’s revenue.

“Banks don’t break laws; people do, and until those people—including most importantly executives and supervisors—are personally and meaningfully punished by firings, prosecution, fines and being barred from employment in the industry, these crimes are not going to be stopped,” Kelleher said.

The two largest penalties the Treasury has imposed include a $3.4 billion fine against Binance in 2023 and a $1.3 billion penalty against TD Bank in 2024. Both of those fines came with charges; no charges have been brought against Bank of America in connection with the penalties announced Tuesday.