WASHINGTON, D.C. — The U.S. Department of the Treasury announced more than $1.21 billion in penalties against Bank of America on October 13, the second-largest bank in the United States, for violations of anti-money laundering and sanctions laws.
The coordinated actions mark the third-largest penalty in Treasury’s history and the largest ever imposed by the Office of the Comptroller of the Currency (OCC). The Financial Crimes Enforcement Network (FinCEN) assessed a $1.2 billion penalty for the bank’s failure to mitigate and report priority national security risks, including Chinese money laundering networks and illicit finance along the southwest border. The OCC assessed a concurrent $750 million civil money penalty — its largest on record — for a deficient and ineffective Bank Secrecy Act/anti-money laundering program; that amount is credited toward the FinCEN total. OFAC separately announced an $11.6 million settlement over 475 apparent violations of sanctions programs targeting Iran, Russia, Belarus, Burma, Somalia, narcotics, and global terrorism.
As part of the FinCEN resolution, Bank of America admitted it willfully violated the Bank Secrecy Act by failing to maintain an adequate AML program, conduct required due diligence on correspondent accounts for foreign financial institutions, and file suspicious activity reports. The bank failed to timely report more than $5 billion in suspicious transactions to FinCEN, with more than $1 billion of that activity tied to national security-related and other priority illicit finance risks, including transactions indicative of Chinese money laundering networks, fraud, and potential trade-based money laundering with a substantial nexus to the southwest border.
Treasury Secretary Scott Bessent said financial institutions sit on the front lines of economic and national security.
“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,” Bessent said. “Today’s actions send a clear message that even the biggest financial institutions are not above the law.”
Bank of America, with roughly $3.4 trillion in total assets as of late September 2026 and a market capitalization near $350 billion, is the second-largest U.S. bank and among the largest globally. The $1.21 billion total, while historic in scale for Treasury and the OCC, amounts to a small fraction of the bank’s balance sheet — less than 0.04 percent of assets — and roughly one-third of 1 percent of its market value.
The bank’s transaction monitoring system failed to properly oversee trillions in activity, producing large numbers of late suspicious activity reports involving billions of dollars, according to OCC. It knew for years of failures to escalate potentially suspicious activity to investigators but did not correct them. Problems continued more than a year after a December 2024 OCC cease-and-desist order, including a systemic gap that allowed potential trade-based money laundering transactions to proceed.
In a statement to Reuters, a Bank of America spokesperson said: “Financial crime compliance is serious, and we are responsible for getting it right. We have 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 bank indicated the penalties would produce a non-tax-deductible $1.2 billion charge reducing third-quarter net income by approximately 17 cents a share.
The FinCEN consent order requires Bank of America to work with a third party on a lookback to identify and report previously undetected suspicious transactions, and to undergo independent reviews of its suspicious activity monitoring, customer due diligence, foreign correspondent due diligence, and data governance framework, with particular attention to risks involving the U.S. southwest border and cartels, Iran, and Russia.
The $1.2 billion FinCEN penalty stands as the largest anti-money-laundering enforcement action against a major U.S. bank during Sec. Bessent’s tenure at the Treasury; the OCC had separately assessed a $350 million civil money penalty against American Express National Bank earlier in October 2026 for AML program deficiencies that left roughly $13 billion in suspected trade-based money laundering activity insufficiently reported over a decade.
Author: Mario Lotmore
