Bank Of America Fined $1.21 Bln Over Money Laundering Compliance Failures

The US Treasury Department imposed a substantial $1.2 billion fine on Bank of America on Tuesday for anti-money laundering failures, according to a statement. The fine, the third-largest ever issued by the department, highlights the consequences faced by large financial institutions for failing to meet their anti-money laundering and sanctions obligations, which can extend to the entire U.S. financial system, Treasury Secretary Scott Bessent noted.

The bank, the second-largest in the country, also settled with the Treasury's Office of Foreign Assets Control over alleged violations of multiple sanctions programs, including those on Iran, Russia, narcotics, and global terrorism, according to the statement. The Financial Crimes Enforcement Network (FinCEN) imposed the penalty for Bank of America's failure to mitigate and report priority national security risks, such as Chinese money laundering networks and illicit finance along the southwestern border.

The bank failed to report over $5 billion in suspicious transactions on time, including $1 billion linked to national security and other priority financial crime risks, the Treasury revealed. This penalty included a $750 million fine from the US Office of the Comptroller of the Currency, the largest ever imposed by the federal banking regulator.

Bank of America admitted to willfully violating the 1970 Bank Secrecy Act, which mandates banks to assist in detecting and preventing money laundering, the statement added. The bank emphasized its commitment to addressing the issues raised by regulators and its investment in technology and personnel to combat financial crime. This action marks the third-largest penalty issued by the Treasury Department, following a $4 billion settlement with Binance in 2023 and a $3 billion settlement with TD Bank the previous year, both part of the Biden administration's efforts to combat money laundering and improve compliance in the cryptocurrency industry.