US Treasury announces $1.2 bn penalty against Bank of America

On Tuesday, the U.S. Treasury Department announced it would impose a $1.2 billion penalty on Bank of America for alleged violations of anti-money laundering and sanctions laws. This marks the third-largest fine in the department's history. Treasury Secretary Scott Bessent emphasized that such failures by large banks pose significant risks to the U.S. financial system.

Additionally, Bank of America settled with the department's Office of Foreign Assets Control for $11.6 million over sanctions program violations, including those involving Iran, Russia, narcotics, and terrorism. The Financial Crimes Enforcement Network (FinCEN) attributed the $1.2 billion penalty to the bank's failure to mitigate and report national security risks, particularly Chinese money laundering networks and illicit finance along the southwest border.

This includes $750 million going to the U.S. Office of the Comptroller of the Currency, the largest fine ever issued by that agency. Bank of America admitted to willfully violating the 1970 Bank Secrecy Act, which requires banks to assist in detecting and preventing money laundering. The department stated it has invested significantly in technology and personnel to combat financial crime and is committed to addressing the issues highlighted by regulators.

This penalty ranks third in size among all Treasury Department actions, following a $4 billion settlement with Binance in 2023 and a $3 billion settlement with Canada's TD Bank in 2022.