Bank of America Fined $1.2 Billion by Treasury Department for Money Laundering Violations

The U.S. Treasury Department on Tuesday announced it was imposing a more than $1.2 billion fine on Bank of America, the nation's second-largest bank, accusing it of violating anti-money laundering and sanctions laws.

Treasury said the bank failed to mitigate and report "priority national security risks, including Chinese Money Laundering Networks and illicit finance along the southwest border."

"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," said Treasury Secretary Scott Bessent in a statement. "Today's actions send a clear message that even the biggest financial institutions are not above the law."

Bank of America said it was working with regulators to reach penalty resolutions. "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," a spokesperson said.

The fine is the third-largest ever imposed by the Treasury Department's Financial Crimes Enforcement Network (FinCEN), following a record $3.4 billion fine against Binance in 2023 and a $1.3 billion penalty against TD Bank in 2024.

As part of the total fine, $750 million will go to the Office of the Comptroller of the Currency (OCC) as a civil penalty, making it the largest OCC penalty in history. Bank of America admitted that it willfully failed to have proper safeguards in place and failed to report suspicious activity, the Treasury Department said.

The bank failed to respond to red flags involving suspicious customers, including those with ties to narcotics trafficking, even after compliance personnel escalated concerns. Bank of America processed more than $9 trillion in transactions during the period under review.

CNN reported that the bank's sanctions-screening filter had a design flaw preventing it from flagging certain prohibited transactions — when a transaction matched an individual's name and date of birth on the Treasury's sanctions list, the system did not escalate it properly. These breakdowns affected U.S. sanctions programs including those targeting Iran and counter-narcotics efforts.

The bank's stock fell more than 2.5% in after-hours trading after the fine was announced. Bank of America said the penalty will impact third-quarter earnings by approximately 17 cents per share.

Reporting by CNN. Read the original report: Bank of America fined $1.2 billion by Treasury Department for money laundering and sanctions laws violations.