Why Bank of America Was Fined USD 1.2 Billion by the US Treasury Department
Bank of America has been hit with over USD 1.21 billion in penalties by the US Treasury Department for anti-money laundering and sanctions violations. The nation's second-largest bank admitted to Bank Secrecy Act violations after failing to report more than USD 5 billion in suspicious transactions and restricting compliance resources.
The US Treasury Department has penalised Bank of America with more than USD 1.21 billion in fines for anti-money laundering failures and sanctions violations, following findings that the institution failed to report billions of dollars in suspicious financial transactions. The penalties, announced on Tuesday, October 13, mark the third-largest fine in the history of the Treasury Department. Bank of America, the second-largest bank in the United States, admitted to willful violations of the Bank Secrecy Act.
Findings and Investigation Details
Regulatory investigations revealed that the financial institution prioritised revenue generation while restricting compliance resources. Consequently, suspicious activities remained uninvestigated for extended periods, with the bank relying heavily on law enforcement inquiries and referrals from other financial institutions rather than its own internal detection systems. Bank of America Vice President Erin Piacenti Fatally Stabbed in New York’s Times Square.
According to federal regulators, more than USD 1 billion in promptly unreported transactions featured indicators of Chinese money-laundering networks, fraud, potential trade-based money laundering, and activity connected to the US southwest border. US Treasury Secretary Scott Bessent emphasised the broader systemic impact of the violations: “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.”
Regulatory Penalties and Corrective Mandates
The enforcement actions involve multiple federal regulatory bodies issuing substantial penalties and corrective mandates:
- FinCEN Penalty: The Financial Crimes Enforcement Network imposed a USD 1.2 billion penalty and ordered the bank to review historical transactions for previously missed suspicious activity, alongside independent reviews of its monitoring systems, customer checks, and foreign financial institution accounts.
- OCC Assessment: The Office of the Comptroller of the Currency assessed a USD 750 million penalty - the largest in its history - after determining the bank failed to monitor trillions of dollars in transactions despite prior compliance orders issued in December 2024.
- OFAC Settlement: A USD 11.6 million settlement with the Office of Foreign Assets Control addressed 475 apparent sanctions violations involving technical screening errors and outdated sanctions lists that permitted payments linked to restricted parties in Russia, Iran, narcotics trafficking, and terrorism.
Secretary Bessent noted the severity of the enforcement action, stating: “Today's actions send a clear message that even the biggest financial institutions are not above the law.”
(The above story first appeared on LatestLY on Oct 14, 2026 07:35 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).
