Bank of America hit with $1.2 billion penalty over money laundering allegations

Por Courtenay Brown — Axios

The Treasury Department on Tuesday announced more than $1.2 billion in penalties against Bank of America for years of failures to report suspicious transactions and address shortcomings in its anti-money-laundering program.

Why it matters: The action includes the third-largest penalty in Treasury history.

What they’re saying: “Today’s actions send a clear message that even the biggest financial institutions are not above the law,” Treasury Secretary Scott Bessent said in a press release.

The big picture: The civil action comes less than a week after federal regulators fined American Express $350 million over similar failures to detect and report suspected money laundering.

Zoom in: Bank of America admitted to willfully violating federal anti-money-laundering laws — including requirements to maintain adequate safeguards and report suspicious transactions.

• Regulators said the bank failed to properly monitor trillions of dollars in transactions, resulting in more than $5 billion in suspicious activity that was either unreported or reported late.
• More than $1 billion involved potential national security and other high-priority risks — including Chinese money-laundering networks and suspected trade-based money laundering linked to the U.S.-Mexico border, regulators said.

Of note: The Office of the Comptroller of the Currency also assessed a $750 million civil penalty, the largest in the agency’s history.

• Treasury also announced an $11.6 million settlement with Bank of America over hundreds of apparent violations of U.S. sanctions, including those targeting Russia and Iran.

Flashback: Bank of America has been working to address deficiencies in its anti-money-laundering program since a December 2024 regulatory order. But regulators said significant problems persisted.

• Officials said the bank prioritized revenue while limiting compliance resources — at times relying on law enforcement and other outside sources to identify suspicious activity.

The other side: In a statement, Bank of America said it has invested billions of dollars in technology and dedicated thousands of employees to fighting financial crime.

• “Our team is far along with and committed to completing the work required to address the issues raised by our regulators.”

What to watch: Bank of America reports third-quarter earnings Wednesday. The bank said it will record a $1.2 billion, non-tax-deductible charge in those results.

• The bank said costs associated with its ongoing efforts to fix compliance problems are already reflected in its expenses.

Editor’s note: This story has been updated with additional details.

Fonte: Axios