Bank of America hit with $1.2 billion anti-money-laundering fine

The U.S. Treasury Department fined Bank of America $1.2 billion (£910 million) for not detecting and reporting over $5 billion in suspicious activity, $1 billion of which posed national security and illicit-finance risks. The Treasury said the bank did not flag transactions that may have involved Chinese money-laundering networks or trade-based laundering tied to the U.S. southwest border.

Bank of America told the BBC that it is "far along with and committed to completing the work required to address the issues raised by our regulators" and that its third-quarter results will include a non-tax-deductible charge of $1.2 billion, reducing net income by about 17 cents per share. The bank added that it has allocated substantial personnel and resources to remediation, and that these costs are reflected in the current expense base.

Treasury Secretary Scott Bessent said, "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 US financial system to significant illicit finance risks."

The Treasury noted that Bank of America relied heavily on inquiries from external parties such as law enforcement and other financial institutions instead of its own internal controls, effectively outsourcing a substantial portion of its detection and reporting duties. As part of the settlement, the bank admitted it "willfully violated" the Bank Secrecy Act by failing to maintain a compliant anti-money-laundering program, conduct required due diligence on foreign correspondent accounts, and file suspicious activity reports. The penalty includes fines from the Office of the Comptroller of the Currency and the Office of Foreign Assets Control.