Bank of America hit with $1.21 billion anti-money-laundering fine

U.S. Treasury regulators have fined Bank of America $1.21 billion for widespread shortcomings in its anti-money-laundering controls. The penalty, the third-largest in Treasury history, stems from the bank’s failure to file suspicious-activity reports on more than $5 billion of transactions, including about $1 billion deemed to pose national-security and other priority illicit-finance risks.

Treasury Secretary Scott Bessent said, > "Financial institutions are on the front lines of protecting our economic and national security. 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 consent order requires the lender to engage an independent third party to review past transactions, identify missed suspicious activity and report the findings to FinCEN. The Office of the Comptroller of the Currency also levied a $750 million civil penalty, the largest ever issued by the agency, citing deficiencies in the bank’s compliance program and delayed filing of reports.

Bank of America’s spokesperson responded that the institution has invested billions in technology and staff to combat financial crime and is working to meet the regulator’s requirements. The spokesperson noted that the upcoming third-quarter earnings release will include a non-tax-deductible $1.2 billion charge, reducing net income by roughly 17 cents per share.

Analysts expect adjusted earnings per share of $1.10, excluding one-off items such as the fine. Following the announcement, the bank’s shares fell 2.7% in after-hours trading. UBS analyst Erika Najarian warned that the penalty could weigh on investor sentiment and raise questions about the bank’s ability to sustain its quarterly share-buyback program.