Bank of America Fined $1.2 Billion by Treasury for Anti-Money Laundering Safeguard Failures

US Treasury Fines Bank of America $1.2 Billion for Anti-Money Laundering Violations

• Massive $1.2 Billion Penalty: The US Treasury Department has imposed a $1.2 billion fine on Bank of America (BofA) for violating anti-money laundering (AML) and sanctions laws.

• Historic OCC Fine: Out of the total penalty, $750 million will be directed to the Office of the Comptroller of the Currency (OCC), marking the largest civil penalty in the OCC's history.
  

• Systemic Security Failures: BofA admitted to willfully lacking proper safeguards, resulting in a failure to report over $5 billion in suspicious activities last year. The Treasury noted this exposed the US financial system to significant risks, including illicit finance along the southwest border and Chinese money laundering networks.

• Sanctions Filter Flaw: A critical design flaw in the bank's sanctions-screening filter prevented it from prioritizing high-risk transactions. Matches for names and birth dates on the Treasury’s sanctions list (which includes terrorists and narcotics traffickers) were not properly flagged.

• Third-Largest FinCEN Fine: This penalty is the third-largest ever levied by the Financial Crimes Enforcement Network (FinCEN), trailing only Binance ($3.4 billion) and TD Bank ($1.3 billion). It is also the largest AML penalty imposed on a major bank under the current administration's Treasury Department.

• Financial Impact on BofA: A Bank of America spokesperson confirmed the penalty will result in a $1.2 billion non-tax-deductible charge, reducing its third-quarter net income by roughly 17 cents per share. The bank's stock (BAC) fell more than 2.5% in after-hours trading following the news.

• Ongoing Remediation: BofA stated it is working closely with regulators, has dedicated thousands of employees to combat financial crime, and has already factored the costs of ongoing compliance remediation into its current expenses.

• Calls for Stricter Accountability: Consumer advocates and former Treasury officials highlighted that while the fine is massive, it is still a fraction of the bank's total revenue. Critics advocate for harsher personal penalties, including firing or prosecuting executives responsible for compliance failures.