The U.S. Department of the Treasury announced on October 13 that it had fined Bank of America (BofA) more than $1.21 billion for the bank’s longstanding failure to effectively enforce anti-money laundering (AML) and sanctions compliance requirements. This is the third-largest fine in the Treasury Department’s history and the largest fine ever issued by the OCC.
Regulators found that BofA failed to report more than $5 billion in suspicious transactions in a timely manner. More than $1 billion of those transactions involved national security risks, including Chinese money-laundering networks, illicit money flows along the U.S. Southwest border, and potential drug transactions. More remarkably, the OCC had ordered BofA to fix its AML systems in 2024, but two years later, the bank still had not resolved many key issues.
The penalties include:
- FinCEN: $1.2 billion for failing to meet its obligations to monitor for money laundering and report suspicious transactions.
- OCC: $750 million for serious deficiencies in its AML compliance systems, the largest fine in the agency’s history.
- OFAC: $11.6 million involving 475 transactions that may have violated sanctions against Russia, Iran, and other countries.
BofA has said it is investing significant money and resources to improve its compliance systems. It must also undergo an independent third-party review and reexamine suspicious transactions it may have missed in the past. What I find most striking is that BofA, the second-largest bank in the U.S., is not exactly lenient when reviewing everyday customers’ applications to open accounts or make transfers, yet its own AML systems had such major gaps for so long. Of course, this case is primarily an internal bank compliance matter, and there is currently no evidence that it will directly affect everyday customers’ checking accounts, credit cards, or account-opening bonuses.
