Bank of America fine: US Treasury imposes USD 1.2 billion over AML and sanctions breaches

The US Treasury Department said on Tuesday it was imposing USD 1.2 billion in fines on Bank of America. Treasury alleged the bank breached anti-money laundering rules and sanctions laws. The penalties on America’s second-biggest bank ranked as the department’s third-largest action. Treasury also linked the case to risks that could affect the wider US financial system.

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Treasury Secretary Scott Bessent warned that failures at major banks can spread harm. "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,\" Scott Bessent said. \"Todays actions send a clear message that even the biggest financial institutions are not above the law.\"

Bank of America fines tied to FinCEN and sanctions settlement

Treasury said Bank of America also agreed to an USD 11.6 million settlement with the Office of Foreign Assets Control. Treasury described the conduct as apparent breaches across several sanctions regimes. These included programmes related to Iran, Russia, narcotics, and global terrorism. The department said these actions sat alongside the larger penalty announced the same day.

Treasury said the Financial Crimes Enforcement Network, known as FinCEN, assessed the USD 1.2 billion penalty. The department said Bank of America failed to reduce and report key national security threats. Treasury listed Chinese Money Laundering Networks and illicit finance activity along the southwest border. Treasury said these were treated as priority risks during the review.

Bank of America fines include record OCC amount and Bank Secrecy Act breach

Treasury said the overall penalty included USD 750 million for the US Office of the Comptroller of the Currency. Treasury said this was the biggest fine ever imposed by that federal banking regulator. Treasury also said Bank of America admitted it willfully violated the 1970 Bank Secrecy Act. The law requires banks to help detect and stop money laundering.

Bank of America said it was accountable for fixing compliance failures. \"Financial crime compliance is serious, and we are responsible for getting it right,\" Bank of America said. \"We worked with regulators to reach these penalty resolutions stemming from violations cited in the previously reported 2024 Comptroller of the Currency Consent Order and FinCENs investigation.\"

The bank said it had increased spending and staffing on controls and monitoring. \"We have invested billions of dollars in technology and dedicated thousands of employees to combat financial crime, and our team is far along with and committed to completing the work required to address the issues raised by our regulators.\" Treasury did not provide further details on timelines.

Bank of America fines ranked among Treasury’s biggest enforcement actions

Treasury said the penalty was the third-largest it has ever issued. It trailed a roughly USD 4 billion settlement in 2023 with Binance. Treasury described Binance as the world’s largest cryptocurrency exchange. The Bank of America action also followed an approximately USD 3 billion settlement with Canada-based TD Bank the next year.

Treasury said the earlier cases came during the Biden administration’s focus on anti-money laundering enforcement. Treasury also linked that period to efforts to improve compliance in the then-emerging virtual currency industry. Months after the Binance settlement, Binance founder and CEO Changpeng Zhao was sentenced to four months in prison. AP said the case involved claims criminals used the platform.

The Treasury Department said the Bank of America penalties addressed alleged breaches of sanctions and anti-money laundering duties. Treasury said the case included an OFAC settlement and a FinCEN penalty tied to national security risks. Treasury also said USD 750 million went to the OCC, setting a record. Bank of America said it was working with regulators to complete required fixes.

With inputs from PTI