Bank of America fined $1.2 billion over money-laundering violations

Bank of America facing $1.21 billion in penalties for violations of anti-money laundering and sanctions laws. BofA admitted that it quote "willfully violated the Bank Secrecy Act," Treasury said in a statement. The enforcement action is the third largest penalty in Treasury history and the largest in the history of the Office of the Comptroller of the Currency. FinCEN assessed the bulk of the penalty, which stemmed from what it calls BofA's failure to mitigate and report national security risks, including Chinese money laundering networks and illicit finance alongside the southwest border. FinCEN then credits the OCC's $750 million penalty, which is due to what it said was "deficient and ineffective" anti-money laundering compliance. And OFAC, the Office of Foreign Assets Control, announced a separate $12 million settlement over violations of sanctions programs, including those involving Iran, Russia, narcotics and global terrorism, they all said in a statement. Also just received a statement from Bank of America where they say, quote "Financial crime compliance is serious, and we are responsible for getting it right. We worked with regulators to reach these penalty resolutions stemming from violations cited in the previously reported 2024 OCC Consent Order and FinCEN's investigation. We have invested billions of dollars in technology and dedicated thousands of employees to combat financial crime..." They go on to say, of course, Bank of America is reporting earnings tomorrow morning. And they say that the third quarter results will include a non-tax deductible charge of $1.2 billion, impacting net income by about $0.17 per share. They note that they already have dedicated substantial personnel and resources to ongoing remediation efforts, and those costs are in the current expense base. Treasury Secretary Scott Bessent saying in the release, quote "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 U.S. financial system to significant illicit finance risks." There is no asset cap requirement as part of this consent order, which is noteworthy, and no criminal activity by Bank of America. This is a technical compliance matter, according to a person familiar with the matter. But Treasury says BofA failed to FinCEN over $5 billion worth of suspicious transactions and over 1 billion of that is implicated in national security related risks.