Bank of America faces more than $1.2 billion in federal penalties for failing to report suspicious transactions and fix anti-money-laundering problems. Treasury says the penalties include a record $750 million civil penalty from the OCC. The bank will book a charge in its third-quarter results due Wednesday.
Bank of America was hit with more than $1.2 billion in federal penalties on Tuesday after regulators said the bank failed to report more than $5 billion in suspicious transactions. Treasury's Financial Crimes Enforcement Network said the penalty is the third-largest in Treasury history.
The bank's shares were down about 2% in after-hours trading. The penalties land less than a day before the bank reports quarterly earnings.
What Treasury says the bank failed to do
More than $1 billion of the unreported activity involved national security and other high-priority risks, including Chinese money-laundering networks and activity tied to the southwest border, Treasury said. As part of the settlement, the bank admitted it willfully violated the Bank Secrecy Act by failing to maintain a compliant anti-money-laundering program, according to Treasury.
Treasury also said the bank put its revenues first in building compliance programs and relied too heavily on inquiries from outside parties such as law enforcement and other financial institutions. Treasury Secretary Scott Bessent said in a statement that the actions send a clear message: "even the biggest financial institutions are not above the law".
How the penalty breaks down
The Office of the Comptroller of the Currency imposed a $750 million civil money penalty, the largest it has ever levied. The OCC said the bank failed to fix deficiencies under a cease-and-desist order it signed in 2024. Separately, the bank paid an $11.6 million fine to the Office of Foreign Assets Control for over 400 apparent violations of sanctions programs.
The bank said the penalties will result in a $1.2 billion non-tax-deductible charge in its third-quarter results, reducing net income by about 17 cents per share. A spokesperson said the bank has invested billions in compliance and is far along in remediation efforts.
Sources: CNBC, Investing.com (Reuters)
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