US Treasury imposes 1.2bn fine on Bank of America over money laundering failures

Hind Al Soulia - Riyadh - NEW YORK — US regulators fined Bank of America more than $1.2 billion on Tuesday over widespread failures to detect and stop potential money laundering and other illegal financial activity.

The Treasury Department said the second largest bank in the United States failed to properly monitor trillions of dollars in transactions and report more than $5 billion in suspicious activity, including transactions potentially tied to Chinese money-laundering networks, narcotics trafficking, and fraud.

"Our team is far along with and committed to completing the work required to address the issues raised by our regulators," Bank of America said.

The announcement came less than 24 hours before Bank of America was due to announce its quarterly earnings on Wednesday morning.

"Our third-quarter results will include a non-tax-deductible charge of $1.2 billion impacting net income by approximately 17 cents per share," the bank said in an emailed statement.

"We have already dedicated substantial personnel and resources to our ongoing remediation efforts, and those costs are in the current expense base," it added.

In announcing the fine, the third-largest the department has ever imposed, Treasury Secretary Scott Bessent said: "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."

The Treasury said the bank overly relied on inquiries from outside parties like law enforcement and other financial institutions instead of its own internal controls.

This meant that it "effectively outsourced to third parties a substantial portion of its proactive detection and reporting obligations," the department said.

As part of the settlement, Bank of America admitted that it "willfully violated" the Bank Secrecy Act by failing to maintain a compliant anti-money laundering program, conduct required due diligence on foreign correspondent accounts and file suspicious activity reports, the Treasury said.

The $1.2 billion fine included penalties imposed by the Office of the Comptroller of the Currency (OCC) and the Office of Foreign Assets Control (OFAC).

The OCC's $750 million fine marked the biggest penalty it has ever levied.

OFAC said its settlement with the bank was tied to 475 apparent violations of sanctions programs including those on Russia and Iran, narcotics, and global terrorism.