The United States has slapped Bank of America, the country's second-largest bank, with more than $1.2 billion in penalties — one of the biggest enforcement actions in American banking history — after regulators found the bank failed for years to catch and report billions of dollars in suspicious transactions, including money flows tied to national security risks.
The U.S. Treasury Department announced the penalties on Tuesday, October 13, accusing the bank of violating anti-money laundering and sanctions laws. According to the department, Bank of America failed to report more than $5 billion in suspicious activity, over $1 billion of which involved national security priorities such as Chinese money-laundering networks and illicit finance along the U.S. southwest border.
In announcing the action, Treasury Secretary Scott Bessent warned that the failure of a bank of this size put the broader financial system at risk. As part of the settlement, the bank admitted it had willfully violated the Bank Secrecy Act — a rare and serious admission for a major American lender.
A Record-Breaking Penalty
The $1.21 billion total was assessed across three different federal regulators, each striking a different part of the bank's compliance apparatus.
The Treasury Department's Financial Crimes Enforcement Network, known as FinCEN, assessed the headline penalty, which the department described as the third-largest in Treasury history. The Office of the Comptroller of the Currency (OCC) added a $750 million civil money penalty, which Comptroller of the Currency Jonathan Gould called the largest the agency has ever assessed against a bank.
Separately, the Treasury's Office of Foreign Assets Control announced an $11.6 million settlement with the bank over apparent violations of numerous sanctions programs, including those involving Iran, Russia, narcotics trafficking, and global terrorism. According to reporting on the Treasury release, the bank committed more than 475 sanctions violations between September 2021 and April 2025, processing over $14.3 million in payments through 35 "blocked banks" on the U.S. sanctions blacklist. OFAC said the bank acted "recklessly" and had previously received multiple cautionary letters about similar conduct.
What Treasury Says Went Wrong
The Treasury Department's findings paint a picture of a compliance system that failed at multiple levels. FinCEN said Bank of America violated the Bank Secrecy Act by failing to maintain a compliant anti-money laundering program, failing to conduct required due diligence on foreign correspondent accounts, and failing to file suspicious activity reports with the government.
In unusually blunt language, the Treasury said the bank "prioritized its revenues" while holding back on compliance resources. The department said the bank leaned so heavily on law-enforcement inquiries and referrals from other financial institutions that it effectively outsourced part of its own responsibility for spotting suspicious activity.
The department specifically cited the bank's failure to mitigate and report what it called "priority national security risks, including Chinese money laundering networks and illicit finance along the southwest border."
"Today's actions send a clear message that even the biggest financial institutions are not above the law," Treasury Secretary Scott Bessent said in the department's announcement. He added that the consequences of such failures extend far beyond the bank itself, exposing the entire U.S. financial system to significant illicit finance risks.
Years of Warnings
The failures were not new to regulators. The New York Times reported that the Treasury Department had warned Bank of America two years ago to be more vigilant about suspicious activity — and that the questionable transactions continued to flow even after the warning.
The bank had already been under a December 2024 consent order from the OCC requiring it to fix shortcomings in its money-laundering safeguards. More than a year later, regulators found the bank had still not addressed the holes in its compliance program.
Bank of America has been working with regulators since late 2023 to overhaul its safeguards against money laundering and other illegal transactions. On Wednesday, Bernard Mensah, the bank's president of international business, told CNN that the bank is working hard to bring its compliance on track, describing financial-crimes compliance as a serious and demanding priority on which the bank has spent substantial resources.
In a statement, the bank said it was working with regulators to reach the penalty resolutions.
What This Means
The penalty lands as regulators take an increasingly aggressive posture toward money-laundering failures at America's biggest banks. Reuters described the action as evidence of growing regulatory scrutiny on shortcomings in how U.S. financial giants police illicit finance.
As part of the settlement, regulators placed Bank of America under a consent order — a significant regulatory punishment — that requires the bank to work with an independent third party to identify and report suspicious transactions that previously went undetected. Wall Street analysts said the penalty would likely weigh on market sentiment and raise concerns about expenses and how long the order will last.
For the broader banking industry, the message is clear: size offers no shield. The third-largest penalty in Treasury history and the largest ever from the OCC put every major lender on notice that compliance failures will be punished at an unprecedented scale.
What Happens Next
The financial hit arrived at an especially awkward moment. The fine was unveiled on the eve of Bank of America's third-quarter earnings, and on Wednesday the bank reported that profit fell to $6.9 billion, or 91 cents per share, down from $8.3 billion, or $1.04 per share, a year earlier, after setting aside $1.2 billion to cover the fines. Shares fell 4 percent in premarket trading, and analysts estimate the penalties cut net income by about 17 cents per share.
The bank's international chief struck a conciliatory tone this week, telling CNN the bank believes it is getting its compliance right while acknowledging the standards are demanding. Regulators, however, will now be watching through the lens of the consent order and the third-party review — and Treasury has made clear it expects sustained improvement, not promises.
Bank of America remains the second-largest bank in the United States, headquartered in Charlotte, North Carolina. Whether the record penalty changes behavior across the industry — or becomes just another cost of doing business — will depend on what regulators do next, and how quickly the bank proves it can fix the systems that failed.
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