Bank of America Hit With $1.2 Billion Penalty After Regulators Flag $5 Billion in Suspicious Activity

Bank of America is facing one of the largest financial-crime enforcement actions in U.S. history after federal regulators said the bank failed to promptly identify and report more than $5 billion in suspicious transactions.

The U.S. Treasury Department announced on Tuesday, October 13, that its Financial Crimes Enforcement Network, known as FinCEN, assessed a $1.2 billion penalty against the country’s second-largest bank. Treasury said the action is the third-largest penalty in the department’s history.

A separate $11.6 million settlement with the Office of Foreign Assets Control, or OFAC, pushes the combined enforcement actions above $1.21 billion.

What regulators say went wrong

FinCEN said Bank of America failed to maintain an anti-money-laundering program that met federal requirements, did not perform required due diligence on certain foreign correspondent accounts and did not file suspicious activity reports on time.

According to the FinCEN enforcement announcement, the bank admitted that it willfully violated the Bank Secrecy Act. Treasury said the failures left more than $5 billion in suspicious transactions unreported on time, including more than $1 billion tied to priority risks such as suspected Chinese money-laundering networks, fraud and potential trade-based money laundering connected to the southwest border.

Suspicious activity does not by itself prove that a crime occurred. Banks file reports so law-enforcement agencies can evaluate transactions that may indicate money laundering, fraud, sanctions evasion or other illicit conduct. Regulators’ central allegation is that Bank of America’s internal systems did not detect, investigate and report those warning signs when required.

The $750 million OCC fine is part of the $1.2 billion penalty

The Office of the Comptroller of the Currency separately assessed a $750 million civil penalty—the largest in the regulator’s history. That amount is credited toward FinCEN’s $1.2 billion assessment, so the two figures should not be added together.

The OCC said the bank’s transaction-monitoring system failed to properly monitor trillions of dollars in activity, producing large numbers of late suspicious activity reports involving billions of dollars. It also said Bank of America knew for years that potentially suspicious activity was not always being escalated for investigation.

The findings build on a December 2024 cease-and-desist order that required the bank to repair its Bank Secrecy Act and anti-money-laundering controls. The OCC said significant breakdowns remained more than a year later.

A separate sanctions settlement

OFAC also announced an exact settlement of $11,662,930 covering 475 apparent sanctions violations. The agency said the bank processed payments involving blocked banks, failed to properly prioritize alerts for customers matching sanctioned individuals, did not promptly update watchlists after new designations and mishandled two business accounts associated with blocked people.

The OFAC settlement involved sanctions programs targeting Russia, Belarus, Iran, Burma, Somalia, narcotics trafficking and global terrorism. OFAC classified the apparent violations as non-egregious, but said they were largely not voluntarily disclosed.

What Bank of America says

Bank of America said it takes financial-crime compliance seriously and accepts responsibility for getting it right. In a statement reported by Reuters and The Associated Press, the bank said it has invested billions of dollars in technology and assigned thousands of employees to fight financial crime.

The bank also said its third-quarter results will include a non-tax-deductible $1.2 billion charge, reducing quarterly net income by about 17 cents per share.

What happens next

The FinCEN order requires Bank of America to hire an independent third party to look back through past transactions, identify suspicious activity that went undetected and submit required reports. Independent reviewers will also evaluate the bank’s transaction monitoring, customer due diligence, foreign correspondent account controls and the data systems that support its anti-money-laundering program.

The scale of the action matters beyond one bank. Bank of America processes hundreds of trillions of dollars in transactions each year, according to the OCC. When controls at an institution that large fail, regulators argue, the gaps can ripple across the wider financial system and make it harder to trace money linked to fraud, narcotics trafficking, sanctions evasion and other national-security risks.