Full Breakdown
Treasury Hits Bank of America with $1.2 Billion Penalties for AML and Sanctions Violations
By Drooid · · How we work
Core Event
The U.S. Treasury Department announced on Tuesday that it is imposing more than $1.2 billion in penalties on Bank of America, the nation’s second-largest bank, for alleged violations of anti-money-laundering (AML) rules and multiple sanctions programs. The penalties, the third-largest ever assessed by the Treasury, include a $750 million fine to the Office of the Comptroller of the Currency (OCC) and an $11.6 million settlement with the Office of Foreign Assets Control (OFAC) over “apparent violations” involving Iran, Russia, narcotics and global terrorism sanctions.
Background & Context
The Treasury’s Financial Crimes Enforcement Network (FinCEN) enforces the Bank Secrecy Act, which requires banks to maintain robust AML programs, conduct due-diligence on foreign correspondent accounts, and file Suspicious Activity Reports (SARs). Over the past decade, the Treasury has escalated enforcement actions against major financial institutions, notably a roughly $4 billion settlement with cryptocurrency exchange Binance in 2023 and a $3 billion settlement with TD Bank in 2024. The current action continues that trend, targeting systemic failures that expose the U.S. financial system to illicit finance risks.
Data & Statistics
- Total penalties: $1.2 billion (some reports cite $1.21 billion).
- OCC fine: $750 million – the largest ever levied by that regulator.
- OFAC settlement: $11.6 million for 475 alleged sanctions violations.
- Unreported suspicious activity: over $5 billion, with more than $1 billion tied to national-security-related risks.
- Bank of America processes roughly $4.5 trillion in consumer payments and $450 trillion in corporate payments annually.
Official Statements & Responses
The Treasury Department said Bank of America “admits that it willfully violated” the 1970 Bank Secrecy Act and failed to maintain a compliant AML program.
Bank of America responded that it has invested billions in compliance, is “far along” in remediation, and expects the $1.2 billion charge to be a non-tax-deductible expense in its third-quarter results, reducing net income by about 17 cents per share. The bank’s stock fell roughly 2 % in after-hours trading following the announcement.
Verbatim Quotes
- “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,” — Treasury Secretary Scott Bessent
Conflicting Reports & Gaps
- Penalty amount: Most outlets report a $1.2 billion total, while one source specifies $1.21 billion. Both figures are described as the third-largest Treasury penalty.
- Breakdown of fines: The $750 million OCC fine is consistently reported, but the exact allocation of the remaining amount between Treasury and other agencies varies across reports.
- Details of sanctions violations: The Treasury statement lists violations involving Iran, Russia, Belarus, Burma, Somalia, narcotics and global terrorism, yet the precise number of transactions or dollar values tied to each sanction program is not disclosed.
What’s Next
Bank of America is slated to release its third-quarter earnings before 7:00 a.m. ET on Wednesday. CEO Brian Moynihan is scheduled to appear on CNBC’s “Squawk on the Street” later that morning, where the penalties and their impact on the bank’s financial outlook are expected to be discussed. Treasury officials indicated that the department will continue to prioritize enforcement actions against institutions that “prioritized revenues over compliance.”