WorldUS Economy
US Treasury fines Bank of America $1.2 billion over money laundering lapses
Regulators say the second-largest US bank failed to report more than $5 billion in suspicious transactions on time, including flows linked to Chinese laundering networks.
Key points
- Treasury imposed more than $1.21 billion in penalties, the third-largest in its history.
- The bank's $750 million OCC fine is the largest the regulator has ever imposed.
- Bank of America said it was "responsible for getting it right" and would fix the problems.
The US Treasury on Tuesday fined Bank of America more than $1.21 billion for failing to guard against money laundering and for breaching sanctions, the third-largest penalty in the department’s history.
The Financial Crimes Enforcement Network (FinCEN), Treasury’s anti-money laundering arm, imposed $1.2 billion. That figure includes credit for a $750 million fine from the Office of the Comptroller of the Currency (OCC), the largest the bank regulator has ever handed down, for a deficient and ineffective compliance programme.
The Office of Foreign Assets Control reached a separate $11.6 million settlement over 475 apparent violations of sanctions programmes covering Iran, Russia, narcotics and global terrorism.
What went wrong
Treasury said Bank of America, the second-largest bank in the US, failed to spot and report national security risks, including Chinese money laundering networks and illicit money moving along the southwest border. It did not report more than $5 billion in suspicious transactions to FinCEN on time.
The department also found that “the Bank effectively outsourced to third parties a substantial portion of its proactive detection and reporting obligations”, and that its customer checks fell short.
Treasury Secretary Scott Bessent said the penalties showed that “even the biggest financial institutions are not above the law”. When a bank of that size fails in its duties, he said, the risk spreads to the whole US financial system.
The bank’s answer
“Financial crime compliance is serious, and we are responsible for getting it right,” Bank of America said. It said it had spent billions of dollars on technology, employs thousands of people to fight financial crime and is committed to finishing the work regulators have asked for.
The sanctions settlement also binds the bank to commitments on training, testing, audits and cooperation with OFAC.