Bank of America (BAC.N) has been fined $1.21 billion by US regulators for significant failures in detecting potential money laundering and other illicit activities. This penalty, the third-largest in the history of the US Treasury, is expected to impact the bank's third-quarter earnings.
Details of the Fine
The US Treasury Department stated that the fine stems from the bank's failure to report over $5 billion in suspicious activities, including $1 billion that posed risks related to national security and other priority illicit finance concerns.
““Financial institutions are on the front lines of protecting our economic and national security,” said Treasury Secretary Scott Bessent. “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 noted that Bank of America prioritized revenue generation over compliance, relying excessively on external inquiries from law enforcement and other financial institutions rather than strengthening its internal controls.
Compliance Measures
As part of the consent order, Bank of America is required to hire an independent third party to review past transactions, identify suspicious activities that were not detected, and report these transactions to FinCEN.
A spokesperson for Bank of America stated,
““Financial crime compliance is serious, and we are responsible for getting it right. We have invested billions of dollars in technology and dedicated thousands of employees to combat financial crime, and our team is far along with and committed to completing the work required to address the issues raised by our regulators.”
