Bank of America Hit with $1.2 Billion Fine Over Anti-Money Laundering and Sanctions Violations
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Post By
Emmie
- October 14, 2026
The U.S. Department of the Treasury announced on Tuesday that it is imposing over $1.2 billion in penalties against Bank of America, the nation's second-largest banking institution, for failing to maintain adequate anti-money laundering controls and violating federal sanctions laws.
The enforcement action marks the third-largest fine ever issued by the Treasury Department, trailing only a $4 billion settlement with cryptocurrency platform Binance in 2023 and a $3 billion action against TD Bank in 2024.
Treasury Secretary Scott Bessent emphasized the potential systemic damage caused by institutional oversights:
“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. Today’s actions send a clear message that even the biggest financial institutions are not above the law.”
According to federal regulators, the Financial Crimes Enforcement Network (FinCEN) assessed the $1.2 billion penalty after determining that Bank of America failed to flag and report more than $5 billion in suspicious transactions. Treasury officials highlighted that roughly $1 billion of those unflagged transactions posed national security threats, particularly involving illicit finance along the U.S. southwest border and Chinese money laundering operations.
Regulators stated that the bank essentially outsourced its monitoring duties by relying heavily on law enforcement and outside financial institutions to raise flags rather than utilizing its own internal controls. FinCEN noted that the bank "effectively outsourced to third parties a substantial portion of its proactive detection and reporting obligations".
As part of the overall settlement:
- The Office of the Comptroller of the Currency (OCC) assessed a $750 million fine for the bank's deficient compliance program, with FinCEN providing full credit for this amount within its overall $1.2 billion assessment.
- The Office of Foreign Assets Control (OFAC) finalized an $11.6 million settlement resolving 475 apparent violations across multiple sanctions programs targeting Iran, Russia, global terrorism, and narcotics trafficking.
In settling the matter, Bank of America formally admitted that it "willfully violated" the Bank Secrecy Act of 1970.
The enforcement announcement was made less than 24 hours before Bank of America was scheduled to report its third-quarter financial earnings. The bank confirmed that its quarterly statement would reflect the financial hit:
"Our third-quarter results will include a non-tax-deductible charge of $1.2 billion impacting net income by approximately 17 cents per share."
Addressing the settlement and ongoing compliance measures, the bank added in official statements:
“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.’’
