Bank of America has been hit with a $1.2 billion penalty after federal regulators found the banking giant failed to report billions of dollars in suspicious transactions. The settlement is among the largest financial enforcement actions in U.S. Treasury history.
The penalty, announced Tuesday by the Treasury Department's Financial Crimes Enforcement Network (FinCEN), is the third-largest in the agency's history. It is surpassed only by penalties against cryptocurrency exchange Binance in 2023 and TD Bank in 2024.
Treasury Secretary Scott Bessent said the failures posed risks extending well beyond the bank itself. "Financial institutions are on the front lines of protecting our economic and national security," Bessent said in a statement announcing the enforcement action.
"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."
The findings have also brought renewed attention to some of the biggest financial penalties imposed on banks, several of which have run into the tens of billions of dollars.
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What To Know
FinCEN said Bank of America failed to report more than $5 billion in suspicious transactions, including activity potentially linked to Chinese money-laundering networks and illicit finance along the U.S.-Mexico border.
The regulator found that the country's second-largest bank had willfully violated the Bank Secrecy Act. This is the federal law requiring financial institutions to maintain safeguards against money laundering and report suspicious transactions.
The Treasury Department also announced an $11.6 million settlement with the Office of Foreign Assets Control over apparent sanctions violations involving countries including Iran and Russia.
Separately, the Office of the Comptroller of the Currency imposed a $750 million penalty, the largest in its history.
However, that amount will be credited against the $1.2 billion FinCEN penalty rather than added to it. This means the two penalties should not be counted as a combined $1.95 billion fine.
How Bank of America's Penalty Compares
The $1.2 billion action stands out among anti-money-laundering enforcement cases. However, it is considerably smaller than some of the largest banking settlements reached with U.S. authorities.
Unlike FinCEN's penalties, the following five major settlements cover broader financial misconduct, including mortgage-related fraud and sanctions violations. Their announced totals can include consumer relief as well as monetary penalties, making them a different measure from a single regulatory fine.
1. Bank of America: $16.65 Billion (2014)
Bank of America itself was responsible for one of the largest settlements in U.S. history. In August 2014, the bank agreed to pay $16.65 billion to resolve federal and state claims stemming from its sale of mortgage-backed securities before the 2008 financial crisis.
The agreement included $7 billion in consumer relief. The Justice Department described it as the largest civil settlement with a single entity in American history at the time.
2. JPMorgan Chase: $13 Billion (2013)
JPMorgan Chase reached a $13 billion settlement in November 2013 over allegations that it misled investors about mortgage-backed securities.
The agreement resolved claims brought by federal and state authorities over the bank's conduct in the years leading up to the financial crisis.
The deal included $4 billion in relief for struggling homeowners and communities affected by the housing downturn.
3. BNP Paribas: $8.9 Billion (2014)
French banking giant BNP Paribas agreed to pay approximately $8.9 billion in June 2014 after admitting to processing transactions through the U.S. financial system on behalf of countries subject to American sanctions.
The Justice Department said the bank had deliberately concealed transactions involving Sudan, Iran and Cuba, violating U.S. sanctions laws.
The settlement was one of the largest penalties ever imposed on a financial institution for sanctions violations.
4. Deutsche Bank: $7.2 Billion (2017)
In January 2017, Deutsche Bank agreed to a $7.2 billion settlement over allegations that it misled investors about residential mortgage-backed securities before the 2008 financial crisis.
The settlement included a $3.1 billion civil penalty and $4.1 billion in consumer relief.
5. Citigroup: $7 Billion (2014)
Citigroup reached a $7 billion settlement in July 2014 over its handling of mortgage-backed securities in the years leading up to the financial crisis.
Federal authorities said the bank misled investors about the quality of underlying mortgages. The agreement included a $4 billion civil penalty, alongside payments to state authorities and relief for homeowners.
These are five of the largest individual settlements involving banks and U.S. authorities, rather than a definitive ranking of standalone financial penalties.
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Where Bank of America Ranks Among Treasury Penalties
When measured specifically against FinCEN's largest penalties, Bank of America's latest settlement ranks considerably higher.
The agency's largest-ever penalty was imposed against cryptocurrency exchange Binance in November 2023. It was ordered to pay $3.4 billion for violations of U.S. anti-money-laundering laws.
The settlement formed part of a broader enforcement action that saw Binance agree to pay more than $4 billion to resolve investigations by U.S. authorities.
The company's founder, Changpeng Zhao, also pleaded guilty to failing to maintain an effective anti-money-laundering programme.
The second-largest FinCEN penalty came in October 2024. TD Bank was assessed $1.3 billion for violations of the Bank Secrecy Act.
The Canadian banking giant admitted to widespread failures in its anti-money-laundering controls. It agreed to pay approximately $3.1 billion in combined penalties to U.S. authorities.
The Justice Department said the bank had failed to monitor trillions of dollars in transactions. This allowed money-laundering networks to move hundreds of millions of dollars through its accounts.
Bank of America's $1.2 billion penalty now ranks third. However, unlike the Binance and TD Bank cases, the October 2026 announcement was not accompanied by a Justice Department criminal action.
What People Are Saying
Bank of America has acknowledged the compliance failures and said it has invested in technology and personnel to strengthen its financial-crime controls.
The bank's penalty comes amid increased scrutiny of financial institutions' responsibility to identify suspicious transactions and safeguard the U.S. financial system against illicit finance.
Newsweek has reached out to Bank of America and the Financial Crimes Enforcement Network for further comment and awaits their responses.
What Happens Next
Bank of America faces continued regulatory oversight as it works to address the deficiencies identified by Treasury officials.
The bank is required to take additional corrective measures, including an independent assessment of its anti-money-laundering programme.
Regulators have raised concerns that some of the problems persisted, despite an earlier enforcement order issued in December 2024.
The Office of the Comptroller of the Currency said that failures included insufficiently trained compliance staff, delays in reporting suspicious activity, and weaknesses in systems designed to detect potentially illicit transactions.
The settlement highlights the scale of financial penalties regulators can impose when major institutions fail to meet their legal obligations.
It also raises questions about whether billion-dollar fines are sufficient to deter misconduct at some of the world's largest financial institutions.
Contact Newsweek editors on this story: Matthew Robinson and James Debens