US Treasury warns major banks over compliance failures
“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,” Treasury Secretary Scott Bessent said in a statement. “Today's actions send a clear message that even the biggest financial institutions are not above the law.”
The Treasury Department said its Financial Crimes Enforcement Network, or FinCEN, assessed the $1.2 billion penalty over Bank of America’s failure to mitigate and report priority national security risks, including Chinese Money Laundering Networks and illicit finance along the south-west border.
The penalty includes $750 million that will go to the US Office of the Comptroller of the Currency. It is the largest fine imposed by the federal banking regulator.
The Treasury Department said Bank of America “admits that it wilfully violated” the Bank Secrecy Act of 1970, which requires banks to help the government detect and prevent money laundering.
Bank of America responds to $1.2 billion penalty
“Financial crime compliance is serious, and we are responsible for getting it right,” Bank of America said in a statement. “We worked with regulators to reach these penalty resolutions stemming from violations cited in the previously reported 2024 (Comptroller of the Currency) Consent Order and FinCEN's investigation. 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.”
Penalty ranks behind Binance and TD Bank settlements
The latest action ranks behind a roughly $4 billion settlement reached in 2023 with Binance, the world’s largest cryptocurrency exchange, and an approximately $3 billion settlement with Canada-based TD Bank the following year.
Both actions took place as part of the Biden administration’s focus on combating money laundering and promoting compliance in the then-emerging virtual currency industry.
Months after the Binance settlement, its founder and chief executive, Changpeng Zhao, was sentenced to four months in prison on charges that he looked the other way as criminals used the platform to move money connected to child sexual abuse, drug trafficking and terrorism.
The penalties against Bank of America, including the $750 million component for the Office of the Comptroller of the Currency and the separate $11.6 million sanctions settlement, form the Treasury Department’s third-largest enforcement action.