The Treasury Department said the fine, the third-largest in the department's history, was due to the bank's failure to report more than $5 billion in suspicious activity to the government, including $1 billion that posed national security-related and other priority illicit finance risks.
Reuters
14 October, 2026, 09:10 am
Last modified: 14 October, 2026, 09:20 am
Bank of America has been fined $1.21 billion by US regulators for widespread failures to detect potential money laundering and other illicit activity, a penalty the bank said will hurt third-quarter earnings.
The Treasury Department said the fine, the third-largest in the department's history, was due to the bank's failure to report more than $5 billion in suspicious activity to the government, including $1 billion that posed national security-related and other priority illicit finance risks.
"Financial institutions are on the front lines of protecting our economic and national security," Treasury Secretary Scott Bessent said in a statement. "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 said the bank "prioritised its revenues" in building compliance programmes, and overly relied on enquiries from outside parties, such as law enforcement agencies and other financial institutions, instead of its own internal controls.
The consent order requires Bank of America to hire an independent third party to review past transactions, identify suspicious activity that the bank failed to detect at the time, and report those transactions to the Financial Crimes Enforcement Network (FinCEN).
"Financial crime compliance is serious, and we are responsible for getting it right," a Bank of America spokesperson said in a statement. "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."
The spokesperson added that the bank's third-quarter results, due for release on Wednesday, would include a non-tax-deductible charge of $1.2 billion, reducing quarterly net income by approximately 17 cents per share.
The regulator said the bank's compliance programme was "deficient and ineffective", and its transaction monitoring system had caused the bank to delay filing suspicious activity reports on billions of dollars' worth of transactions.
In addition, the bank paid an $11.6 million fine to the Office of Foreign Assets Control for more than 400 apparent violations of numerous sanctions programmes. The Treasury said the bank had mistakenly processed millions of dollars in payments that violated sanctions programmes targeting countries including Russia and Iran.
The fine comes days after American Express was also hit with a $350 million penalty for similar anti-money laundering shortcomings.