Bank of America Hit With $1.2 Billion Treasury Fine Over Money-Laundering Failures

The U.S. Treasury Department has imposed more than $1.21 billion in penalties on Bank of America — the nation's second-largest bank — for anti-money-laundering and sanctions failures, after the bank admitted it willfully violated the Bank Secrecy Act. It is one of the largest enforcement actions in American banking history and the biggest of its kind under the current administration.

The coordinated action, announced Tuesday, 13 October 2026, involves three Treasury agencies acting concurrently. The Financial Crimes Enforcement Network (FinCEN) assessed a $1.2 billion penalty — the third-largest in Treasury history. The Office of the Comptroller of the Currency (OCC) imposed a $750 million civil money penalty — the largest fine the OCC has ever levied, credited against the FinCEN assessment rather than added on top. And the Office of Foreign Assets Control (OFAC) announced a separate $11.6 million settlement over apparent sanctions violations.

The bank will take a non-tax-deductible $1.2 billion charge in its third-quarter 2026 results, reported on 14 October, cutting earnings per share by roughly 17 cents. Shares fell about 2% in after-hours trading on the news.

What the regulators found

Treasury said Bank of America failed to report more than $5 billion in suspicious activity — including roughly $1 billion involving national-security and other priority illicit-finance risks. The flagged activity included Chinese money-laundering networks, narcotics trafficking, fraud and possible trade-based money laundering along the southwest border. In some cases, the bank allegedly failed to act on red flags even after its own compliance personnel escalated concerns.

The specific deficiencies were sweeping:

• An inadequate AML programme: the bank failed to implement anti-money-laundering controls meeting the minimum requirements of the Bank Secrecy Act.
• Correspondent-banking due diligence: it failed to conduct proper due diligence on correspondent accounts held for foreign financial institutions — the accounts through which overseas banks access the U.S. financial system, and a classic conduit for illicit flows.
• Missing suspicious-activity reports: it failed to file SARs on activity it was legally required to flag.
• Outsourced detection: Treasury said the bank effectively outsourced suspicious-activity detection and reporting to third parties while minimising its own compliance resources — and, most damningly, that it had "prioritised its revenues" over building an adequate compliance programme, relying on inquiries from outside parties such as law enforcement and other banks instead of its own internal controls.

The lapses persisted for years. According to case reporting, serious compliance failures continued even after the bank was ordered to strengthen safeguards in December 2024 under an OCC consent order — the same 2024 order the bank's own statement references.

The sanctions violations

The OFAC settlement covers nearly 500 apparent violations of U.S. sanctions programmes targeting Iran, Russia, narcotics traffickers and global terrorism. Reporting puts the figure at 475 violations, with 403 payments worth about $14.3 million routed through blocked banks — mostly under Russia-related sanctions. The $11.6 million OFAC settlement is small relative to the headline penalty, but it underscores that the failures spanned both money-laundering controls and sanctions screening.

Notably, there is no Department of Justice criminal action in this case — unlike the Binance and TD Bank enforcement actions, which both included criminal resolutions. Bank of America's admission was made to FinCEN as a civil matter, not a criminal guilty plea.

The admission and the bank's response

Bank of America admitted that it willfully violated the Bank Secrecy Act — failing to maintain an adequate AML programme, conduct correspondent-banking due diligence and file suspicious-activity reports. A "willful" admission is significant: it goes beyond negligence and concedes the bank knew, or was recklessly indifferent to, its legal obligations.

In a statement, a bank spokesperson said: "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."

The bank said it worked with regulators on the resolutions stemming from the 2024 OCC consent order and FinCEN's investigation, that remediation costs are already reflected in its current expense base, and that it reports "hundreds of thousands" of SARs each year and supports law enforcement across "thousands of investigations." No leadership changes have been announced.

"Not above the law"

Treasury Secretary Scott Bessent framed the action in national-security terms: "Financial institutions are on the front lines of protecting our economic and national security… 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. Today's actions send a clear message that even the biggest financial institutions are not above the law."

The consent order requires Bank of America to hire an independent third party to review past transactions, identify suspicious activity it failed to detect, and report it to FinCEN — a retrospective look-back that could surface further violations. It must also submit to independent reviews of its transaction monitoring, customer due diligence and correspondent-banking controls, with a particular focus on the southwest border, cartels, Iran and Russia.

How this compares

The $1.2 billion FinCEN penalty is the third-largest in Treasury history, behind Binance's roughly $3.4–4 billion (2023) and TD Bank's roughly $1.3 billion FinCEN assessment — about $3 billion all-in (2024). Both of those were Biden-era actions that included DOJ criminal charges; Binance's then-CEO Changpeng Zhao received a four-month prison sentence, and TD Bank pleaded guilty to Bank Secrecy Act violations and money-laundering conspiracy, accepted an asset cap restricting its growth, and paid a $1.8 billion criminal resolution plus a $450 million OCC penalty.

By that standard, Bank of America got off comparatively lightly on structure: no criminal plea, no growth restriction, no asset cap — its OCC $750 million is larger than TD's, but the settlement is civil-only and admission-based. It is nonetheless the largest AML penalty imposed on a major bank by the Trump-era Treasury, and a signal that the administration intends to keep the enforcement tempo of its predecessor even without criminal charges attached.

For ordinary customers, the practical consequences are limited to the indirect: compliance spending will keep rising, and the retrospective transaction review could generate years of follow-on work. But the 17-cent-per-share hit — roughly 15% of expected third-quarter earnings per share of about $1.11 — is a reminder that compliance failures at this scale are a direct shareholder cost. Readers modelling the cost of borrowing can estimate repayments with our loan and EMI calculator, and those tracking the dollar's moves against regional currencies can use our currency converter.

FAQs

Which agencies fined Bank of America and how much?

Three U.S. Treasury agencies acted on 13 October 2026: FinCEN assessed a $1.2 billion penalty for Bank Secrecy Act violations; the OCC imposed a $750 million civil money penalty for a deficient BSA/AML compliance programme — the largest OCC fine ever, credited against (not added to) the FinCEN penalty; and OFAC announced a separate $11.6 million settlement over apparent sanctions violations. The combined figure is reported as more than $1.21 billion. There is no DOJ criminal action.

What did the bank actually do wrong?

Treasury found that Bank of America failed to report over $5 billion in suspicious activity, including about $1 billion tied to national-security and priority illicit-finance risks such as Chinese money-laundering networks, narcotics trafficking and trade-based money laundering along the southwest border. It failed to maintain an adequate AML programme, to conduct due diligence on correspondent accounts for foreign banks, and to file required suspicious-activity reports — and Treasury accused it of prioritising revenues over compliance and outsourcing detection to third parties. Serious failures continued even after a December 2024 OCC consent order.

Did Bank of America admit wrongdoing?

Yes. The bank admitted to FinCEN that it willfully violated the Bank Secrecy Act — failing to maintain an adequate AML programme, conduct correspondent-banking due diligence and file SARs. This is a civil admission to FinCEN, not a criminal guilty plea: unlike TD Bank, which pleaded guilty to BSA violations and money-laundering conspiracy in 2024, Bank of America faces no criminal charges in this matter.

How does this compare to the Binance and TD Bank fines?

At $1.2 billion, the FinCEN penalty is the third-largest in Treasury history, behind Binance (~$3.4–4 billion, 2023) and TD Bank (~$1.3 billion FinCEN, ~$3 billion total, 2024). But both earlier cases included DOJ criminal resolutions — Binance's CEO served four months in prison and TD Bank accepted an asset cap and a $1.8 billion criminal penalty. Bank of America's settlement is civil-only with no growth restriction, making it structurally lighter even though it is the largest AML penalty on a major bank by the Trump-era Treasury.

What happens next for the bank?

The consent order requires Bank of America to hire an independent third party to review past transactions, find suspicious activity it missed and report it to FinCEN, plus independent reviews of its monitoring, customer-due-diligence and correspondent-banking controls focused on the southwest border, cartels, Iran and Russia. The bank takes a non-tax-deductible $1.2 billion charge in Q3 2026 results (about 17 cents per share), says remediation costs are already in its expense base, and has announced no leadership changes. Analysts treat the fine as a one-time item but expect compliance spending to keep rising.