Treasury Fines Bank of America $1.21 Billion for AML and Sanctions Failures

The U.S. Department of the Treasury announced enforcement actions on October 13, 2026, imposing more than $1.21 billion in penalties against Bank of America for violations of anti-money laundering (AML) and sanctions laws. The action represents the third-largest penalty in Treasury history and includes components from three regulatory bodies: the Financial Crimes Enforcement Network (FinCEN), the Office of the Comptroller of the Currency (OCC), and the Office of Foreign Assets Control (OFAC).

FinCEN assessed a $1.2 billion penalty for the bank's failure to mitigate and report priority national security risks, including Chinese money laundering networks and illicit finance along the southwest border. According to the Treasury, Bank of America failed to report over $5 billion in suspicious transactions to FinCEN, with more than $1 billion of that activity implicating national security-related and other priority concerns. The investigation found that the bank prioritized revenues over compliance resources, effectively outsourcing substantial portions of its detection and reporting obligations to third parties, law enforcement inquiries, and other financial institutions. The bank also failed to conduct adequate customer due diligence, including timely responses to red flags involving customers with potential ties to narcotics trafficking and trade-based money laundering.

The OCC imposed a $750 million civil penalty—the largest in OCC history—for deficient and ineffective AML compliance programs. Bank of America admitted to willfully violating the Bank Secrecy Act and failing to implement adequate safeguards, conduct proper due diligence for correspondent accounts with foreign financial institutions, and file required suspicious activity reports. CNN reporting also identified a design flaw in the bank's sanctions-screening filter that failed to appropriately prioritize certain potentially prohibited transactions, such as those matching individuals on the Treasury's sanctions list by name and date of birth.

OFAC announced an $11.6 million settlement agreement over apparent violations of multiple sanctions programs, including Iran, Russia, narcotics, and global terrorism designations. Bank of America agreed to settle 475 apparent violations and committed to enhanced training, testing, audits, and future cooperation with OFAC. Treasury Secretary Scott Bessent stated in a Treasury announcement that "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."

In response, Bank of America acknowledged the violations and stated it had invested billions of dollars in technology and dedicated thousands of employees to combat financial crime. The bank noted it is "far along" with remediation efforts required by regulators. A Bank of America spokesperson indicated the $1.2 billion penalty would impact third-quarter earnings, with a non-tax-deductible charge expected to reduce net income by approximately 17 cents per share. The announcement occurred on October 13, 2026, with the bank's quarterly earnings results released the following day. This enforcement action concluded without accompanying criminal charges from the Department of Justice.