More than $5 billion in suspicious transactions went unreported by Bank of America before the U.S. Treasury Department hit the institution on Tuesday with $1.21 billion in penalties for systemic anti-money laundering failures and sanctions violations.
Federal regulators announced the enforcement action on October 13, 2026, targeting the second-largest bank in the United States over long-standing compliance breakdowns. The penalties rank as the third-largest in the history of the Treasury Department’s Financial Crimes Enforcement Network, trailing only penalties assessed against Binance in 2023 and TD Bank in 2024.
Treasury Secretary Scott Bessent pointed to the sheer scale of the institution in explaining the severity of the punishment.
“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.”
Scott Bessent, U.S. Treasury Secretary
Bessent added that the coordinated federal action sends a clear message that even the biggest financial institutions are not above the law
as regulators crack down on systemic deficiencies across Wall Street. Dennis Kelleher noted that the $1.2 billion fine was small compared to Bank of America’s overall revenue. Aaron Klein emphasized that the penalties demonstrate how regulators intend to enforce compliance standards.
FinCEN Issues Penalties For $5 Billion Reporting Failure
The bulk of the financial penalty stems from a $1.2 billion assessment issued by FinCEN. Bank of America acknowledged to the Treasury Department that it committed willful violations of the Bank Secrecy Act by neglecting to maintain an adequate anti-money laundering framework, carry out mandatory due diligence concerning foreign correspondent accounts, and submit required suspicious activity reports.
Federal investigators found that the bank failed to timely report more than $5 billion in suspicious transactions over a multi-year period. More than $1 billion of that unreported activity directly implicated national security risks and high-priority illicit finance channels, including Chinese money laundering networks, fraud, and potential trade-based money laundering schemes with a substantial nexus to the southwest border.
The US Treasury Department announced it was imposing a more than $1.2 billion fine on Bank of America, accusing the bank of violating anti-money laundering and sanctions laws. https://t.co/JgeKYv0DB6 pic.twitter.com/c0dFwebT8o
Regulators revealed that the bank effectively outsourced a substantial portion of its proactive detection and reporting obligations to third parties. Internal reviews showed that Bank of America prioritised its revenues and minimised the impact on its required compliance resources.
Comptroller of the Currency Levies Record Fine
Coordinating directly with FinCEN, the Office of the Comptroller of the Currency assessed a $750 million civil money penalty against Bank of America. The sum represents the largest penalty the OCC has ever levied in its history, and FinCEN credited the OCC amount toward its own $1.2 billion assessment.
The regulator criticized the lender for failing to correct known problems despite prior warnings and formal enforcement orders, noting in the agency’s press release that the bank’s poor response to its Bank Secrecy Act deficiencies is unacceptable.
“Despite its obligation to the American people as a national-chartered, global systemically important bank, the bank’s BSA/AML compliance program continues to reflect widespread breakdowns in internal controls, which threatens U.S. national and economic security.”
Office of the Comptroller of the Currency
The OCC initially identified significant deficiencies in 2023 and subsequently issued a cease-and-desist order in December 2024 requiring the institution to overhaul its compliance infrastructure. Regulators found, however, that the bank continued to experience widespread internal control failures, including design flaws in sanctions-screening filters that prevented it from appropriately prioritizing prohibited transactions. Specifically, when a transaction matched an individual’s name and date of birth on the U.S. Treasury Department’s sanctions list, the system did not flag the transaction as high priority.
OFAC Reaches Settlement Over Sanctions Breaches
Alongside the anti-money laundering penalties, the Office of Foreign Assets Control announced an $11.6 million settlement agreement resolving potential civil liability for 475 apparent violations of multiple U.S. sanctions programs.
The OFAC enforcement release detailed that the violations occurred between September 2021 and April 2025. Most stemmed from 403 payments totaling roughly $14.3 million routed through 35 blocked banks, with 32 of those institutions sanctioned under Russia-related rules. According to OFAC investigators, the lender learned of these issues in March 2022 but refrained from conducting a comprehensive review of its transactions until an administrative subpoena from OFAC was issued in January 2025.
Bank of America Faces Earnings Impact and Remediation
Bank of America officials stated that the company cooperated to resolve the investigations and has made substantial progress on mandated fixes.
“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.”
Bank of America spokesperson
The penalties arrive on the immediate eve of the bank’s third-quarter earnings report. Executives confirmed that the enforcement actions will result in a $1.2 billion non-tax-deductible charge against third-quarter results, reducing net income by approximately 17 cents per share.
Most stemmed from 403 payments totaling roughly $14.3 million routed through 35 blocked banks, with 32 of those institutions sanctioned under Russia-related rules.