The U.S. Treasury Department has imposed a $1.2 billion fine on Bank of America for failing to detect and report suspicious financial activity, marking the third-largest penalty ever issued by the department. The penalty, announced on October 13, 2026, stems from the bank’s alleged violations of anti-money laundering laws and sanctions regulations, including its failure to flag over $5 billion in suspicious transactions, $1 billion of which posed national security risks, according to the Treasury.
Bank of America admitted it willfully violated
the 1970 Bank Secrecy Act by failing to maintain a compliant anti-money laundering program, conduct due diligence on foreign correspondent accounts, and file required suspicious activity reports. The fine includes $750 million from the Office of the Comptroller of the Currency (OCC), the largest penalty ever levied by that agency, and $11.6 million from the Office of Foreign Assets Control (OFAC), tied to 475 apparent violations of sanctions programs targeting Russia, Iran, narcotics, and global terrorism.
Penalties for Systemic Failures of Anti-Money Laundering Obligations
Treasury Secretary Scott Bessent emphasized the systemic risks posed by the bank’s failures, stating, 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.
The Treasury criticized Bank of America for over-relying on external inquiries from law enforcement and other institutions rather than its own internal controls, effectively outsourcing a substantial portion of its proactive detection and reporting obligations.
Bank’s Response and Broader Context
In a statement, Bank of America said it worked with regulators to reach these penalty resolutions
and highlighted its investments in technology and personnel to combat financial crime. Our team is far along with and committed to completing the work required to address the issues raised by our regulators,
the bank said. However, analysts noted the fine could damage the bank’s reputation, with Wells Fargo’s Mike Mayo calling it a “reputation hit” but noting the financial impact remains “manageable.”
The $1.2 billion penalty ranks as the third-largest in Treasury history, behind a $4 billion settlement with cryptocurrency exchange Binance in 2023 and a $3 billion penalty against Canada’s TD Bank in 2024. The enforcement action aligns with the Biden administration’s broader focus on anti-money laundering efforts, including oversight of the emerging virtual currency sector. Bank of America’s stock fell 1.8% in after-hours trading following the announcement, reflecting market concerns over the regulatory and financial repercussions.
The bank is also required to hire an independent external monitor to audit historical transactions and identify unreported suspicious activity, as part of the settlement terms.
