Bank of America hit with more than $1.21 billion in penalties over compliance failures

Key Facts

The U.S. Treasury Department announced on 13 October 2026 more than $1.21 billion in penalties against Bank of America over anti-money laundering and sanctions violations. The department described the action as the third-largest penalty in its history, while the bank admitted, according to the Financial Crimes Enforcement Network, that it willfully violated the Bank Secrecy Act. Treasury said the bank was late in reporting suspicious transactions worth more than $5 billion. More than $1 billion of the activity was linked to national security and illicit finance risks designated as priorities by authorities. Those risks included indicators of Chinese money laundering networks and trade-based money laundering linked to the southwestern border.

The actions include a $1.2 billion fine imposed by the Financial Crimes Enforcement Network, according to a statement from the Office of the Comptroller of the Currency. The OCC imposed a $750 million fine of its own, which will be credited toward FinCEN's fine when the bank settles the amounts due. In a separate sanctions compliance action, the Office of Foreign Assets Control announced an $11.6 million settlement. That settlement concerns apparent violations of U.S. sanctions programs related to Iran and Russia, according to FinCEN's announcement. The apparent violations also involve sanctions programs related to narcotics and global terrorism, as part of the regulatory actions announced against the bank.

Treasury attributed some of the failures to the bank's resource management decisions, saying it "prioritized its revenues." It added that the bank minimized the impact of compliance requirements on the resources allocated to meet them, as part of its assessment of the causes of the anti-money laundering shortcomings. The department said the bank relied on inquiries from law enforcement agencies and other institutions to identify suspicious activity, rather than on its automated controls. It described that reliance as effectively shifting a large part of the task of detecting such activity to outside parties. The failures also extended to due diligence procedures for correspondent accounts held by foreign financial institutions, according to FinCEN.

The penalties came while the bank was already subject to a regulatory order issued by the OCC in December 2024 to overhaul its anti-money laundering program. The OCC said the program's officer and team lacked sufficient skills and experience to manage it effectively. Its findings also covered the bank's audit function, which failed to identify longstanding compliance problems. Regulatory examiners subsequently uncovered those problems, according to the OCC statement outlining the internal control deficiencies. The OCC also identified a systemic monitoring gap that allowed the processing of transactions potentially linked to trade-based money laundering.

Responding to the actions, the bank said, according to the Associated Press, that "financial crime compliance is serious, and we are responsible for getting it right." It added that it had invested billions of dollars in technology used to combat financial crime. It also said it had assigned thousands of employees to that work, outlining the resources it had directed toward compliance. Under FinCEN's consent order, the bank must propose a qualified independent consultant to review past activity. The order set a deadline of 60 days from its signing for submitting the proposal for the consultant who will conduct that review.

On the financial impact, Bank of America said, according to Reuters, that its third-quarter results would include a $1.2 billion charge related to the settlement. It said the charge was not tax-deductible and would reduce quarterly earnings per share by about 17 cents. Ahead of the results, analysts' average forecast for adjusted earnings compiled by the London Stock Exchange Group stood at $1.10 per share, according to Reuters. Those forecasts exclude exceptional items, including the fine, from the bank's expected adjusted earnings. Third-quarter results are scheduled for release on 14 October 2026, the day after the penalties were announced, according to the date set by the bank.