Bank of America has been hit with a US$1.2 billion money-laundering penalty after U.S. regulators found failures in its controls for detecting and reporting suspicious activity. The action, announced on Tuesday, October 13, also brings an earnings charge ahead of the bank's quarterly results.
The Financial Crimes Enforcement Network, or FinCEN, said the bank admitted willfully violating the Bank Secrecy Act. The violations concerned its anti-money-laundering programme, due diligence for foreign correspondent accounts and suspicious activity reporting.
A separate sanctions settlement takes the combined penalties to about US$1.21 billion. The bank says it has invested billions of dollars in technology and assigned thousands of employees to fighting financial crime.
How the Bank of America Penalty Adds Up
The headline figures describe coordinated actions rather than three fines that can simply be added together. The Office of the Comptroller of the Currency, or OCC, explicitly said FinCEN credits its US$750 million assessment toward the US$1.2 billion penalty.
- FinCEN: US$1.2 billion for anti-money-laundering and reporting failures.
- OCC: US$750 million, included within the FinCEN amount.
- OFAC: a separate US$11.6 million sanctions settlement.
The OCC called its assessment the largest in the agency's history. Its action follows a December 2024 cease-and-desist order requiring the bank to correct deficiencies in its compliance programme.
Regulators Flag More Than US$5 Billion
According to the Treasury Department's announcement, Bank of America failed to report more than US$5 billion in suspicious transactions in a timely manner. More than US$1 billion involved national-security-related and other priority illicit-finance risks.
Those risks included suspected Chinese money-laundering networks, fraud and possible trade-based money laundering connected to the U.S. southwest border. Suspicious transactions are warning signals requiring review and reporting; the figure is not a finding that every dollar was criminal proceeds.
The OCC said weaknesses in transaction monitoring led to late reports involving billions of dollars. It also identified shortcomings in staff expertise, training and audit work, and said significant problems persisted after the bank agreed to the 2024 order.
These are U.S. enforcement findings. They are separate from the banking consolidation covered in BullBuzz's report on China's rural-bank cleanup, which concerns a different regulatory system.
Bank Says Compliance Work Is Advanced
In a statement reported by Reuters, a spokesperson said: “Financial crime compliance is serious, and we are responsible for getting it right.” The bank said its team was well advanced in addressing the issues regulators raised.
The spokesperson said third-quarter results due on Wednesday, October 14, would include a US$1.2 billion non-tax-deductible charge. The bank estimated that this would reduce quarterly net income by approximately 17 U.S. cents per share.
Reuters reported that shares fell 2.7% in after-hours trading on Tuesday, following a 1.1% decline during the regular session. Those moves describe the reaction after the announcement, rather than a live Wednesday quote.
What Investors Should Watch Next
The charge makes the distinction between reported and adjusted earnings particularly relevant. Investors can assess the bank's results alongside the cost and timetable of its remaining compliance work.
Treasury said the resolution requires a third-party review of past transactions to identify activity that went undetected, plus independent assessments of monitoring, customer checks and foreign correspondent-account controls. OFAC's separate settlement covers 475 apparent sanctions violations, including payments involving Russia and Iran.
BullBuzz's coverage of financial regulators' enforcement powers provides context for a separate area of oversight. For Bank of America, the next measurable tests are the earnings charge and evidence that the compliance weaknesses identified in 2024 have been corrected.
Photo: Bank of America branch in New York, October 11, 2026. Michael Nagle / Bloomberg / Getty Images, via CNBC. File photograph.