U.S. Treasury Department issues its third-largest penalty ever, fining Bank Of America $1.2B for alleged law violations

The U.S. Treasury Department announced Tuesday, October 13, that it was fining Bank of America $1.2B for the alleged violation of sanctions and anti-money laundering laws. This amounts to the third-largest penalty the Treasury Department has ever imposed. Bank of America is the second-largest bank in the nation.

The only other penalties larger than Bank of America’s were a $3B settlement in 2024 with TD Bank and a $4B settlement in 2023 with Binance, the largest cryptocurrency exchange in the world. Months after Binance was fined, its CEO and founder, Changpeng Zhao, was sentenced to four months in prison for allegedly ignoring criminals using his platform to transfer money connected to terrorism, drug trafficking, and child sex abuse.

According to the Treasury Department, the newly imposed fines cover a number of violations, including violations of the 1970 Bank Secrecy Act. $750 million of the $1.2B is earmarked for the U.S. Office of the Comptroller of the Currency, marking the largest fine that particular federal bank regulatory agency has imposed.

The Treasury Department’s statement claimed numerous violations had occurred

Per the statement released by the Treasury Department on its website, the agency reported that the Financial Crimes Enforcement Network had assessed the significant penalty for the bank over its “failure to mitigate and report priority national security risks, including Chinese Money Laundering Networks and illicit finance along the southwest border.”

The Treasury also stated that Bank of America “admits that it willfully violated” the 1970 Bank Secrecy Act. This act requires that banking institutions aid the government in detecting and preventing money laundering. Additionally, the bank reportedly reached a settlement with the Treasury’s Office of Foreign Assets Control for $11.6 million over “apparent violations of numerous sanctions programs, including on Iran, Russia, narcotics, and global terrorism.” Allegedly, Bank of America failed to report roughly $5B in suspicious transactions.

Treasury Secretary Scott Bessent explained in the statement, “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. Today’s actions send a clear message that even the biggest financial institutions are not above the law.”

Bank of America released its own statement on the matter

Bank of America also released a statement about the penalty, per reporting from AP News, which said, “Financial crime compliance is serious, and we are responsible for getting it right.We worked with regulators to reach these penalty resolutions stemming from violations cited in the previously reported 2024 (Comptroller of the Currency) Consent Order and FinCEN’s investigation.”

The statement continued, “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.’’

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