Bank of America is facing more than $1.21 billion in penalties from US regulators over serious shortcomings in its anti-money laundering controls and alleged violations of financial sanctions requirements, marking one of the largest enforcement actions in the history of the US Treasury Department.

The US Department of the Treasury said the bank failed to properly identify, investigate and report more than $5 billion in suspicious financial transactions. More than $1 billion of the activity involved national security-related and other high-priority financial risks, including suspected links to Chinese money laundering networks and illicit financial activity along the US southwest border.

The action includes a $1.2 billion penalty assessed by the Financial Crimes Enforcement Network (FinCEN), while the Office of the Comptroller of the Currency (OCC) imposed a $750 million civil penalty over deficiencies in the bank's anti-money laundering compliance programme. The Treasury also announced an $11.6 million settlement concerning apparent violations of multiple US sanctions programmes.

Regulators Highlight Weaknesses in Financial Monitoring

According to the Treasury Department, Bank of America's monitoring systems and internal compliance procedures failed to identify and escalate suspicious transactions in a timely manner. Regulators said the bank did not adequately respond to warning signs, even after concerns were raised by compliance personnel.

The investigation also identified shortcomings in customer due diligence and the monitoring of transactions involving foreign financial institutions. Authorities said the bank relied excessively on external referrals and law enforcement inquiries instead of maintaining effective internal systems to detect potentially illicit financial activity.

The enforcement action also covers apparent sanctions violations involving programmes targeting countries and activities including Russia, Iran, narcotics and global terrorism.

Bank of America Responds to Regulatory Action

Bank of America said it had worked with regulators to reach resolutions concerning the identified compliance issues. The bank also stated that it had invested billions of dollars in technology and employed thousands of people to strengthen its financial crime prevention systems.

The bank indicated that the penalty would affect its third-quarter financial results, with a non-tax-deductible charge of approximately $1.2 billion expected to reduce net income by around 17 cents per share.

A Significant Warning for the Banking Industry

The enforcement action sends a strong message to financial institutions about the importance of robust anti-money laundering systems, effective transaction monitoring and compliance with international sanctions.

The OCC's $750 million civil penalty is the largest in the regulator's history, while the Treasury Department described the broader action as one of its largest enforcement penalties.

As part of the regulatory resolution, Bank of America will be required to undertake further reviews of its transaction monitoring, customer due diligence and compliance systems, including a review of past transactions to identify suspicious activity that may not have been reported earlier.

The case highlights the growing regulatory scrutiny facing major financial institutions and reinforces the expectation that banks must maintain effective internal safeguards to prevent illicit funds from moving through the global financial system.

Source: CNBC — Bank of America and US Treasury money laundering enforcement action, October 13, 2026