What changed
Bank of America will pay $1.2bn in penalties after regulators found it failed to report more than $5bn in suspicious activity, including $1bn judged to pose national-security and illicit-finance risks. The settlement includes a record $750m penalty from the Office of the Comptroller of the Currency and an OFAC settlement tied to 475 apparent sanctions violations involving Russia, Iran, narcotics and global terrorism.
Why it matters
This was not just a paperwork failure. Regulators said Bank of America leaned too heavily on law enforcement and other banks to identify suspicious transactions, effectively outsourcing a core responsibility of its own controls. The alleged activity included possible Chinese money-laundering networks and trade-based laundering linked to the southwest border.
The size of the penalty reflects the bank’s importance to the US financial system. Treasury Secretary Scott Bessent said failures at a bank of this scale can expose the wider system to illicit-finance risks. Bank of America admitted it willfully violated the Bank Secrecy Act by failing to maintain a compliant anti-money-laundering programme, conduct required checks on foreign correspondent accounts and file suspicious activity reports.
The timing also makes the cost immediately visible. The announcement came less than 24 hours before the bank’s quarterly earnings release, and Bank of America said the charge will reduce third-quarter net income by about 17 cents per share. It said remediation costs are already part of its current expense base, but the report does not establish whether further penalties or restrictions will follow.
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