U.S. Treasury Fines Bank of America $1.21 Billion Over Suspicious-Activity Reporting Failures

The US Treasury Department and other regulators have fined Bank of America $1.21 billion for failures to detect and report more than $5 billion in suspicious transactions, including approximately $1 billion linked to national-security concerns and other priority illicit-finance risks, Reuters reported.

Bank of America faces a $1.21-billion US regulatory penalty over deficiencies in its anti-money-laundering and suspicious-activity reporting controls.

The penalty is among the largest in the Treasury Department's history and includes a $750-million civil fine imposed by the Office of the Comptroller of the Currency, the largest civil penalty ever issued by that office, according to the report.

Regulators also imposed an $11.6-million penalty related to sanctions violations.

Treasury officials criticized the bank's compliance systems, saying they relied too heavily on outside inquiries from law-enforcement agencies and other financial institutions instead of proactively identifying suspicious activity through internal controls.

“Financial institutions are on the front lines of protecting our economic and national security,” Treasury Secretary Scott Bessent said in a statement.

He said failures by a major bank to meet anti-money-laundering and sanctions obligations could expose the wider financial system to illicit-finance risks.

Under the consent order, Bank of America must engage an independent third party to review past transactions, identify suspicious activity that was not detected at the time and report it to the Financial Crimes Enforcement Network (FinCEN).

A bank spokesperson said the company had invested billions of dollars in technology and employed thousands of people to combat financial crime.

The bank also said it was committed to completing the work required by regulators.

Bank of America said the penalty would be recorded as a non-tax-deductible charge in its third-quarter results, reducing quarterly net income by approximately 17 cents per share.