In brief
U.S. Treasury officials fined Bank of America $1.2 billion after the bank failed to flag over $5 billion in suspicious transactions, including deals tied to Chinese laundering networks. The settlement combined penalties from the OCC and OFAC, reflecting alleged sanctions breaches involving Russia, Iran and narcotics. The bank’s response underscored a commitment to overhaul internal controls, although the fine will hit earnings the following quarter. Regulators warn the misconduct exposes the broader U.S. financial system to significant illicit‑finance risk.
A U.S. Treasury Department statement on Tuesday revealed the June‑2026 fine is the third‑largest ever imposed on a bank. The penalty stems from failures to detect and report more than $5 billion in suspicious activity—including dealings linked to Chinese money‑laundering schemes and trade‑based schemes tied to the U.S. southwest border—over a five‑year period.
Bank of America admitted it “willfully violated” the Bank Secrecy Act by neglecting to maintain a compliant anti‑money‑laundering (AML) program, perform due diligence on foreign correspondent accounts, and file required suspicious‑activity reports. The corporation said that it has already allocated significant resources to remediate its internal controls and that the $1.2 billion charge will appear as a non‑tax‑deductible expense, reducing net income by about $0.17 per share for the same quarter.
The fine is comprised of penalties from the Office of the Comptroller of the Currency (OCC) and the Office of Foreign Assets Control (OFAC). The OCC’s $750‑million penalty was its biggest ever, while OFAC cited 475 sanctions violations—including breaches of sanctions on Russia, Iran, narcotics and global terrorism—leading to an $11.6‑million settlement that the agency deemed “non‑egregious.”
Treasure Secretary Scott Bessent warned that a bank of this size not meeting AML and sanctions obligations “exposes the entire U.S. financial system to significant illicit‑finance risks.” He noted the bank’s overreliance on third‑party inquiries rather than internal AML checks, effectively outsourcing the proactive detection and reporting it was required to perform.
Key facts:
- Fine: $1.2 billion ($910 million GBP)
- Oversight bodies: OCC and OFAC
- Suspected violations: 475 sanctions breaches, plus money‑laundering failures
- Impact: 17‑cent per share hit on Q3 net income
- Bank’s response: commitment to tighten internal controls and remediate deficiencies
