Bank of America hit with $1.2bn fine for money laundering failings
The bank inadequately flagged transactions linked to potential Chinese money laundering networks, the Treasury said.
Bank of America has been hit with a $1.2bn (£910m) penalty for failing to spot possible money laundering and other unlawful activity, the US Treasury Department said on Tuesday.
Treasury said the banking giant did not report more than $5bn in suspicious activity to the government, including $1bn that carried national security and illicit finance risks.
Among the failures were transactions that may have involved Chinese money laundering networks or trade-based laundering "with a substantial nexus to the southwest border", according to Treasury.
"Our team is far along with and committed to completing the work required to address the issues raised by our regulators," Bank of America told the BBC.
The announcement came less 24 hours before Bank of America was set to release its quarterly earnings on Wednesday morning.
"Our third-quarter results will include a non-tax-deductible charge of $1.2 billion impacting net income by approximately 17 cents per share," the bank said in an emailed statement.
"We have already dedicated substantial personnel and resources to our ongoing remediation efforts, and those costs are in the current expense base," it added.
In announcing the fine, the third-largest the department has ever imposed, Treasury Secretary Scott Bessent said: "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 US financial system to significant illicit finance risks."
Treasury said the bank relied too heavily on questions from outside parties such as law enforcement and other financial institutions rather than its own internal controls.
As a result, it "effectively outsourced to third parties a substantial portion of its proactive detection and reporting obligations," the department said.
Under the settlement, Bank of America admitted that it "willfully violated" the Bank Secrecy Act by failing to keep a compliant anti-money laundering programme, carry out required due diligence on foreign correspondent accounts and submit suspicious activity reports, Treasury said.
The $1.2bn fine included penalties from the Office of the Comptroller of the Currency (OCC) and the Office of Foreign Assets Control (OFAC).
The OCC's $750bn fine was its largest penalty ever.
OFAC said its settlement with the bank related to 475 apparent violations of sanctions programmes, including those involving Russia and Iran, narcotics, and global terrorism.
The $11.6m settlement amount reflected OFAC's finding that Bank of America's apparent violations were "non-egregious", the agency said.