Bank of America Fined $1.2 Billion for Failing to Catch Money Laundering

Bank of America has been fined $1.21 billion by U.S. regulators for failing to catch and report suspicious money activity. The Treasury Department called it the third-largest fine in its history. Regulators said the bank missed more than $5 billion in transactions that could have been tied to crimes. About $1 billion of those were linked to national security risks, meaning they could have helped dangerous groups move money illegally.

The Treasury Department said the bank relied too much on tips from law enforcement and other financial institutions instead of watching for problems on its own. Regulators said it 'prioritized its revenues,' which means it focused on making money instead of following the rules. Treasury Secretary Scott Bessent warned that when a large bank fails at this job, risks spread to the whole U.S. financial system. He said banks are 'on the front lines of protecting our economic and national security.'

As part of the penalty, Bank of America must hire an outside company to review past transactions that were not caught. That reviewer will report any suspicious activity to FinCEN, a government agency that tracks financial crimes. This step is meant to hold the bank accountable and make sure it does not repeat the same mistakes. The review is required under a legal agreement called a consent order.

Bank of America said it is working hard to fix the problems and has already spent billions on technology to fight financial crime. A company spokesperson said thousands of employees are dedicated to this work. The bank also said its earnings report would include a $1.2 billion charge that will lower its per-share income by about 17 cents. That charge is not tax-deductible, making it even more costly for the bank.

The fine is split among several regulators. The Office of the Comptroller of the Currency issued a $750 million penalty — the largest in that agency's history — saying the bank's monitoring system was 'deficient and ineffective.' The bank also paid $11.6 million for more than 400 violations of sanctions laws, which ban doing business with countries like Russia and Iran. These sanctions violations happened when the bank mistakenly processed payments that broke those rules.

The news hurt Bank of America's stock price, which fell 2.7% in after-hours trading. An analyst from UBS said investors may now worry about higher costs and whether the bank can keep buying back its own shares. Regulators did not impose an asset cap, so the bank can still grow in size. The fine came just days after American Express was fined $350 million for similar anti-money laundering failures, suggesting regulators are cracking down across the banking industry.