Bank of America Hit With $1.2B Penalty for AML Failures
The Treasury Department fines Bank of America $1.2 billion for AML and sanctions violations.
Why it matters: This massive fine signals continued regulatory focus on anti-money laundering adherence, a critical area for legal and compliance teams to monitor carefully.
- $1.2 billion penalty imposed by FinCEN for failing to report national security risks and Chinese money laundering networks.
- OCC levies a $750 million civil penalty for an ineffective AML compliance program.
- OFAC settles for $11.6 million over sanctions violations related to Iran, Russia, narcotics, and terrorism.
- Bank of America admitted willful failure to maintain adequate AML controls, including due diligence and Suspicious Activity Reports.
On October 13, 2026, the U.S. Treasury Department announced a monumental enforcement action against Bank of America, imposing over $1.2 billion in penalties for violations of anti-money laundering (AML) and sanctions laws. This action includes multiple penalties from Treasury sub-agencies reflecting serious compliance failures.
The Financial Crimes Enforcement Network (FinCEN) led with a $1.2 billion penalty. FinCEN found that Bank of America failed to mitigate and report priority national security risks, including transactions involving Chinese money laundering networks and illicit finance activities along the southwest border. This included over $5 billion in suspicious transactions, with $1 billion posing national security threats, that were not properly reported.
In addition, the Office of the Comptroller of the Currency (OCC) imposed a $750 million civil money penalty. The OCC concluded the bank’s Bank Secrecy Act (BSA) and AML compliance program was deficient and ineffective, continuing to fall short despite a 2024 order demanding improvements.
The Office of Foreign Assets Control (OFAC) separately announced an $11.6 million settlement with Bank of America for violations of multiple sanctions programs, including those related to Iran, Russia, narcotics trafficking, and global terrorism financing.
Bank of America formally admitted to willfully violating the Bank Secrecy Act by failing to implement adequate AML controls, neglecting due diligence on correspondent accounts for foreign financial institutions, and failing to file required Suspicious Activity Reports.
“This action sends a clear message that even the biggest financial institutions are not above the law,” Treasury Secretary Scott Bessent said.
The $1.2 billion fine ranks as the third-largest penalty in Treasury Department history, following the fines against Binance in 2023 and TD Bank in 2024. It underscores a trend of intensified regulatory enforcement on AML compliance across the financial sector, evidenced also by recent penalties like the $350 million fine against American Express. Legal and compliance teams in financial institutions must stay vigilant in addressing gaps to avoid similar risks.
By the numbers:
- $1.2 billion — FinCEN penalty for failing to report priority national security risks.
- $750 million — OCC civil money penalty for ineffective AML program.
- $11.6 million — OFAC settlement over sanctions violations