Bank Of America Reeling From $1.2bn Money Laundering Fine

Bank of America has been fined $1.2bn by US regulators for failing to detect and report billions of dollars in suspicious transactions, resulting in a sharp drop in third-quarter earnings at the country’s second-largest bank.

The US Treasury Department said the bank had failed to report more than $5bn in suspicious activity, including over $1bn linked to national security risks and other priority financial crime concerns. The penalty is the third largest in the department’s history.

The Office of the Comptroller of the Currency (OCC) imposed a $750m civil penalty, its largest ever, citing shortcomings in the bank’s anti-money laundering controls that had been identified in a 2024 enforcement order. The Treasury’s Office of Foreign Assets Control also fined the lender $11.6m over more than 400 apparent sanctions violations involving payments linked to countries including Russia and Iran.

Treasury Secretary Scott Bessent stressed the key role that banks and financial institutions play in protecting national security, saying the failures “extend far beyond its own walls” and exposed the US financial system to “significant illicit finance risks”.

The penalty contributed to a weaker-than-expected third quarter. Net income fell to $6.9bn, a 17% decrease from $8.3bn a year earlier, while earnings of 91 cents per share missed analysts’ expectations of $1.10. Meanwhile, shares fell by around 8% to their lowest price since May.

The settlement requires Bank of America to appoint an independent third party to review past transactions, identify suspicious activity that went undetected, and report it to the government’s Financial Crimes Enforcement Network.

Bank of America said it had invested billions of dollars in technology and assigned thousands of employees to strengthen its financial crime controls and was committed to completing the work required.