By SCM International Desk I Wednesday, Oct. 14, 2026
WASHINGTON — Federal regulators on Tuesday hit Bank of America with $1.21 billion in civil penalties, citing systemic, yearslong breakdowns in the institution’s anti-money laundering controls and enforcement of international sanctions.
The penalty marks the third-largest fine ever levied by the U.S. Department of the Treasury. It sends a clear signal that the federal government is intensifying its crackdown on major financial institutions that fail to track and report potentially illicit capital flows.
”Even the biggest financial institutions are not above the law,” Treasury Secretary Scott Bessent said in a statement. He added that the bank’s non-compliance exposed “the entire U.S. financial system to significant illicit finance risks.”
According to regulatory enforcement documents, Bank of America repeatedly failed to maintain an effective program under the Bank Secrecy Act—a key federal statute requiring financial firms to assist government agencies in preventing and detecting money laundering.
The Treasury Department emphasized that rather than maintaining adequate internal transaction monitoring systems, Bank of America over-relied on inquiries from outside parties, including law enforcement and competing financial firms. By doing so, federal officials said, the bank effectively outsourced a substantial portion of its legal obligations to detect and proactively report suspicious financial activity.
Additionally, the Office of Foreign Assets Control (OFAC) cited hundreds of apparent violations involving improper payment transfers that ran afoul of U.S. sanctions programs targeting foreign actors, including entities in Russia and Iran.
The penalties include a $750 million fine imposed by the Office of the Comptroller of the Currency (OCC), representing the largest administrative penalty the bank regulatory agency has ever levied.
The enforcement action follows years of regulatory scrutiny. In late 2024, the OCC issued a formal cease-and-desist order directing Bank of America to correct severe deficiencies in its internal compliance monitoring.
Regulators concluded that despite early warnings, the bank knew for years that its systems were missing mandatory reporting deadlines for suspicious activity reports (SARs) but failed to fix the core technological and structural deficiencies.
The penalty arrives during a broader, industrywide push by federal enforcement agencies to tighten bank compliance regarding foreign funds and illicit transactions. Just days earlier, American Express faced a $350 million penalty over separate anti-money laundering compliance issues.
As part of the settlement agreement, Bank of America admitted that it willfully violated provisions of the Bank Secrecy Act. The bank agreed to implement structural reforms, including updated internal testing, enhanced audit mechanisms, mandatory employee training programs, and direct oversight enhancements under supervision by federal auditors.
Financial and Market Impact
In a public statement, Charlotte, North Carolina-based Bank of America acknowledged the enforcement resolutions, noting that it has already invested substantial resources to upgrade its compliance staff and surveillance software.
”Financial crime compliance is serious, and we are responsible for getting it right,” the bank said in a statement.
The bank confirmed it will record a non-deductible charge of approximately $1.2 billion in its quarterly financial results, reducing net profit per share for the quarter by an estimated 17 cents.
