The United States government has imposed a $1.2 billion penalty on Bank of America over serious failures in its anti-money laundering controls and alleged violations of international sanctions, marking one of the largest enforcement actions against a financial institution in the country’s history.
The US Department of the Treasury announced the sanctions on Tuesday, October 13, 2026, saying the bank failed to adequately identify, investigate and report suspicious financial transactions, including activities associated with Chinese money laundering networks and illicit finance along the southwestern US border
The penalty, assessed through the Treasury’s Financial Crimes Enforcement Network (FinCEN), is the third-largest in the department’s history.
The Office of the Comptroller of the Currency (OCC) also announced a $750 million civil money penalty against the bank for deficiencies in its anti-money laundering compliance programme. The OCC’s penalty is the largest in the agency’s history.
According to the Treasury Department, Bank of America failed to report more than $5 billion in suspicious transactions to FinCEN. Some of the transactions involved more than $1 billion in activities linked to national security concerns and other priority illicit-finance risks.
The authorities said the bank’s shortcomings included inadequate transaction monitoring, insufficient customer due diligence and failures to submit suspicious activity reports promptly.
Regulators also criticized the institution for relying excessively on information from law enforcement agencies and other financial institutions rather than strengthening its own internal systems for detecting potentially illegal transactions.
The Treasury said the bank had prioritised revenue while failing to devote adequate resources to compliance obligations, despite longstanding concerns about its controls.
US Treasury Secretary Scott Bessent said failures by major financial institutions could have consequences extending beyond individual banks, exposing the wider American financial system to illicit financial activities.
He stressed that the enforcement action demonstrated that even the country’s largest financial institutions were not above the law.
In a separate action, the Treasury’s Office of Foreign Assets Control reached an $11.6 million settlement with Bank of America over apparent violations of several sanctions programmes.
The programmes covered restrictions relating to Iran, Russia, narcotics and global terrorism
The enforcement measures also come against the background of an earlier regulatory order issued in December 2024, which required the bank to address deficiencies in its compliance programme.
The OCC said significant weaknesses persisted despite that intervention, including failures to escalate suspicious transactions for investigation and inadequate staff training.
Under the regulatory action, the bank will be required to take remedial measures to strengthen it s monitoring and reporting systems and address previously identified weaknesses.
The penalties are expected to have a substantial financial impact on the institution, with the fine potentially reducing its third-quarter earnings by approximately $1.2 billion, or 17 cents per share, according to Reuters.
Bank of America has said it is committed to addressing compliance concerns and has invested significantly in technology and personnel to strengthen its financial crime controls.
The case underscores the growing determination of US regulators to hold major financial institutions accountable for shortcomings in detecting money laundering, suspicious transactions and sanctions-related violations.
For international banks operating across multiple jurisdictions, the action also highlights the importance of effective compliance systems, rigorous customer checks and timely reporting of transactions that could expose financial institutions to legal and reputational risks.
