Bank of America Hit With $1.2 Billion Fine After Failing to Report $5 Billion in Suspicious Transactions

Bank of America has been hit with more than $1.21 billion in federal penalties after admitting to willfully violating U.S. anti-money laundering laws and failing to report more than $5 billion in suspicious transactions, including activity potentially linked to Chinese money laundering networks and illicit financing along the southern border.

Announced October 13, 2026, the enforcement action marks the third-largest penalty in U.S. Treasury Department history. Federal regulators found that the nation's second-largest bank allowed serious compliance failures to persist for years, even after being ordered to strengthen its safeguards against financial crime in December 2024.

More than $1 billion of the suspicious transactions involved potential national security threats and other high-priority financial crime risks, according to Treasury. Investigators identified activity showing signs of Chinese money laundering networks, fraud and possible trade-based money laundering connected to the U.S. southwest border.

In its settlement with the Treasury's Financial Crimes Enforcement Network (FinCEN), Bank of America admitted to willfully violating the Bank Secrecy Act by failing to maintain adequate safeguards against money laundering and properly report potentially suspicious transactions to federal authorities.

The penalties include a $1.2 billion assessment by FinCEN and a record $750 million fine from the Office of the Comptroller of the Currency (OCC), which will be credited toward the FinCEN amount. A separate $11.6 million sanctions settlement brings the total to approximately $1.21 billion.

Federal investigators found that Bank of America relied heavily on inquiries from law enforcement and other financial institutions to identify questionable payments that its own monitoring systems should have detected. Suspicious activity accumulated without timely investigation, while internal testing exposed weaknesses that remained unresolved.

Compliance personnel also raised concerns about customers receiving substantial payments from unknown third parties, including transactions potentially connected to narcotics trafficking, fraud, and international trade schemes. According to Treasury, the bank failed to respond adequately to mounting warning signs while prioritizing revenue and limiting resources devoted to compliance.

OCC examiners found that Bank of America's systems inadequately monitored trillions of dollars in transactions, resulting in delayed reports involving billions of dollars in potentially suspicious activity. Employees responsible for identifying and investigating such payments lacked sufficient training and expertise, while internal audits missed longstanding deficiencies.

Regulators had already intervened in December 2024, issuing a cease-and-desist order requiring Bank of America to overhaul its anti-money laundering program. More than a year later, potentially suspicious transactions were still failing to reach investigators responsible for determining whether federal reports were necessary. A separate monitoring gap also allowed potential trade-based money laundering activity to pass through the bank.

Treasury's Office of Foreign Assets Control (OFAC) separately identified 475 apparent sanctions violations involving Russia, Belarus, Iran, Burma, Somalia, narcotics trafficking and global terrorism.

Among the violations were payments routed through blocked banks, transactions involving sanctioned individuals, delays in updating sanctions watchlists and errors involving restricted business accounts. OFAC classified the apparent violations as non-egregious, although most had not been voluntarily disclosed. The settlement also included commitments to improve sanctions compliance, training and internal oversight.

Bank of America acknowledged its responsibility to address the deficiencies. A spokesperson said the company had invested billions of dollars in technology and assigned thousands of employees to financial crime prevention, adding that it was making substantial progress toward completing the improvements required by regulators.

Bank of America said it would record a $1.2 billion non-tax-deductible charge against its third-quarter earnings, reducing net income by approximately 17 cents per share.

Under the FinCEN consent order, Bank of America must hire an independent consultant to examine past transactions dating back to January 2022 and identify suspicious activity that previously escaped detection. Any additional transactions requiring disclosure must be reported to federal authorities.

The consent order also requires independent assessments of the bank's monitoring systems, customer due diligence procedures, and foreign correspondent accounts, with particular scrutiny of transactions potentially connected to drug cartels, narcotics trafficking, Iran, and Russia.