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US Treasury Hits Bank of America with Massive Fine
14 Oct
Summary
- Bank of America fined $1.2 billion for violating money laundering laws.
- The bank failed to report over $5 billion in suspicious financial activity.
- The penalty is the third-largest fine ever imposed by Treasury's FinCEN.
The US Treasury Department announced a significant penalty of over $1.2 billion against Bank of America on Tuesday. This action stems from accusations that the bank violated anti-money laundering and sanctions laws, failing to mitigate and report critical national security risks.
Specifically, the bank is cited for its failures concerning Chinese money laundering networks and illicit finance along the southwest border. Treasury Secretary Scott Bessent stated that such failures expose the entire U.S. financial system to significant illicit finance risks, sending a clear message that no institution is above the law.
Bank of America acknowledged working with regulators and highlighted billions invested in combating financial crime. However, the $1.2 billion fine, which includes a $750 million civil penalty to the OCC, will impact quarterly earnings, reducing net income by approximately 17 cents per share.
This fine is the third-largest ever imposed by FinCEN, following penalties against Binance and TD Bank. Bank of America admitted to willfully failing to have proper safeguards and report suspicious activity, including transactions tied to narcotics trafficking.
CNN reports indicate a design flaw in the bank's sanctions-screening filter prevented proper prioritization of certain prohibited transactions. Experts suggest that while the fine is substantial, individual executives should also face personal repercussions to deter future illicit activities.
