Bank of America faces a $1.21 billion penalty for sweeping anti‑money‑laundering and sanctions violations. The Treasury Department announced the largest OCC penalty in history and a record FinCEN fine.
Penalties and Settlement
Regulators imposed a $1.2 billion civil penalty on the second‑largest U.S. bank, the biggest ever levied by the OCC and the third‑largest by FinCEN. The fine includes a $750 million credit for an OCC penalty and a $11.6 million OFAC settlement, bringing total penalties to roughly $1.21 billion.
Financial Impact
Bank of America will record a $1.2 billion non‑tax‑deductible charge in its third‑quarter results, trimming net income by about 17 cents per share. The company acknowledged the violations, saying it has poured billions into technology and staff to combat financial crime.
Workforce and Infrastructure
Bank of America pledged to hire 1,000 additional apprentices and allocate $150 million to workforce development programs. The bank said the investments will strengthen its talent pipeline while it addresses the compliance shortcomings.
The firm also unveiled a $250 billion plan to finance U.S. infrastructure projects ranging from data centers to energy, semiconductors and transportation. Treasury noted the bank failed to report more than $5 billion in suspicious transactions, including $1 billion tied to national‑security risks such as Chinese money‑laundering networks.
Regulatory Criticism
Comptroller Jonathan Gould condemned the bank for ignoring repeated warnings and for persistent gaps that allowed trade‑based money‑laundering to slip through. The OCC issued a cease‑and‑desist order in December 2024, yet internal controls remained broken.
Market Reaction
Shares slipped 0.91% to $51.23 on the day, underscoring investor unease despite the bank’s compliance pledges.
CEO Response
CEO Brian Moynihan dismissed recession worries, even as Wall Street watches the Fed’s hawkish stance. He reiterated the bank’s commitment to modernizing infrastructure and assisting law‑enforcement investigations.
Compliance Obligations
As part of the settlement, Bank of America must hire an independent reviewer to audit past suspicious transactions and overhaul its AML controls, including training, testing and audits. The bank also agreed to stricter sanctions compliance measures covering employee education and regulator cooperation.
