Bank of America fined $1.2bn for money laundering failures

Key Points:

• Bank of America has been fined $1.21 billion by US regulators for failing to detect and report over $5 billion in suspicious activities, including $1 billion posing national security risks, marking the third-largest penalty in Treasury Department history.
• The Treasury criticized the bank for prioritizing revenue over compliance and relying too heavily on external inquiries rather than internal controls to detect illicit financial activity.
• As part of the consent order, Bank of America must hire an independent third party to review past transactions and report previously undetected suspicious activities to FinCEN.
• The $1.2 billion non-tax-deductible charge related to the fine will reduce the bank’s third-quarter net income by about 17 cents per share, contributing to a 2.7% drop in after-hours trading.
• In addition to the Treasury fine, the Office of the Comptroller of the Currency imposed a $750 million civil penalty for anti-money laundering failures, and the Office of Foreign Assets Control fined the bank $11.6 million for sanction violations involving payments to Russia, Iran, and other countries.