Bank of America fined $1.2bn over failing to stop money laundering

Key Points:

• Bank of America has been fined $1.2 billion by the US Treasury Department for failing to detect and report over $5 billion in suspicious activities, including transactions linked to potential Chinese money laundering and trade-based laundering near the southwest border.
• The bank admitted to willfully violating the Bank Secrecy Act by not maintaining a compliant anti-money laundering program, neglecting due diligence on foreign correspondent accounts, and failing to file required suspicious activity reports.
• The Treasury criticized Bank of America for relying heavily on external parties like law enforcement for detection and reporting, effectively outsourcing its anti-money laundering responsibilities instead of using internal controls.
• This $1.2 billion penalty, one of the largest ever imposed by the Treasury, will impact Bank of America's third-quarter earnings by approximately 17 cents per share and includes penalties from the OCC and OFAC.
• Treasury Secretary Scott Bessent emphasized that the bank's failures pose significant risks to the entire US financial system beyond just the institution itself.