Bank of America was fined $1.2 billion for violations related to money laundering
This is one of the largest fines in the history of the U.S. Department of the Treasury
Bank of America will release its third-quarter earnings report on October 14 / Photo: Unsplash/Miles Smith
The U.S. Department of the Treasury fined Bank of America, the second-largest U.S. bank, $1.2 billion for “egregious and ongoing” violations of anti-money laundering and sanctions compliance regulations. According to the ministry, the bank failed to properly report suspicious transactions totaling more than $5 billion. BofA “essentially outsourced” a key part of its compliance function in an effort to save revenue, the statement said.
Details
The claims relate to alerts regarding transactions linked to possible Chinese money laundering and illicit financing networks near the southern U.S. border, the Treasury Department said Tuesday. The total amount of the penalty imposed by the Financial Crimes Enforcement Network (FinCEN), a division of the Treasury Department, was $1.2 billion. This includes a $750 million civil penalty from the Office of the Comptroller of the Currency (OCC), one of the key U.S. banking regulators.
Separately, the Office of Foreign Assets Control (OFAC) announced an $11.6 million settlement with the bank due to “clear violations of numerous sanctions programs, including sanctions against Iran, Russia, drug trafficking, and global terrorism.”
This is the third-largest penalty in the history of the U.S. Department of the Treasury and the largest in the history of the OCC. Regulators also required Bank of America to engage an independent third party to identify previously undetected suspicious transactions and report them to FinCEN.
BofA said it has “invested billions of dollars in technology and assigned thousands of employees” to combat financial crime, according to Bloomberg. The bank claims that its team has made progress and is committed to completing the work necessary to address regulators’ concerns.
Context
The fine came as a blow to the bank on the eve of its third-quarter earnings release (scheduled for October 14), as its management faced criticism from U.S. authorities for failing to address compliance issues, the Financial Times noted. BofA warned that it expects a $1.2 trillion loss for the quarter, which would reduce its net income by approximately 17 cents per share, Bloomberg reported.
Every year, Bank of America processes hundreds of trillions of dollars in payments, the FT added.
This article was AI-translated and verified by a human editor
