Bank of America Faces $1.2 Billion Penalty for Ignoring Financial Risk Rules
Washington, Tuesday, 13 October 2026.
Bank of America was fined $1.2 billion after admitting to willfully ignoring over $5 billion in suspicious transactions tied to foreign money laundering networks.
Regulatory Enforcement and Compliance Failures
On Tuesday, 13 October 2026, the U.S. Department of the Treasury announced a historic $1.2 billion penalty against Bank of America (NYSE: BAC) for systemic failures in anti-money laundering compliance [1][2]. This enforcement action represents the third-largest fine in Treasury history, signaling heightened federal scrutiny on major financial institutions regarding illicit finance risks [2][3]. The bank admitted to willfully violating the Bank Secrecy Act by failing to report over $5 billion in suspicious transactions over multiple years [1][5]. Regulators identified that more than $1 billion of the unreported activity involved national security risks, including Chinese money-laundering networks and illicit finance along the southwest border [2][5].
The Treasury Department stated that the bank effectively outsourced monitoring duties to third parties, prioritizing revenue over compliance resources during the violation period [1][4]. This behavior persisted despite a December 2024 cease-and-desist order intended to remediate deficient compliance systems [1]. Treasury Secretary Scott Bessent emphasized that even the biggest financial institutions are not above the law when such failures expose the U.S. financial system to significant risks [3][5]. The Financial Crimes Enforcement Network (FinCEN) assessed the primary penalty for the failure to mitigate and report these priority national security risks [3][4].
Financial Impact and Remediation Requirements
The total penalty structure includes a record $750 million civil money penalty from the Office of the Comptroller of the Currency, which constitutes a substantial portion of the total assessment [3][4]. When analyzing the OCC’s contribution relative to the total FinCEN assessment, the regulatory body’s penalty represents 62.5 percent of the primary fine amount [2][4]. Additionally, a separate $11.6 million settlement was reached with the Office of Foreign Assets Control regarding sanctions violations involving Russia, Iran, and other programs [1][3]. Following the announcement, Bank of America’s stock fell approximately 2% in after-hours trading on Tuesday [2][5].
The bank confirmed it will record a non-tax-deductible charge of $1.2 billion in its third-quarter 2026 results, impacting earnings by approximately 17 cents per share [2][5]. Moving forward, the institution must hire an outside firm to conduct retrospective reviews and submit to independent monitoring focused on border operations and sanctioned regions [1][4]. Bank of America stated it has invested billions in technology and dedicated thousands of employees to combat financial crime to resolve the deficiencies [2][5]. The bank is scheduled to report its third-quarter earnings Wednesday morning, where these charges will be reflected [2][5].