October 13, 2026
Reporter: Joseph Wilson
Bank of America has been hit with more than $1.21 billion in penalties by U.S. financial regulators after authorities found widespread failures in the bank’s systems for detecting and reporting suspicious financial activity, including transactions linked to money laundering and other illicit finance risks.
The enforcement action, announced Tuesday by the U.S. Department of the Treasury, includes a $1.2 billion penalty from the Financial Crimes Enforcement Network (FinCEN), a $750 million civil penalty imposed by the Office of the Comptroller of the Currency (OCC), and an additional $11.6 million settlement with the Office of Foreign Assets Control (OFAC) over apparent sanctions violations. The Treasury described the action as the third-largest penalty in its history, while the OCC penalty is the largest ever imposed by that regulator.
The penalties target failures in Bank of America’s anti-money-laundering and sanctions compliance programs. According to Treasury officials, the bank failed to adequately identify, investigate and report more than $5 billion in suspicious transactions, including approximately $1 billion involving priority national-security and other major illicit-finance risks.
Treasury Secretary Scott Bessent said banks play a critical role in protecting the U.S. financial system because they are among the first lines of defense against money laundering and other forms of financial crime.
The government said Bank of America’s shortcomings included failures involving Chinese money-laundering networks and illicit financial activity along the U.S. southwest border. The bank also faced scrutiny over transactions associated with sanctions programs involving countries and activities including Iran, Russia, narcotics and global terrorism.
Regulators accuse bank of longstanding compliance failures
The OCC said Bank of America’s Bank Secrecy Act and anti-money-laundering compliance program remained “deficient and ineffective,” despite the bank having previously agreed to a regulatory order requiring it to correct serious deficiencies.
The regulator said the bank’s transaction-monitoring system failed to properly monitor trillions of dollars in transactions. As a result, the bank filed large numbers of suspicious activity reports late, including reports involving billions of dollars in transactions that contained indicators of possible money laundering.
The OCC also said Bank of America had known for years that potentially suspicious activity was not consistently being escalated to investigators for review. Regulators found that key compliance employees lacked sufficient expertise and training, while the bank's internal audit function failed to identify problems that regulators later uncovered.
The problems continued even after Bank of America entered into a December 2024 cease-and-desist order with the OCC. Regulators said the bank failed to complete important corrective measures and continued to have significant weaknesses in its monitoring and reporting systems.
$750 million OCC penalty is the agency's largest ever
The OCC's $750 million civil penalty represents the largest monetary penalty ever assessed by the agency against a bank.
The regulator said the size of the penalty reflects the seriousness and persistence of Bank of America's deficiencies, particularly because the institution is the second-largest bank in the United States and a globally systemically important financial institution.
The OCC said such institutions have a heightened responsibility to maintain effective controls because failures at a major bank can expose the broader financial system to significant risks.
Bank of America processes hundreds of trillions of dollars in transactions globally each year, according to the OCC.
Sanctions violations add another $11.6 million
Separate from the anti-money-laundering penalties, Bank of America agreed to pay $11.6 million to OFAC to resolve apparent violations of U.S. sanctions programs.
Treasury said the violations involved transactions connected to multiple sanctions programs, including those targeting Iran and Russia, as well as programs addressing narcotics and global terrorism.
The sanctions settlement adds another layer to the government's concerns about the bank's financial-controls systems, particularly its ability to identify transactions that could violate U.S. restrictions.
Bank says it has invested billions in compliance
Bank of America acknowledged the compliance failures and said it is committed to addressing the concerns raised by regulators.
A bank spokesperson said the institution has invested billions of dollars in technology and employs thousands of people dedicated to combating financial crime. The bank also said its compliance teams were making substantial progress on the corrective measures required by regulators.
The bank's third-quarter financial results, scheduled to be released Wednesday, are expected to reflect a $1.2 billion non-tax-deductible charge related to the penalties. Reuters reported that the charge is expected to reduce quarterly net income by approximately 17 cents per share.
Bank of America shares fell in after-hours trading following the announcement, adding to investor concerns about the financial and reputational consequences of the enforcement action.
Analysts also raised questions about whether increased regulatory costs and remediation expenses could affect the bank's ability to maintain its roughly $6 billion quarterly share-buyback pace.
Independent review ordered
As part of the FinCEN resolution, Bank of America must retain an independent third party to examine past transactions and identify suspicious activity that the bank failed to detect or report at the time.
Any previously undisclosed suspicious transactions identified through that review must be reported to FinCEN, the Treasury agency responsible for combating money laundering, terrorist financing and other illicit financial activity.
The requirement could result in additional suspicious activity reports being filed as investigators examine historical transactions.
The government said the enforcement action is intended not only to penalize past failures but also to force the bank to strengthen its systems and prevent similar problems from continuing.
Comes days after American Express penalty
The Bank of America enforcement action follows a separate regulatory crackdown involving American Express, which was fined $350 million last week after regulators found serious deficiencies in its anti-money-laundering program.
In that case, the OCC said American Express had failed to adequately identify, evaluate and report roughly $13 billion in suspicious activity over about a decade. Regulators cited insufficient resources, inexperienced personnel, weak training and internal-control problems.
The actions against the two major financial institutions underscore the growing attention U.S. regulators are placing on banks' ability to monitor enormous volumes of transactions and identify financial activity associated with criminal networks.
National-security implications
The Bank of America case extends beyond ordinary regulatory compliance because U.S. authorities linked some of the missed suspicious activity to national-security risks.
Treasury said financial institutions are essential to preventing illicit networks from moving money through the legitimate banking system. When a major bank fails to identify suspicious transactions, investigators can lose an important opportunity to disrupt money laundering, sanctions evasion and other criminal financial activity.
The government therefore characterized the enforcement action as both a financial penalty and a warning to the banking industry.
The scale of the penalties also reflects the government's determination to hold major financial institutions accountable when their compliance systems fail repeatedly.
For Bank of America, the immediate challenge will be completing the corrective measures required by regulators while managing the financial cost of the enforcement action. The bank will also face scrutiny from investors as it reports third-quarter results and explains how the penalties and compliance requirements will affect its operations.
The enforcement action does not mean that every transaction identified by regulators was criminal or that Bank of America itself participated in money laundering. Rather, regulators found that the bank failed to meet legal obligations requiring it to monitor transactions, identify suspicious activity and file appropriate reports with government authorities.
The case nevertheless represents one of the most significant U.S. banking enforcement actions of 2026 and places renewed pressure on financial institutions to strengthen the systems designed to keep illicit money out of the global financial system.