Bank of America Fined $1.2 Billion for Anti-Money Laundering Failures

Bank of America has been fined a total of $1.2 billion by the Office of the Comptroller of the Currency (OCC) and the Financial Crimes Enforcement Network (FinCEN) due to significant failures in its compliance with the Bank Secrecy Act (BSA) and anti-money laundering (AML) regulations. This penalty follows the bank's admission that it missed reporting over $5 billion in suspicious activities, with approximately $1 billion linked to national security risks, including suspected Chinese money laundering networks.

The OCC's fine of $750 million is noted as the largest civil money penalty ever issued by the bureau. FinCEN is responsible for the remaining portion of the fine, which credits the OCC's amount against its total penalty of $1.2 billion. Following the announcement, Bank of America's stock price dropped significantly, falling from around $62.69 in mid-September to below $50 by October 14.

The FinCEN order highlighted that Bank of America “willfully failed to implement and maintain adequate internal controls for BSA compliance,” leading to delayed reports for suspicious activities. The identified suspicious transactions included high volumes of unusual credit card purchases and large wire transfers to counterparties in China without clear business purposes.

Furthermore, the report indicated that the bank's due diligence on correspondent accounts held by its foreign branches was inadequate, with some regulatory questionnaires being completed on behalf of multiple branches rather than individually.

This record-setting fine follows a recent $350 million penalty against American Express, underscoring a growing trend of regulatory scrutiny within the banking sector.