Bank of America has been ordered to pay more than $1.21 billion in federal penalties for widespread failures to prevent money laundering, report suspicious transactions and comply with U.S. sanctions laws. The Treasury Department announced the enforcement actions on October 13, 2026, describing them as among the largest financial crime penalties in its history.
The penalties follow investigations that found serious weaknesses in the bank's systems for identifying potentially illegal financial activity. Regulators said Bank of America failed to properly investigate and report more than $5 billion in suspicious transactions, including more than $1 billion involving national security and other priority financial crime risks.
The enforcement action includes a $1.2 billion penalty assessed by the Financial Crimes Enforcement Network, known as FinCEN. That amount is the third-largest penalty in Treasury Department history.
The Office of the Comptroller of the Currency also assessed a $750 million penalty, the largest in that agency's history. However, that amount is credited toward FinCEN's penalty, meaning the two fines are not simply added together.
Separately, Bank of America agreed to pay approximately $11.6 million to settle allegations that it processed transactions violating U.S. sanctions programs.
The combined penalties exceed $1.21 billion and represent a major regulatory setback for one of the nation's largest financial institutions.
Regulators Identify Billions in Suspicious Transactions
Federal investigators found that Bank of America's anti-money laundering program failed to identify, review and report suspicious activity as required by law.
The bank processes enormous volumes of financial transactions, creating substantial responsibilities for monitoring potential criminal activity.
According to the Treasury Department, Bank of America processes approximately $5 trillion annually in consumer payments and about $450 trillion in corporate payments.
Those transactions involve customers, businesses and financial institutions across the United States and international markets.
Regulators said weaknesses in the bank's monitoring systems allowed potentially suspicious transactions to go without proper investigation or timely reporting.
The activity included transactions associated with suspected Chinese money laundering networks and illicit financial operations along the southwestern U.S. border.
Investigators also identified possible trade-based money laundering, a method that can involve disguising illegal financial transfers through international business transactions.
More than $1 billion of the suspicious activity involved national security or other priority financial crime risks, according to the Treasury.
The transactions identified as suspicious were not necessarily all proven criminal. Banks are required to report activity that meets specified warning criteria so authorities can determine whether further investigation is warranted.
The enforcement findings focused on the bank's failure to maintain the monitoring and reporting systems required by federal law.
Bank Admits Willful Violations of Federal Law
As part of its agreement with FinCEN, Bank of America admitted to willfully violating the Bank Secrecy Act.
The law requires financial institutions to maintain programs designed to detect and prevent money laundering and other financial crimes.
Banks must also file Suspicious Activity Reports when transactions meet certain conditions suggesting possible illegal conduct.
These reports provide federal investigators with information that can help identify fraud, organized crime, money laundering and terrorist financing.
Bank of America acknowledged that it failed to maintain an adequate anti-money laundering program and did not submit required reports for certain suspicious transactions.
It also admitted to deficiencies in conducting required due diligence involving correspondent accounts for foreign financial institutions.
Correspondent banking allows financial institutions to conduct transactions through other banks, including cross-border transfers. These relationships can create additional financial crime risks when monitoring and compliance procedures are inadequate.
Federal regulators said the bank's failures were particularly serious because of its size and the enormous volume of transactions it handles.
The Treasury Department described its compliance program as inadequate despite previous regulatory efforts to force improvements.
Earlier Warnings Failed to Produce Sufficient Changes
The latest penalties follow a December 2024 enforcement order issued by the Office of the Comptroller of the Currency.
That order required Bank of America to correct weaknesses in its anti-money laundering and financial crime monitoring programs.
However, regulators found that the bank had not completed many of the improvements needed to establish an effective compliance system.
The OCC said Bank of America continued to experience serious problems identifying and escalating suspicious activity for investigation.
Investigators also found weaknesses in staff training, internal auditing and oversight by senior management.
Some employees responsible for financial crime compliance lacked the necessary expertise to perform their responsibilities effectively, according to the OCC.
Regulators said the bank's internal audits failed to identify serious problems that federal examiners later uncovered.
The agency also criticized management for minimizing the seriousness of the deficiencies and failing to make corrective measures a sufficient priority.
The OCC's $750 million assessment reflects those continuing failures and is the largest financial penalty in the agency's history.
Bank of America must now undertake further corrective measures under federal supervision.
These include improvements to transaction monitoring, reporting procedures and oversight of its financial crime compliance systems.
The bank must also arrange an independent review of certain activities that were not properly investigated or reported.
Sanctions Violations Involved Russia and Iran
In addition to the money laundering findings, the Treasury Department announced a separate settlement involving violations of U.S. economic sanctions.
The Office of Foreign Assets Control, known as OFAC, reached an agreement with Bank of America concerning 475 apparent violations of multiple sanctions programs.
The affected restrictions included measures involving Russia, Belarus, Iran, Myanmar, Somalia, narcotics trafficking and global terrorism.
Regulators said the bank processed payments through prohibited financial institutions and allowed certain sanctioned individuals to conduct transactions.
Some violations occurred because the bank failed to update sanctions screening lists quickly enough after the government imposed new restrictions.
Other problems involved weaknesses in automated screening systems and employee errors.
These shortcomings allowed transactions that should have been blocked or rejected to proceed.
OFAC assessed a settlement of approximately $11.6 million, describing the apparent violations as non-egregious.
That classification does not mean the transactions were permitted. It reflects the agency's assessment of their circumstances under its enforcement guidelines.
The regulator also noted that many of the violations were not voluntarily disclosed by the bank.
Bank of America agreed to strengthen compliance training, testing, internal audits and communication with regulators.
Treasury Secretary Warns About Financial System Risks
Treasury Secretary Scott Bessent said the enforcement actions demonstrate the importance of banks protecting the financial system against criminal exploitation.
He emphasized that financial institutions play a central role in detecting transactions connected to illegal activity and national security threats.
Bessent said failures by major banks can expose the broader financial system to serious risks.
The penalties reflect the government's view that institutions handling enormous transaction volumes must maintain compliance programs capable of identifying suspicious activity.
The Treasury Department also noted that the Bank of America action ranks behind earlier major enforcement settlements involving cryptocurrency exchange Binance in 2023 and TD Bank in 2024.
Those cases similarly involved significant failures to comply with federal anti-money laundering requirements.
Financial regulators have increasingly emphasized that large institutions must invest sufficiently in compliance systems as their operations expand.
Technology, internal controls and employee training are especially important when banks process hundreds of trillions of dollars in payments annually.
Bank of America Responds to Record Penalties
Bank of America said it takes its financial crime prevention responsibilities seriously and has invested substantially in compliance technology and personnel.
The company acknowledged the need for further improvements and said it would continue working with regulators.
The enforcement announcement came shortly before Bank of America's scheduled third-quarter earnings report.
According to Reuters, the penalties are expected to reduce the bank's third-quarter earnings by approximately $1.2 billion, equivalent to about 17 cents per share.
The bank's shares fell in after-hours trading following the announcement, reflecting investor concerns about the penalties and the continuing cost of regulatory compliance.
The financial impact extends beyond the immediate payments. Bank of America will also face expenses associated with upgrading monitoring systems, conducting additional reviews and satisfying regulatory requirements.
The bank remains subject to federal oversight while implementing those changes.
Regulators will evaluate whether its revised systems can identify suspicious transactions, produce timely reports and prevent prohibited payments.
The October 13 enforcement action establishes substantial financial penalties, but it does not end the bank's compliance obligations. Its next major challenge is demonstrating that the weaknesses identified by federal investigators have been corrected and that earlier reporting failures have been adequately addressed.