The United States Treasury Department has imposed US$1.2 billion (approximately RM5 billion) in penalties on Bank of America over alleged violations of anti-money laundering and sanctions laws, marking the third-largest penalty in the department’s history.
The penalty against America’s second-largest bank was announced on Tuesday by the Treasury Department, which said the bank had failed to adequately address and report major national security risks.
The Financial Crimes Enforcement Network (FinCEN), a Treasury agency, said the penalty was imposed over the bank’s failure to mitigate and report risks involving Chinese money laundering networks and illicit financial activities along the US-Mexico border.
The penalty includes US$750 million to be paid to the Office of the Comptroller of the Currency (OCC), the largest fine ever imposed by the federal banking regulator.
Bank of America also reached an US$11.6 million settlement with the Treasury’s Office of Foreign Assets Control (OFAC) over apparent violations of several sanctions programmes involving Iran, Russia, narcotics and international terrorism.
“When a bank of this size fails to meet its anti-money laundering and sanctions obligations, the consequences extend far beyond its own walls, exposing the entire US financial system to significant illicit finance risks,” Treasury Secretary Scott Bessent said.
“Today’s actions send a clear message that even the biggest financial institutions are not above the law.”
The Treasury Department said Bank of America admitted it had wilfully violated the Bank Secrecy Act of 1970, which requires financial institutions to assist the government in detecting and preventing money laundering.
In response, Bank of America said it had worked with regulators to resolve the penalties, which stemmed from violations identified in a previously reported 2024 OCC consent order and a FinCEN investigation.
“Financial crime compliance is serious, and we are responsible for getting it right,” the bank said in a statement.
It added that it had invested billions of dollars in technology and dedicated thousands of employees to combating financial crime, while committing to completing the work required by regulators.
The latest penalty ranks behind a roughly US$4 billion settlement with cryptocurrency exchange Binance in 2023 and an approximately US$3 billion settlement with Canada-based TD Bank in 2024.
Both cases were part of broader US efforts to strengthen anti-money laundering enforcement and improve compliance within the financial sector.
