Nothing says earnings week like a $1.2 billion check. The second-largest bank in America just wrote one, and the Bank of America penalty, announced by the Treasury Department on Tuesday, is the third-largest in Treasury history.
Three federal agencies took part. Together they imposed more than $1.21 billion in penalties, according to a Treasury press release reported by PYMNTS. The charges involve anti-money-laundering failures and sanctions violations.
How the Bank of America Penalty Breaks Down
The biggest piece comes from FinCEN, the Treasury bureau that polices financial crime. Its fine is $1.2 billion. Only Binance ($3.4 billion, 2023) and TD Bank ($1.3 billion, 2024) drew bigger penalties, CNN reports.
The Office of the Comptroller of the Currency added a $750 million civil penalty, its largest ever. Before you start adding, though: regulators credit it against the FinCEN total, so it does not stack on top.
A third agency, OFAC, settled separately for $11.6 million. It cited 475 apparent sanctions violations, including Russia and Iran programs. Small by comparison, but it’s the piece that pushes the total past $1.21 billion.
What Regulators Say Went Wrong
Treasury says the bank failed to report more than $5 billion in suspicious transactions on time. More than $1 billion of that involved national security or priority risks. CNBC reports that the activity included Chinese money-laundering networks and activity tied to the southwest border.
The OCC went further. It found the bank’s transaction-monitoring system failed to properly watch trillions of dollars in transactions. It also found the bank knew for years that potentially suspicious activity never reached investigators, Fox Business reports. That finding is the heart of the Bank of America AML penalty.
Bank of America admitted it willfully violated the Bank Secrecy Act. The admission covers a noncompliant AML program, missing due diligence on foreign correspondent accounts, and unfiled suspicious activity reports.
Treasury Secretary Scott Bessent did not soften it. “When a bank of this size fails to meet its anti-money laundering and sanctions obligations, the consequences extend far beyond its own walls,” he said.
He added that the actions “send a clear message that even the biggest financial institutions are not above the law.”
The Treasury Fine on BofA Hits Earnings Day
The timing is awkward, to put it kindly. The bank said its third-quarter results include a non-tax-deductible $1.2 billion charge, which cuts net income by about 17 cents per share.
Bank of America reported those results Wednesday. Its investor relations page shows revenue of $30.0 billion, net income of $6.9 billion and $0.91 per diluted share. For a wider look at the quarter, see how Goldman and JPMorgan fared on earnings.
Wall Street was looking for about $1.10 per share and $30.69 billion in revenue, CNBC reports, citing LSEG. Shares slipped about 1% in premarket trading.
That is a shrug for a $1.2 billion hit. The bank announced the charge a day earlier, so investors had time to price it in.
Here’s the Thing: This Wasn’t a Surprise Attack
The OCC flagged significant deficiencies back in 2023. It issued a cease-and-desist order in December 2024 requiring the bank to strengthen its AML program. Regulators say the breakdowns continued. The bank says the BofA fine stems from violations cited in that 2024 consent order and in FinCEN’s investigation.
That is why this one stings. Regulators are saying they told the bank to fix its controls, and the problems were still there.
It is also part of a pattern. The action came less than a week after regulators fined American Express $350 million over similar AML failures, Axios reports. Regulators are putting big banks on notice.
For everyday customers, nothing changes at the teller window. For shareholders, the question is cost: the bank says remediation spending is already in its expense base.
Inflation data could matter just as much this week, since Wednesday’s CPI report is also in play. A bank spokesperson put it this way: “Financial crime compliance is serious, and we are responsible for getting it right.”
The check is written. Now management has to show regulators, and investors, that this time the fixes actually stick.
