WASHINGTON, D.C. — Bank of America has been hit with more than $1.21 billion in federal penalties after investigators uncovered sweeping failures in the banking giant’s anti-money laundering operations, including more than $5 billion in suspicious transactions that were not reported to authorities on time.
The U.S. Department of the Treasury announced the enforcement actions Tuesday, October 13, 2026, accusing the nation’s second-largest bank of maintaining ineffective financial crime safeguards despite years of warnings and previous regulatory intervention.
The penalties include the third-largest in Treasury Department history and the largest civil money penalty ever assessed by the Office of the Comptroller of the Currency.
Federal investigators determined that Bank of America knew its systems were failing to identify suspicious financial activity but did not adequately address the problems. As part of its resolution with the Financial Crimes Enforcement Network, or FinCEN, the bank admitted willful violations of the Bank Secrecy Act.
Billions in suspicious transactions escaped timely reporting
Federal investigators determined that Bank of America failed to report more than $5 billion in suspicious financial activity on time. More than $1 billion of that activity involved national security concerns and other high-priority illicit finance risks.
Authorities identified potentially suspicious activity indicative of Chinese money laundering networks, fraud and trade-based money laundering with a substantial connection to the southwestern United States border.
Federal law requires banks to monitor transactions, investigate warning signs and file suspicious activity reports when warranted. Treasury officials said Bank of America’s monitoring systems were inadequate, leaving large volumes of questionable activity unexamined for extended periods.
Instead of relying on effective internal controls, the bank frequently depended on law enforcement inquiries and referrals from other financial institutions to identify activity that its systems should have flagged.
Investigators also found that staff raised concerns about possible proceeds from narcotics trafficking without timely and adequate corrective action by the bank.
Regulators say bank put revenue ahead of compliance
Treasury found that Bank of America prioritized revenue while minimizing resources needed for its financial crime compliance obligations, even after testing highlighted significant weaknesses.
The Office of the Comptroller of the Currency concluded that the bank’s anti-money laundering program was deficient and ineffective. Its monitoring deficiencies affected trillions of dollars in transactions and led to numerous late suspicious activity reports involving billions of dollars.
Regulators found shortcomings in staff training, compliance expertise, due diligence and internal audits. Bank personnel responsible for spotting suspicious transactions lacked sufficient training and expertise, according to federal findings.
Previous order failed to correct problems
The OCC had already issued a cease-and-desist order in December 2024 requiring Bank of America to correct substantial weaknesses in its anti-money laundering program.
More than a year after that order, regulators said the bank continued failing to properly escalate potentially suspicious activity for investigation. They also identified monitoring gaps involving possible trade-based money laundering transactions.
The OCC assessed a $750 million civil money penalty for these compliance failures.
Sanctions violations involved Russia, Iran and terrorism restrictions
The Treasury Department’s Office of Foreign Assets Control separately announced an $11.6 million settlement involving 475 apparent violations of federal sanctions programs.
Regulators said Bank of America processed millions of dollars in payments that apparently violated sanctions involving Russia, Belarus, Iran, Burma, Somalia, narcotics and global terrorism.
The apparent violations resulted from technical and human errors, improperly calibrated sanctions screening alerts, delayed updates to sanctions watchlists and mishandling of certain blocked accounts.
OFAC classified the violations as non-egregious and said they were largely not voluntarily disclosed by the bank.
How the $1.21 billion penalty breaks down
FinCEN assessed a $1.2 billion civil penalty, while the OCC imposed a $750 million penalty credited toward the FinCEN amount. The two figures are therefore not added together as separate charges.
Together with the separate $11.6 million sanctions settlement, the announced penalties total more than $1.21 billion.
Treasury demands independent review and corrective action
Bank of America must work with an independent third party to examine transactions that previously escaped detection and identify suspicious activity requiring reports to FinCEN.
Independent reviews will also evaluate transaction monitoring, customer due diligence, foreign correspondent banking controls and the management of information used in anti-money laundering compliance. Regulators will focus in particular on risks involving the U.S. southwest border, drug cartels, Iran and Russia.
“When a bank of this size fails to meet its anti-money laundering and sanctions obligations, the consequences extend far beyond its own walls,” Treasury Secretary Scott Bessent said.
What the enforcement action means for Americans
The case highlights the obligations financial institutions have to identify suspicious activity and comply with federal anti-money laundering and sanctions rules.
The enforcement findings do not establish that every suspicious transaction identified by regulators was criminal. Suspicious activity reports are alerts for potential scrutiny and do not, by themselves, prove wrongdoing by the bank’s customers.
The action also does not indicate that ordinary Bank of America depositors were accused of wrongdoing.
The U.S. Department of the Treasury announced the enforcement package on October 13, 2026.