Bank of America Fined Over $1.2 Billion for Compliance Failures

The U.S. Treasury has levied a staggering fine of over $1.2 billion against Bank of America (BoA) for its failure to comply with anti-money laundering and sanctions regulations. This penalty marks the largest ever imposed by the Office of the Comptroller of the Currency (OCC) and ranks among the top three fines in the history of the Treasury Department.

From 2018 to 2025, the Treasury found that BoA willfully ignored critical requirements of the Bank Secrecy Act. The bank's anti-money laundering program was deemed inadequate, leading to significant delays in filing Suspicious Activity Reports (SARs). Regulators noted a concerning trend where the bank prioritized revenue over compliance, allowing suspicious transactions to go unexamined for extended periods.

As a result, BoA failed to report over $5 billion in transactions promptly, with more than $1 billion linked to heightened national-security risks, including activities associated with Chinese money-laundering networks and fraud schemes. The Treasury highlighted that the bank did not adequately flag suspicious activities, such as large wire transfers to China and unusual credit card transactions, which are indicative of potential money laundering.

This fine is part of a broader initiative by the U.S. Treasury to combat Chinese money-laundering networks, which have become a significant conduit for moving proceeds from Mexican drug cartels, particularly those trafficking fentanyl. These networks often involve a broker in the U.S. who receives cash from drug sales and coordinates with Chinese clients to transfer funds abroad, circumventing Beijing's capital controls.

Former Justice Department official Craig Timm has pointed out that these networks represent a primary method for laundering illicit funds globally. Secretary Scott Bessent remarked, "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 U.S. financial system to significant illicit finance risks."

Broader Trends in Financial Compliance Failures

BoA is not alone in facing scrutiny for compliance failures. In 2024, TD Bank's U.S. division agreed to pay over $3 billion in penalties for similar violations, including a conspiracy to commit money laundering. Prosecutors revealed that TD Bank facilitated the movement of hundreds of millions through Chinese networks, including a single group responsible for handling approximately $653 million in illicit proceeds.

The failures of both BoA and TD Bank to report suspicious transactions linked to Chinese money-laundering networks underscore the critical role that large financial institutions play in combating illicit activity. When such banks neglect to investigate or report significant volumes of suspicious transactions, they provide drug trafficking organizations with reliable channels for laundering money, thereby undermining the government's ability to utilize financial tools designed to isolate these networks.

In a troubling contrast, both banks have been found to restrict or terminate relationships with conservative organizations and lawful businesses based on political or religious views. For instance, TD Bank raised objections to a pandemic-relief loan for a nonprofit after it was labeled a "hate group" by the Southern Poverty Law Center, leading to the withdrawal of the application. Similarly, Bank of America severed ties with private-prison and detention-center clients during the Biden administration, citing reputational risks, only to seek re-engagement with similar clients shortly thereafter.

The Cover Story

Adding to the controversy, an FBI whistleblower alleged that after the events of January 6, 2021, Bank of America provided the bureau with a list of customers who had used its cards in the Washington, D.C., area, without any legal process. The bank defended its actions as consistent with its Bank Secrecy Act obligations.

This pattern of compliance misallocation raises significant concerns. Large banks appear to prioritize scrutiny of politically disfavored customers while allowing substantial volumes of transactions linked to illicit networks to go unreported. Such an approach not only represents a compliance failure but also misallocates resources, leaving the financial system vulnerable to economic and national security threats that ultimately affect everyone.