Treasury Hits Bank of America With $1.2 Billion in AML and Sanctions Penalties, Including Record $750 Million OCC Fine

The U.S. Treasury Department imposed more than $1.2 billion in penalties on Bank of America on Tuesday, Oct. 13, 2026, after regulators said the nation's second-largest bank failed for years to report more than $5 billion in suspicious transactions and fix longstanding anti-money-laundering problems, according to CNBC. Treasury called it the third-largest action in the department's history.

The penalties land less than a day before Bank of America reports third-quarter 2026 earnings, scheduled for release around 6:45 a.m. ET Wednesday, Oct. 14, followed by an 8:30 a.m. ET investor call, per the bank's own investor relations announcement.

How the $1.2 Billion Breaks Down

Treasury's Financial Crimes Enforcement Network (FinCEN) assessed the $1.2 billion penalty for Bank of America's "failure to mitigate and report priority national security risks, including Chinese Money Laundering Networks and illicit finance along the southwest border," according to a Treasury statement cited by the Twin Cities Pioneer Press. The Office of the Comptroller of the Currency said the FinCEN fine credits the OCC's separate $750 million civil money penalty, which the agency described as the largest in its history and which will be paid to the U.S. Treasury. The OCC cited violations of the Bank Secrecy Act and its implementing regulations, including 12 CFR 21.21 and 12 CFR 21.11.

Separately, Bank of America reached an $11.6 million settlement with Treasury's Office of Foreign Assets Control covering potential civil liability for 475 apparent violations of multiple sanctions programs, including those targeting Russia, Belarus, Iran, Burma, Somalia, narcotics and global terrorism, Treasury said, as reported by NBC News and the Twin Cities Pioneer Press.

Treasury said the bank failed to timely report more than $5 billion in suspicious transactions, with over $1 billion of that activity implicating national security-related and other priority illicit finance risks, including transactions indicative of Chinese Money Laundering Networks, fraud and potential trade-based money laundering with a substantial nexus to the southwest border. As part of the settlement, Bank of America admitted that it willfully violated the Bank Secrecy Act by failing to maintain a compliant anti-money-laundering program, conduct required due diligence on foreign correspondent accounts and file suspicious activity reports, according to Treasury. Treasury also said the bank "prioritized its revenues" while minimizing the impact on compliance resources and leaned so heavily on law-enforcement inquiries and referrals from other financial institutions that it effectively outsourced part of its responsibility for detecting suspicious activity, CNBC reported.

The OCC said the penalties stem from conduct cited in a December 2024 cease-and-desist order and that more than a year after that order the bank still failed to escalate potentially suspicious activities to investigators and processed potential trade-based money laundering transactions because of a systemic gap in its transaction monitoring program. The regulator said the deficient monitoring system left trillions of dollars in transactions improperly monitored, resulting in large numbers of late suspicious activity reports involving billions of dollars, many with indicia of money laundering, and that the bank's BSA Officer and staff lacked sufficient skills and expertise. "The bank's poor response to its BSA deficiencies is unacceptable," Comptroller of the Currency Jonathan V. Gould said in the OCC release. "The second largest bank's egregious and continued BSA violations warrant the OCC imposing its largest CMP ever assessed against a bank."

Beyond the monetary penalty, Treasury said the bank will be required to conduct a third-party review for suspicious transactions that went undetected and to undergo independent reviews of its transaction-monitoring and customer due-diligence programs, CNBC reported. Treasury Secretary Scott Bessent said in a statement that "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," adding that "today's actions send a clear message that even the biggest financial institutions are not above the law."

Bank of America said the penalties will produce a $1.2 billion non-tax-deductible charge in its third-quarter results, reducing net income by approximately 17 cents per share, and that remediation costs are already reflected in its current expense base, according to CNBC and CNN. "Financial crime compliance is serious, and we are responsible for getting it right," spokesperson Christa Robinson said, adding that the bank has invested billions of dollars in technology, dedicated thousands of employees to combating financial crime and is "far along" in completing the work required to address the issues raised by regulators. CNBC reported the stock was down about 2% in after-hours trading on the news, while CNN reported a decline of more than 2.5%.

Bottom Line

The disclosed figures are specific and already quantified for shareholders: a $1.2 billion non-tax-deductible charge equal to roughly 17 cents per share lands in third-quarter results due before Wednesday's open, with the OCC's record $750 million penalty credited inside the FinCEN total rather than added on top. One interpretation, tied to the regulators' own statements, is that the cost of the remediation timeline matters as much as the fine itself: the OCC said breakdowns persisted more than a year after its December 2024 order, and former Treasury deputy assistant secretary Aaron Klein told CNN that regulators "have a lot of penalties they could impose beyond money." CNN also reported that, unlike the larger Binance and TD Bank cases, no Justice Department action accompanied this one. Investors will be watching Wednesday's 8:30 a.m. ET call for detail on the independent reviews and the third-party lookback Treasury is requiring.