Bank of America is paying more than $1.21 billion to settle money laundering and sanctions violations with three arms of the US Treasury. Trade based money laundering and correspondent banking failures sit right at the centre of the case.
Treasury announced the actions on 13 October and called them the third largest penalty in its history. For the Office of the Comptroller of the Currency, it’s an outright record. FinCEN assessed $1.2 billion, which credits a $750 million civil money penalty from the OCC. OFAC reached its own $11.6 million settlement on top.
According to Treasury, the bank failed to report more than $5 billion in suspicious transactions to FinCEN on time. Over $1 billion of that touched national security and other priority risks: Chinese money laundering networks, fraud, and potential trade based money laundering with a substantial link to the US southwest border.
The admission is the striking part. As part of its resolution with FinCEN, Bank of America admitted it wilfully violated the Bank Secrecy Act. Treasury said the bank failed to run an anti money laundering programme that met the law’s minimum requirements. It also failed to carry out due diligence on correspondent accounts for foreign financial institutions, and failed to file suspicious activity reports.
The OCC found the bank’s programme deficient and ineffective. It said a systemic gap in transaction monitoring meant the bank processed potential trade based money laundering transactions. The bank has been under an OCC cease and desist order since December 2024, and Treasury said that more than a year later it was still failing to escalate potentially suspicious activity to investigators.
OFAC’s settlement covers 475 apparent violations. Technical and human error sent correspondent banking payments through blocked banks. Poor alert calibration let designated individuals make payments and withdraw funds. Watchlists weren’t updated promptly after new designations, and business accounts linked to blocked persons were mishandled. The result, OFAC said, was millions of dollars in payments in apparent violation of programmes covering Russia, Belarus, Iran, Burma, Somalia, narcotics and global terrorism.
OFAC judged the violations non-egregious but largely not voluntarily self-disclosed, and gave no reduction from the base penalty for remediation or cooperation. The bank has committed to changes in training, testing and audit.
“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,” said Treasury Secretary Scott Bessent.
Comptroller of the Currency Jonathan Gould was just as blunt: “The second largest bank’s egregious and continued BSA violations warrant the OCC imposing its largest CMP ever assessed against a bank.”
Bank of America said in a statement: “We worked with regulators to reach these penalty resolutions stemming from violations cited in the previously reported 2024 OCC Consent Order and FinCEN’s investigation.”
Digital Trade Outlook’s View: Trade Finance Is Now in the Enforcement Crosshairs
The detail that matters sits in FinCEN’s findings: Bank of America admitted it failed to carry out due diligence on correspondent accounts for foreign financial institutions. Add trade based money laundering and payments routed through blocked banks, and this case is about trade finance plumbing, not retail fraud. The message to every transaction bank is blunt. A misfiring sanctions filter, a watchlist updated days late, a monitoring model blind to trade flows: each is now a nine figure liability. Compliance budgets will shift to documentary trade screening and correspondent controls, and clients will carry the cost. Exporters in high risk corridors should expect slower onboarding, harder questions and fewer banks willing to say yes.
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