US authorities have fined Bank of America (BoA) $1.2bn for failing to prevent and report national security risks including Chinese money laundering.
The US Department of the Treasury’s financial crimes enforcement network (FinCEN) said the fine related to the bank’s failure to identify and report suspicious transactions.
The punishment includes a $750m fine from the Office of the Comptroller of the Currency (OCC), related to deficient and ineffective anti-money laundering compliance.
FinCEN said: “… Bank of America admits that it wilfully violated the Bank Secrecy Act (BSA) and failed to implement and maintain an anti-money laundering (AML) programme that met the minimum requirements.”
The US Department of the Treasury said: “The central failures identified through FinCEN’s investigation involved deficiencies related to Bank of America’s suspicious transaction identification and reporting and customer due diligence processes. As these issues arose, Bank of America prioritised its revenues and minimised the impact on its required compliance resources.”
Scott Bessent, secretary at the US Department of the Treasury, said: “Financial institutions are on the front lines of protecting our economic and national security. 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 US financial system to significant illicit finance risks.”
The OCC said Bank of America is the second-largest bank in the US and the sixth-largest in the world, processing hundreds of trillions of dollars in transactions across the globe.
“It has a high, and increasing, risk profile for money laundering, terrorist financing and other illicit activities,” said comptroller of the currency Jonathan Gould. “Almost two years ago, the bank signed an order with the OCC and committed to fixing its longstanding BSA deficiencies.
“Despite its obligation to the American people as a national-chartered, global systemically important bank, the bank’s BSA/AML compliance programme continues to reflect widespread breakdowns in internal controls, which threatens US national and economic security.
“The OCC expects all banks to have an effective BSA/AML compliance programme,” he said. “Those that do not can expect swift and significant action from the OCC.”
Over in Europe
There could be trouble ahead for banks in Europe in relation to AML regulations.
In May this year, a survey carried out by PwC Luxembourg found that incomplete guidance and data quality challenges are making it difficult for financial services firms to meet the rules of the EU’s AML Package regulations.
PwC found that only a third of the 500 firms questioned across 40 EMEA countries will be ready for the July 2027 AML regulation deadline.
PwC found that companies are struggling because full guidelines on the regulations, known as regulatory technical standards, are not yet available and, from a technological point of view, they are finding it difficult to provide the data demanded by regulators.
Data quality continues to be the most important barrier to advanced technology and artificial intelligence (AI) adoption, according to 89% of electronic and virtual payments firms, 64% of banks and insurance companies, and 52% of asset and wealth management (AWM) companies in the EMEA region.
The PwC figures revealed that 30% of banks believe they will need a significant change in their overall data structure to meet regulations, with 46% of AWM firms facing the same challenges, along with 39% of insurers and 43% of e-payment service providers.
