The U.S. Treasury Department said Tuesday that it is imposing $1.21 billion in penalties against Bank of America, the country's second-largest lender, for violating laws designed to prevent financial crimes.
Bank of America "admits that it willfully violated" the Bank Secrecy Act, Treasury said, referencing the law meant to prevent money laundering and other types of crimes from flowing through the financial system.
Regulators announced the penalties just ahead of the bank's scheduled third-quarter earnings report release on Wednesday. The fines will likely shape analysts' questions of Chief Executive Officer Brian Moynihan on a conference call to discuss the results.
The enforcement actions will "likely deepen already bearish sentiment," UBS Securities analyst Erika Najarian told clients on Tuesday.
The fines represent the largest-ever penalty brought by the Treasury Department's Office of the Comptroller of the Currency, which regulates banks, and the third-largest penalty in Treasury's history.
The bank's program focused on combating money laundering "is deficient and ineffective," Treasury said. Regulators previously ordered the bank to fix that system in 2024, citing breakdowns in its processes to pinpoint and flag financial activity that appeared suspicious.
But the firm allowed suspicious activity to pile up without proper investigations, Treasury said. Filing suspicious activity reports, known in banking as SARs, is a cornerstone of efforts to fight money laundering.
A Bank of America spokesperson said in a statement that the bank has "already dedicated substantial personnel and resources to our ongoing remediation efforts, and those costs are in the current expense base."
Bank of America's shares fell 2.4% in after-hours trading. The bank's third-quarter results will now include a non-tax-deductible charge of $1.2 billion, the spokesperson said. That impact net income by some 17 cents per share, according to the spokesperson.
"We will continue to support federal and local law enforcement across thousands of investigations and report hundreds of thousands of suspicious activity reports each year," the spokesperson added.
The penalties are notable for their sheer size. In its history, only Treasury's fines against Toronto-Dominion Bank and the crypto exchange Binance, both brought in recent years, were larger.
The fines are also notable for the bank, led by Chief Executive Officer Brian Moynihan. Bank of America's net income last quarter was $9.1 billion, and the bank drove overall profits of $30.5 billion in 2025.
Treasury said Bank of America failed to report more than $5 billion in suspicious activity to the Financial Crimes Enforcement Network, which focuses on safeguarding financial firms from illegal activity.
"Today's actions send a clear message that even the biggest financial institution are not above the law," Treasury Secretary Scott Bessent said in a statement.