Bank of America has been fined more than $1.2 billion by US regulators for failing to report billions of dollars in suspicious transactions and breaching anti-money laundering and sanctions requirements, the US Treasury Department announced on Tuesday.

The Treasury’s Financial Crimes Enforcement Network (FinCEN) assessed a $1.2 billion penalty after finding that the bank had failed to report more than $5 billion in suspicious activity, including more than $1 billion linked to national security and other high-priority illicit finance risks. The enforcement action is the third-largest penalty in the department’s history.

According to the Treasury, the failures included potential links to Chinese money laundering networks and suspected trade-based laundering connected to the US southwest border. The department said the bank relied heavily on law enforcement inquiries and referrals from other financial institutions rather than adequately using its own systems to identify suspicious activity.

As part of the settlement, Bank of America admitted it had wilfully violated the Bank Secrecy Act by failing to maintain a compliant anti-money laundering programme, conduct required due diligence on foreign correspondent accounts and file suspicious activity reports, the Treasury said.

The Office of the Comptroller of the Currency (OCC) separately announced a $750 million civil money penalty, the largest in the regulator’s history. That amount is credited against FinCEN’s $1.2 billion penalty, rather than being added to it. The Office of Foreign Assets Control (OFAC) reached a separate $11.6 million settlement covering 475 apparent sanctions violations involving programmes targeting Russia, Iran, narcotics and global terrorism, bringing the combined penalties to approximately $1.21 billion.

OFAC said the violations were classified as non-egregious when determining the settlement amount. The agreement includes compliance commitments covering training, testing, audits and future cooperation with the agency.

US Treasury Secretary Scott Bessent said the failures had consequences beyond the bank itself. “Today’s actions send a clear message that even the biggest financial institutions are not above the law,” he said.

Bank of America said it had invested billions of dollars in technology and dedicated thousands of employees to tackling financial crime. The bank said it was committed to completing the work required to address the issues identified by regulators.

The penalties came less than a day before the bank was scheduled to publish its third-quarter results on Wednesday. Bank of America said the $1.2 billion charge would be non-tax-deductible and reduce net income by approximately 17 cents per share.

The bank said the costs of its remediation efforts were already reflected in its existing expenses. The action follows deficiencies identified in a 2024 OCC consent order, which required the bank to address problems with its anti-money laundering controls.

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