Bank of America hit with $1.2 billion fine for overlooking Chinese money‑laundering and narco‑trafficking

Bank of America was fined $1.2 billion by the U.S. Treasury Department on Oct. 14, 2026 for failing to timely report more than $5 billion in suspicious activity tied to Chinese money‑laundering networks and narcotics trafficking along the southwest border.

The penalty, the third‑largest ever imposed by Treasury and the largest civil fine ever levied by the Office of the Comptroller of the Currency, highlights growing regulatory pressure on major U.S. banks to shore up anti‑money‑laundering (AML) controls.

“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,” Treasury Secretary Scott Bessent said.

The enforcement action breaks down into a $750 million civil penalty to the OCC, an $11.6 million settlement with the Office of Foreign Assets Control for alleged sanctions breaches, and the bulk $1.2 billion assessed by the Financial Crimes Enforcement Network (FinCEN). The Treasury noted that more than $1 billion of the unreported activity involved “priority” national‑security risks, including the Chinese money‑laundering networks and illicit finance at the border.

Bank of America admitted it willfully violated the 1970 Bank Secrecy Act, which requires banks to maintain safeguards against money laundering and to file suspicious activity reports promptly. Regulators said the bank “prioritized its revenues” and relied heavily on law‑enforcement inquiries, effectively outsourcing core detection duties.

The fine will cut the bank’s third‑quarter net income by about 17 cents per share, bringing adjusted earnings to $1.08 per share, still shy of analysts’ $1.10 forecast. Shares fell roughly 5.9% after the announcement and slid further in after‑hours trading.

Going forward, Bank of America must work with an independent third party to review and remediate its AML program, and it will face ongoing scrutiny as it reports Q3 results next week.