Bank of America Slapped with $1.2 Billion Fine Over Chinese Money Laundering Failures

Bank of America Fined $1.2 Billion for Compliance Failures

Bank of America has been fined a total of $1.2 billion dollars by the Office of the Comptroller of the Currency (OCC) and the Financial Crimes Enforcement Network (FinCEN) after admitting failures of its Bank Secrecy Act (BSA) and anti-money laundering (AML) compliance program.

Background of the Fine

The OCC is responsible for the $750 million fine, which is the largest civil money penalty that the bureau has ever issued. FinCEN is responsible for the remainder of the fine and credits the $750 million against its total penalty of $1.2 billion.

OCC Fine Details

Bank of America willfully failed to implement and maintain adequate internal controls for BSA compliance, resulting in missing or delayed reports for over $5 billion of suspicious activity, including national security-related and other priority illicit finance risks.

Chinese Money Laundering Network Activity

FinCEN found that the bank's due diligence on correspondent accounts held by its own foreign branches and affiliates fell short.

Regulatory Questionnaires

Some regulatory questionnaires were completed by the bank on behalf of all its foreign branches and affiliates, and others were completed for specific foreign branches and affiliates.

Bank of America stock fell from around $62.69 in mid-September to under $50 on October 14.

Conclusion

The fine follows the bank's recent $350 million fine levied against American Express. The OCC and FinCEN have highlighted the importance of effective compliance programs in preventing illicit finance risks.