Editor’s note: This is a developing story and will be updated.

Bank of America must pay more than $1.21 billion in penalties for violating anti-money laundering and sanctions laws, the Treasury Department announced Tuesday.

Within that amount, a $1.2 billion fine levied by the Financial Crimes Enforcement Network is the third largest in Treasury history. The Office of the Comptroller of the Currency concurrently assessed a $750 million civil monetary penalty — the largest in its 163-year history — over a “deficient and ineffective” compliance program.

The Office of Foreign Assets Control also announced an $11.6 million settlement agreement with Bank of America over sanctions violations tied to Iran, Russia, global terrorism and narcotics.

The Treasury credited the OCC’s penalty toward its $1.2 billion fine. No asset cap was imposed.

Bank of America admitted to willful violations of the Bank Secrecy Act, FinCEN said. The bank admits that it failed to implement and maintain an AML program that satisfied the BSA and FinCEN’s implementing regulations, and that it failed to conduct due diligence for correspondent accounts for foreign financial institutions.

The bank also failed to file suspicious activity reports to the tune of $5 billion, FinCEN found.

According to the OCC, Bank of America failed to properly monitor trillions of dollars in transactions, and the bank “knew for years that it was failing to escalate potentially suspicious activities to investigators for review.” Additionally, the bank’s BSA officer and staff “lacked sufficient skills and expertise” to effectively manage the bank’s BSA/AML program.

“Financial institutions are on the front lines of protecting our economic and national security,” Treasury Secretary Scott Bessent said in a prepared statement. “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.”

In 2024, Bank of America agreed to a cease-and-desist order related to BSA/AML deficiencies. But the lender failed to complete steps needed to establish an effective BSA/AML compliance program after the order, and its program continues to have significant issues, according to the OCC.

More than a year after the 2024 order, Bank of America didn’t escalate potentially suspicious activity for review, and it processed potential trade-based money laundering transactions due to a flaw in its transaction monitoring program, the OCC said.

“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 program continues to reflect widespread breakdowns in internal controls, which threatens U.S. national and economic security,” Comptroller of the Currency Jonathan Gould said in a statement.

“The bank’s poor response to its BSA deficiencies is unacceptable,” Gould said. “The second largest bank’s egregious and continued BSA violations warrant the OCC imposing its largest (civil money penalty) ever assessed against a bank. The OCC expects all banks to have an effective BSA/AML compliance program. Those that do not can expect swift and significant action from the OCC.”

A Bank of America spokesperson Tuesday cited billions of dollars the company has invested in technology and personnel to thwart financial crime. “Financial crime compliance is serious, and we are responsible for getting it right,” the spokesperson said in an email to Banking Dive.

“[O]ur team is far along with and committed to completing the work required to address the issues raised by our regulators,” the spokesperson said.

Bank of America’s third-quarter results, set to be reported Wednesday, will include a non-tax-deductible charge of $1.2 billion, the spokesperson said, impacting net income by approximately 17 cents per share.