Bank of America has disclosed that it could be required to pay monetary penalties as part of a potential resolution with regulators concerning deficiencies in its anti-money-laundering (AML) compliance program. The updated disclosure, made in a recent securities filing, also noted that the bank could face additional remedial actions as discussions with regulators continue.

The announcement represents a notable change from the bank’s earlier position. In February, Bank of America indicated that it did not expect the compliance issues identified by regulators to have a material adverse financial impact on the institution. The latest filing signals that management now recognizes the possibility of financial penalties as part of a negotiated settlement.

Regulatory Action May Be Moving Toward Resolution

According to market analysts, the revised disclosure could indicate that Bank of America is progressing toward resolving the matter with the Office of the Comptroller of the Currency (OCC).

The OCC issued a cease-and-desist order against the bank in December 2024, alleging violations of the Bank Secrecy Act. Regulators cited deficiencies including inadequate internal controls, governance weaknesses, insufficient independent testing, and systemic shortcomings in transaction monitoring and suspicious activity reporting.

Since first disclosing the regulatory discussions in 2023, Bank of America has stated that it has been working to strengthen its AML and sanctions compliance framework.

Merrill Lynch Fine Adds to Compliance Challenges

Bank of America’s compliance scrutiny extends beyond its retail banking operations.

Earlier this year, the Securities and Exchange Commission imposed a $7.5 million civil penalty on Merrill Lynch, Bank of America’s brokerage subsidiary, for alleged failures involving suspicious activity reporting. Merrill neither admitted nor denied the findings as part of the settlement.

The development underscores the growing expectation that large financial institutions maintain consistent compliance standards across all business units.

Industry-Wide AML Enforcement Continues

Bank of America’s situation reflects a broader regulatory focus on financial crime compliance across the banking sector.

Recent years have seen several major institutions face heightened regulatory scrutiny over AML controls. Wells Fargo has been ordered to strengthen its suspicious activity monitoring, while TD Bank received one of the largest AML-related enforcement actions in recent history, including multi-billion-dollar penalties and an asset cap tied to improvements in its compliance program.

Although regulatory enforcement activity has evolved under the current administration, AML compliance remains one of the banking industry’s highest supervisory priorities.

Outlook

Bank of America’s updated disclosure suggests that negotiations with regulators may be entering their final stages. While the size of any potential monetary penalty remains unknown, investors will likely monitor future filings for clarity regarding the financial impact and timing of any settlement.

Beyond its implications for Bank of America, the development serves as a reminder that investments in governance, transaction monitoring, sanctions screening, and AML controls remain essential across the global banking industry as regulators continue emphasizing financial crime prevention.

Closing Insights

Bank of America’s evolving regulatory disclosure highlights how compliance has become a strategic issue alongside financial performance. As regulatory expectations continue to rise worldwide, banks that invest proactively in governance, technology, transaction monitoring, and financial crime prevention are likely to be better positioned to manage risk, maintain investor confidence, and navigate an increasingly demanding regulatory environment.