Sen. Elizabeth Warren (D-Mass.) slammed the Trump administration’s $1.2 billion penalty against Bank of America Corp. (NYSE:BAC) as a “slap-on-the-wrist,” arguing that the punishment barely dents the lender’s $30 billion annual profit despite years of anti-money laundering deficiencies
Warren Demands Tougher Penalties And Criminal Investigation
“The Biden Administration failed to hold Bank of America accountable in 2024, and now, the Trump Administration is letting Bank of America off the hook,” Warren said in a statement on Wednesday.
Warren, the Senate Banking Committee’s top Democrat, accused Bank of America of failing to maintain effective anti-money laundering safeguards for years despite federal warnings. She noted that the Office of the Comptroller of the Currency (OCC) had already identified deficiencies in the bank’s compliance program in 2024, raising questions about why regulators did not impose stronger penalties earlier.
“Real accountability would mean imposing an asset cap and restrictions on shareholder dividends and stock buybacks and conducting a criminal investigation,” Warren said, also demanding that CEO Brian Moynihan testify before Congress.
She argued that large banks “should be subject to structural punishments” and executives “should be held personally accountable when they break the law.”
Treasury Flags Money Laundering And Sanctions Violations
The Treasury Department’s enforcement action followed findings that Bank of America failed to adequately report suspicious transactions involving Chinese money laundering networks and southwest border cartels.
Regulators identified more than $5 billion in suspicious transactions and announced more than $1.21 billion in penalties, including a $1.2 billion FinCEN penalty and a separate $11.6 million sanctions settlement. The OCC’s $750 million penalty is credited against the FinCEN penalty rather than added on top of it.
Treasury Secretary Scott Bessent defended the punishment in a press release on Tuesday, the department’s third-largest, saying it demonstrated that “even the biggest financial institutions are not above the law.”
The OCC’s $750 million assessment received credit against the $1.2 billion FinCEN penalty, rather than adding another $750 million to the total.
Bank Of America Earnings Fall After Fine
Bank of America said it worked with regulators to resolve the violations and continued investing in compliance improvements, including technology and personnel to strengthen transaction monitoring.
The penalty weighed on third-quarter earnings, with net income falling to $6.9 billion from $8.3 billion a year earlier. Revenue nevertheless rose 3% to approximately $30 billion. Trading revenue fell 5%, while investment banking fees declined 11%, adding to pressure on the lender’s quarterly performance.
The results triggered a sharp selloff in Bank of America shares, although the stock subsequently recovered some ground.
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