BofA Anticipates Possible Federal "Enforcement Action" Over Money Laundering and Zelle Concerns

Investigation into Suspected Money Laundering at Major Banks

Just over two weeks after Toronto-Dominion Bank admitted guilt to several criminal charges and paid $3 billion in fines and other penalties to the Department of Justice and financial regulators for its failure to monitor the money laundering activities of fentanyl drug traffickers and other criminals, it appears the investigation into suspected money laundering at major banks has now extended to the US.

Bank of America's Disclosure

Bank of America disclosed in a filing on Tuesday that it is currently in discussions with several federal regulators. The discussions are regarding certain aspects of the corporation's Bank Secrecy Act/anti-money laundering and sanctions compliance programs. This includes transaction monitoring, training, governance, and customer due diligence. The corporation stated that it has been, and plans to continue, implementing enhancements to these programs. The corporation is continuing discussions with its regulators about the programs, and resolution of these discussions may include one or more public orders by the regulators.

CFPB Inquiry into Zelle Payment Network

Bank of America is also responding to an inquiry from the Consumer Financial Protection Bureau into electronic payments on the Zelle payment network. The CFPB staff has initiated discussions with the corporation to pursue a resolution of the inquiry or file an enforcement action. The bank is currently evaluating its next steps, which may include litigation.

TD Bank Case and Potential AML Issues

The filing did not provide specific details about potential AML issues. However, it is worth noting the TD Bank case, where the Canadian bank prioritized profits over AML compliance, enabling fentanyl and narcotics trafficking operations to utilize banking services.

AML Investigation Across North American Banks

The AML investigation across multiple North American banks is taking place ahead of a potential win for Trump in the White House. The former president stated on Tuesday that he would "seize assets" of drug cartels for their drug death catastrophe, which results in the death of 100,000 Americans per year. Essentially, Trump is indirectly suggesting that if he wins, the federal authorities will be disrupting the financial networks of drug cartels.

Expansion of AML Investigation

It is crucial to note that the AML investigation of major banks has broadened and could significantly expand in the coming months.

Bottom Line

The expansion of AML investigations into major banks, including Bank of America, marks a significant development in the financial sector's efforts to combat money laundering. This could have far-reaching implications for the banking industry and its regulatory landscape. What are your thoughts on this development? Do you think this will lead to more stringent regulations and enforcement actions in the future? Share this article with your friends and let us know your thoughts. Don't forget to sign up for the Daily Briefing, which is available every day at 6pm.