Bank of America has been fined $1.21 billion by U.S regulators for widespread failures to detect ‌potential money laundering and other illicit activity.

The treasury department, in a statement on Tuesday, said the fine, the third-largest in department history, was as a result of the bank’s failures to report more than $5 billion in suspicious activity to the government, including $1 billion posing national security-related and other priority illicit finance risks.

“Financial institutions are on the ​front lines of protecting our economic and national security,” the treasury secretary, Scott Bessent, stated.

Mr Bessent noted that when a bank of such size ​failed to meet its anti-money laundering and sanctions obligations, the consequences extended far beyond its own walls, exposing the ⁠entire U.S. financial system to significant illicit finance risks.

It added, “Even the biggest financial institutions are not above the law.”

The $1.2 billion fine included penalties imposed by the Office of the Comptroller of the Currency and the Office of Foreign Assets Control, with the OCC’s $750 million fine being the biggest penalty it ever levied.

Noting that the bank prioritised its revenues in building compliance programmes, the treasury department said the financial institution overly relied on inquiries ​from outside parties such as law enforcement and other financial institutions instead of its own internal controls.

It explained some transactions remained uninvestigated by the bank for extended periods, while internal concerns about possible proceeds from the illegal drugs trade failed to deliver an adequate response.

According to the statement, the consent order requires the bank to hire an ​independent third party to review its past transactions, spot suspicious activity that the bank failed to detect at the time and report those transactions to the Financial Crimes Enforcement Network (FinCen).

It noted that yhe review would pay particular attention to risks involving Mexican cartels, narcotics trafficking, Iran and Russia

Reacting to the development, spokesperson for the bank acknowledged that financial crime compliance was serious, noting that “the financial institution is responsible for getting it right.”

“We have invested billions of dollars in technology and dedicated thousands of ​employees to combat financial crime, and our team is far along with and committed to completing the work required to address the issues raised ​by our regulators,” the statement said.

The development came days after American Express was also fined $350 million for similar anti-money ​laundering failures.