Bank of America (BAC) has entered into a consent order with the Office of the Comptroller of the Currency (OCC) for deficiencies in its anti-money laundering (AML) and compliance programs. The order follows a probe that revealed failures in the bank’s ability to identify and report suspicious activity.
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It must be mentioned that the OCC found that Bank of America failed to adequately develop and maintain a program to comply with the Bank Secrecy Act, which requires financial institutions to track transactions and report suspicious activity.
To address these issues, BofA is required to hire an independent consultant to assess its programs and conduct a thorough review of all its past activities.
Major Banks Remain Under Regulatory Fire
This action comes amid increased scrutiny of large banks’ compliance with AML regulations. In recent months, other major banks, including Wells Fargo (WFC) and TD Bank (TD), have faced similar regulatory actions for deficiencies in their programs.
Also, investors should note that Bank of America, along with Wells Fargo and JPMorgan (JPM), are currently facing a lawsuit filed by the Consumer Financial Protection Bureau (CFPB) for allegedly allowing fraud on their peer-to-peer payment platforms.
These regulatory actions reflect the growing scrutiny against financial institutions to ensure compliance with laws. As a result, banks are investing heavily in compliance and risk management to avoid significant penalties.
Is BAC a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on BAC stock based on 14 Buys and two Holds assigned in the past three months. At $51.43, the average Bank of America price target implies a 17.18% upside potential. Shares of the company have gained 33.69% year-to-date.
