Bank of America, Corp. BAC received a cease-and-desist order on Monday from the Office of the Comptroller of the Currency (“OCC”), addressing the deficiencies under the Bank Secrecy Act (BSA) and sanctions compliance programs.

Details of the Order Against BAC

The BSA governs how financial firms must monitor transactions and be aware of their customers’ identities to prevent financial crimes. The act further requires that firms actively flag activities, such as wire transfers, if they seem suspicious or are part of an unfamiliar pattern of spending or fund transfer.

The recent order against Bank of America is based on violations, inappropriate and unsafe practices concerning these programs alongside a failure to timely report suspicious activity and rectify shortcomings related to its Customer Due Diligence processes identified earlier.

Further, the order also identified defects in BAC’s internal controls, governance, independent testing, and training components of the bank’s BSA compliance program.

The order mandates the bank to apply thorough remedial measures to improve its BSA/anti-money laundering (AML) and sanctions compliance programs. These include appointing an independent consultant to evaluate the effectiveness of these programs and conduct lookback reviews to ensure that all suspicious activities are adequately reported.

BAC neither admitted nor denied the charges and didn’t receive a monetary penalty. Further, the bank doesn’t expect these charges to have a material impact on its financials.

The bank stated “We have been working closely with the Office of the Comptroller of the Currency over the past year to make improvements to our anti-money laundering and sanctions programs. The work we’ve done so far positions us well to implement the requirements of the consent order.”

Other Regulatory Issues Faced by BAC

The U.S. Consumer Financial Protection Bureau (“CFPB”) filed a lawsuit on Friday against BAC and two other major banks, JPMorgan JPM and Wells Fargo & Co. WFC, for failing to protect consumers from widespread fraud on Zelle, the renowned payments network. The lawsuit also targeted Early Warning Services LLC, Zelle’s official operator.

The lawsuit alleges that the customers of JPM, WFC, and BAC have lost more than $870 million due to such ongoing failures since Zelle’s launch.

Further, this July, UBS Group AG UBS sued Bank of America for $200 million. The lawsuit, filed in a New York state court in Manhattan, alleged that the latter refused to cover the legal costs associated with risky mortgages issued before the 2008 financial crisis, per the Reuters report.

UBS stated that despite extended communications with Bank of America regarding indemnification, which includes roughly $53 million of legal costs, BAC refused to comply with its indemnification obligations.

BAC’s Zacks Rank & Price Performance

Over the past six months, shares of BAC have gained 11.5% compared with the industry’s growth of 19.5%.

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Currently, Bank of America carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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