Bank of America Corp. said U.S. regulators may take action against the firm over its efforts to detect suspected money laundering and sanctions violations, as well as its handling of payments on the Zelle network.
Regulators may issue public orders after examining the firm's compliance programs "including transaction monitoring, training, governance and customer due diligence," the bank said in a regulatory filing Tuesday.
The company said it's cooperating and already working to improve those systems.
The Charlotte, North Carolina-based firm said it's also responding to an inquiry from the Consumer Financial Protection Bureau into electronic payments on the Zelle network.
The consumer watchdog is in talks to resolve the case or may bring an enforcement action. Bank of America said it's evaluating next steps, including the possibility of litigation.
Bank of America's stock fell more than 2% on Wednesday before paring some of those losses to trade down 0.4% to $42.36 at 9:42 a.m. in New York.
"Until regulators file formal actions, this issue will remain an overhang and likely to add a little pressure to the stock," JPMorgan Chase & Co. analyst Vivek Juneja said in a note following Bank of America's disclosure. As a result, JPMorgan removed the stock from its analyst focus list, it said.
U.S. authorities have repeatedly expressed dissatisfaction with international banks' programs for detecting, thwarting and reporting illicit cashflows tied to criminal networks and rogue governments.