Bank of America’s Penalty Is a Warning for Guyana’s Banks

OPINION BY: Hem Kumar October 2026

US authorities said Bank of America failed to maintain an effective anti-money-laundering program, conduct required due diligence on foreign correspondent accounts, and file suspicious-activity reports. FinCEN’s US$1.2 billion penalty was linked to the bank’s failure to report more than US$5 billion in suspicious transactions in a timely manner; the OCC imposed a US$750 million civil penalty, credited toward the FinCEN amount, while OFAC separately settled alleged sanctions breaches for US$11.6 million.

The lesson is not that banks should ease up on anti-money-laundering rules. Guyana, especially amid an oil-driven economy, expanding construction, gold trading, real-estate transactions, public procurement and increasingly complex cross-border payments, needs institutions that can detect corruption, fraud, sanctions evasion, illicit enrichment and money laundering.

But the Bank of America matter exposes the danger of compliance theatre: an institution may appear strict at the customer counter while failing where the greatest risks actually reside.

The wrong target

Too often, Guyanese customers experience a version of compliance that is heavy on inconvenience and light on explanation. A small businessperson, worker, vendor, remittance recipient or account-holder may be required to repeatedly provide letters, invoices, proof of address, source-of-funds explanations and identification documents for relatively ordinary transactions.

One particularly troubling practice is the demand that an already-vetted account-holder obtain a copy of the payee’s ID merely to issue a cheque from funds already held in that account. The bank knows its customer. The money is already inside the formal financial system. Yet the customer is effectively asked to become an unpaid compliance officer, collecting and transmitting another person’s private identification document

.Guyana’s Financial Intelligence Unit handbook says reporting entities must carry out customer due diligence, verify customers’ identities, and identify and verify persons who claim to act on a customer’s behalf. It also says enhanced measures should be effective and proportionate to the risk. That is not the same as a blanket legal instruction to collect identification from every person named as the payee on a cheque drawn by an established customer.

A bank may have an internal policy to ask questions or seek further information where a transaction presents a real risk. But internal policy must not be presented to customers as though it were an automatic statutory requirement. And it should not become a routine device for gathering personal data from persons who are not the bank’s customer and who may have no direct relationship with the institution.

Risk, not ritual

A risk-based anti-money-laundering system does not mean treating every customer and every cheque as equally suspicious. It means directing enhanced scrutiny to transactions and relationships that objectively warrant it.

The appropriate targets for the strongest compliance attention include:

♦ Large or unusual transfers lacking an apparent lawful commercial purpose.

♦ Public procurement payments and beneficiaries of major state contracts.

♦ Politically exposed persons, their close associates and opaque corporate vehicles.

♦ Gold, mining, construction, property, import-export and cash-intensive businesses.

♦ Cross-border payments involving high-risk jurisdictions, sanctions exposure or unexplained intermediaries.

♦ Transactions that are inconsistent with the customer’s established income, business activity or risk profile.

♦ Companies whose true beneficial owners cannot be readily identified.

That is where Guyana’s financial system is most likely to encounter substantial exposure—not necessarily in a routine cheque issued by a known customer to pay an ordinary supplier, contractor, employee, landlord, service provider or individual.

The Bank of America case should therefore prompt an uncomfortable question: are banks applying their most demanding scrutiny to the most consequential risks, or are they creating a record of “strict compliance” by burdening small customers who have the least power to challenge them?

Compliance cannot mean arbitrary demands

There is a real difference between a targeted inquiry and arbitrary document collection. If a bank believes that a particular cheque payment requires the payee’s ID, it should be able to state—subject to legitimate investigative limits—whether the request arises from law, a regulator’s direction, a written internal policy, a transaction-risk indicator, or a sanctions-screening concern.

Customers should not be told simply, “It is compliance,” as though that phrase ends all inquiry.

A fair banking standard would require:

♦ A clear written distinction between legal requirements and the bank’s internal procedures.

♦ A transaction-specific reason where additional information is demanded from an established customer.

♦ Proportionate treatment of low-value, routine and clearly explained transactions.

♦ Proper safeguards for copies of third parties’ identification documents, including clear retention and access rules.

♦ Written reasons and a practical review process when a bank delays, rejects or restricts a transaction.

♦ Regulatory examination of whether banks are relying on indiscriminate de-risking instead of conducting competent risk analysis.

The question for regulators

The Financial Intelligence Unit, Bank of Guyana and other relevant authorities should ensure that regulated institutions neither neglect major risk nor misuse AML/CFT obligations to create unjustified obstacles for the public. Guyana’s framework requires customer due diligence, but it also recognizes that enhanced measures must be proportionate and effective.

The public deserves to know whether banks are being examined for the quality of their risk analysis, suspicious-transaction monitoring, politically exposed-person controls, beneficial-ownership checks and escalation systems—not merely for the volume of documents retained in customer files.

Bank of America was not penalized because it failed to make ordinary people produce enough photocopies. It was penalized because regulators found serious failures involving suspicious transactions, correspondent banking, reporting obligations and sanctions compliance.

That distinction matters. Guyana must not allow anti-money-laundering compliance to become an administrative burden imposed most aggressively on the smallest customer, while the larger, more sophisticated and potentially more dangerous financial flows receive inadequate scrutiny.