TD Bank, following several years of cooperation and engagement with authorities and regulators, reached a resolution of previously disclosed investigations related to its U.S. Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) compliance programs.
The bank and certain of its U.S. subsidiaries have consented to orders with the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board and the Financial Crimes Enforcement Network (FinCEN) and entered into plea agreements with the Department of Justice, Criminal Division, Money Laundering and Asset Recovery Section and the United States Attorney’s Office for the District of New Jersey.
Details of the resolution include:
- A total payment of approximately $3.09 billion, largely covered by previous provisions of $3.05 billion.
- Requirements to remediate the bank’s U.S. AML program, broadly aligned to its existing remediation program, which is progressing steadily under the direction of its new U.S. AML leadership team.
- Requirement to prioritize the funding and staffing of the remediation, which is already in place.
- Formal oversight of the AML remediation through a Monitorship.
- The total assets of TD’s two U.S. banking subsidiaries (TD Bank and TD Bank USA) cannot exceed $434 billion (total assets as at Sept. 30, 2024); the limitation does not apply to TD Securities, or any of the bank’s Canadian or other global businesses.
- The U.S. Bank is subject to more stringent approval processes for new bank products, services, markets and stores to ensure the AML risk of new initiatives is appropriately considered and mitigated.
Plans are in place to address the requirements and limitations contained in the consent orders, including adjustments to the bank’s U.S. balance sheet. These actions will provide the asset capacity required to serve and support U.S. customers’ financial needs without interruption, now and into the future.
“We have taken full responsibility for the failures of our U.S. AML program and are making the investments, changes and enhancements required to deliver on our commitments. This is a difficult chapter in our bank’s history. These failures took place on my watch as CEO and I apologize to all our stakeholders,” Bharat Masrani, group president and CEO of TD Bank, said. “I want to thank our colleagues, who continue to demonstrate their dedication and who play an important role in preventing criminal activity.”
The bank has actively cooperated in good faith with regulators and the Department of Justice throughout their investigations and continues to assist in the prosecution of the criminals who leveraged its AML program weaknesses, including five of its store-level employees.
“Money laundering is a serious global threat, and our U.S. operation did not maintain an adequate AML program to thwart criminal activity. The board has, and continues to, take action to address these failures and hold those responsible accountable. We have appointed new leaders across our U.S. operations, overhauled our U.S. AML team and prioritized investments to drive the required changes,” Alan MacGibbon, chair of the board at TD Bank, said. “Enhancing our program and meeting our obligations today and into the future is the number one priority of the board and management.”
U.S. AML Program Remediation
“Criminals were able to exploit our systems and our U.S. AML program did not deliver. We continue to work with purpose, focus and urgency to remediate our AML program and earn back the trust of our regulators and other stakeholders. We are committed to working productively with the Monitorship to build a sustainable AML program and meet our obligations under the terms of the resolution,” Leo Salom, president and CEO of TD Bank, said. “Our U.S. operation is strong, and we will continue to serve the needs of the 10 million households and businesses in the U.S. who rely on us for their financial goals.”
