Banking giant faces cap on US retail banking assets
Toronto-Dominion Bank (TD) is set to pay nearly $3.1 million (USD) worth of fines and other penalties south of the border after it pleaded guilty to failing to stop money laundering.
The banking giant will also see its US retail banking assets capped after two of its units in the US entered guilty pleas before a federal judge in New Jersey on Thursday, with a Justice Department statement describing “long-term, pervasive, and system deficiencies” in its anti-money laundering policies.
TD “failed to take appropriate remedial action” despite those gaps, the Department added, inadvertently opening the door to money laundering by drug cartels and other criminal entities.
Three money laundering networks transferred over $670 million through the bank’s accounts during a four-year spell between 2019 and 2023, according to the Department.
Its fines include $1.89 billion owing to the Justice Department, the largest penalty ever faced under the Bank Secrecy Act, while the asset cap could scupper its strategy to expand in the US through acquisitions.
TD nixed a $13.4 billion deal to snap up regional bank First Horizon Corp. when the investigations were revealed last year, while it was announced last month that longstanding CEO Bharat Masrani would exit the lender in April.
The bank set aside billions in loan loss provisions in its latest quarterly financial results as it braced for the outcome of the US probes.
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