TD Bank Group has announced a resolution with US regulators concerning previously disclosed investigations related to its failure of the US Bank Secrecy Act (BSA) and anti-money laundering (AML) compliance programmes.
As part of the resolution, the bank and some of its US subsidiaries have agreed to orders with the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board, and the Financial Crimes Enforcement Network (FinCEN).
TD Bank has also entered into plea agreements with the Department of Justice’s Criminal Division, Money Laundering and Asset Recovery Section, and the US Attorney’s Office for the District of New Jersey.
In line with the settlement, TD Bank will pay around $3.09bn, most of which is covered by previous provisions of $3.05bn. The bank is also required to redress its US AML programme.
In addition, the bank’s two US banking subsidiaries, TD Bank, NA and TD Bank USA should not have assets of more than $434bn. This restriction does not apply to TD Securities or the bank’s Canadian or other global operations.
The subsidiaries will also face more rigorous approval processes for new services, products, markets, and stores to ensure any AML risks are properly mitigated.
TD Bank said that it has developed plans to meet the requirements and limitations contained in the consent orders.
The bank also confirmed that it has the financial and operational stability to deliver the required AML improvements while continuing to serve its more than ten million US customers.
Besides, it noted that a multi-year effort is needed to implement a robust and sustainable AML system.
TD Bank group president and CEO Bharat Masrani said: “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 apologise to all our stakeholders.”
TD Bank has already appointed a new US head of financial crime risk management and BSA/AML officer. The bank has also hired more than 700 new AML specialists and added 40 new leadership roles.
Furthermore, TD Bank has strengthened its oversight structure and introduced new training, processes, and data-driven technologies to improve financial crime detection and mitigation.
