Regulators Tell TD Bank How to Fix AML Failures

TD Bank Group said Thursday (Oct. 10) that it takes full responsibility for the failures of its U.S. Bank Secrecy Act (BSA) and anti-money laundering (AML) compliance programs and will continue its work to remediate them.

The bank said this on the day it and several U.S. regulators and authorities announced that TD Bank Group and some of its U.S. subsidiaries consented to orders and entered into plea agreements related to previously disclosed investigations of its BSA and AML programs.

“Money laundering is a serious global threat, and our U.S. operation did not maintain an adequate AML program to thwart criminal activity,” Alan MacGibbon, chair of the board of TD Bank Group, said in a Thursday press release.

“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.”

U.S. regulators and authorities said Thursday that the settlements include a historic penalty and some first-ever remediation requirements.

The Justice Department said in a Thursday press release that TD Bank N.A. (TBNA) and its parent company TD Bank US Holding Co. (TDBUSH) resolved Justice’s investigation into BSA and AML violations by pleading guilty and agreeing to pay over $1.8 billion in penalties.

Court documents show that between January 2014 and October 2023, TD Bank had “long-term, pervasive and systemic deficiencies” in its AML program but failed to take appropriate remedial action, the release said.

“By making its services convenient for criminals, TD Bank became one,” Attorney General Merrick B. Garland said in the release. “Today, TD Bank also became the largest bank in U.S. history to plead guilty to Bank Secrecy Act program failures, and the first U.S. bank in history to plead guilty to conspiracy to commit money laundering.”

The Office of the Comptroller of the Currency (OCC) said in a Thursday press release that it responded to the bank’s BSA and AML deficiencies by announcing a cease and desist order and a $450 million civil money penalty against TD Bank, N.A. and TD Bank USA, together with a restriction on the growth of the bank and requirements that it remediate the deficiencies in a timely manner.

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) said in a Thursday press release that it assessed a $1.3 billion penalty against TD Bank, N.A. and TD Bank USA, N.A. for the BSA and AML violations — saying this is the largest penalty against a depository institution in the history of the U.S. Treasury and FinCEN.

In remarks prepared for delivery at a Thursday press conference, Deputy Secretary of the Treasury Wally Adeyemo said: “In addition to a historic penalty, TD Bank has agreed to a four-year monitor to oversee its remedial measures, including end-to-end review of its AML program.

“The bank will also be required to provide missing suspicious activity reports and, for the first time, FinCEN will require additional accountability and data governance reviews to provide recommendations for changing TD Bank’s culture of noncompliance.”