Federal Reserve fines TD Bank for lack of oversight of anti-money laundering laws

Toronto-Dominion (TD) Bank was fined $123.5 million by the Federal Reserve Board for violations related to anti-money laundering laws.

According to the Fed, TD Bank failed to conduct adequate risk management and oversight of its retail banking operations in the United States. This resulted in a U.S. subsidiary being used to launder hundreds of millions of dollars in illicit proceeds.

To remedy the problem, the Fed Board is requiring TD to:

• Establish a new office in the United States dedicated to remediating the deficiencies identified in the order;
• Relocate to the United States the parts of its anti-money laundering compliance program that are responsible for complying with U.S. law. This program will be subject to oversight by U.S. regulators;
• Certify that sufficient resources and attention are allocated to correcting the firm’s anti-money laundering deficiencies prior to issuing any dividends or capital distributions; and
• Undertake a thorough and independent review of the firm’s board of directors and management to ensure adequate oversight of the U.S. operations.

Canada’s Office of the Superintendent of Financial Institutions, the home country supervisor of TD, can act in the implementation of these requirements as permitted by its legal authority.

This action is being taken in conjunction with criminal and regulatory actions by the U.S. Department of Justice, the U.S. Attorney’s Office for the District of New Jersey, the Department of the Treasury’s Financial Crimes Enforcement Network, and the Office of the Comptroller of the Currency.

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