TD Bank to Pay $3 Billion in Penalties

By Nivedita Balu, Chris Prentice and Karen Freifeld
TORONTO/NEW YORK (Reuters)

TD Bank will pay $3 billion in U.S. penalties, plead guilty to criminal charges regarding insufficient anti-money laundering measures, and accept an asset cap limiting its growth, according to sources.

The bank will pay a total of $3 billion in penalties to U.S. regulators, including the Justice Department and the Treasury Department's Financial Crimes Enforcement Network (FinCEN). This deal is expected to be publicly announced later on Thursday and will conclude investigations by the Justice Department, the Office of the Comptroller of the Currency (OCC), and FinCEN. The deal will also mandate independent monitoring of the bank.

As Canada’s second-largest bank and the tenth-largest in the U.S., TD Bank had previously disclosed that it was responding to inquiries from regulators last year. This followed its decision to terminate a $13 billion acquisition of U.S. regional lender First Horizon.

Since the issues arose, TD has allocated $3 billion for penalties, invested in enhancing its compliance programs, terminated several U.S. branch employees, and appointed its Canadian personal banking head as the new CEO, thereby distancing management from the scandal.