Are you a TD Bank account holder? If so, your bank has just been fined some real paper. TD Bank has agreed to pay $3 billion to settle charges related to its failure to adequately monitor money laundering by drug cartels. The settlement includes a $1.3 billion penalty paid to the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN), marking a record fine for a bank, and $1.8 billion to the U.S. Department of Justice (DOJ). The bank will plead guilty to violating the Bank Secrecy Act.
The DOJ identified “long-term, pervasive, and systemic deficiencies” in TD’s anti-money laundering procedures. Between January 2018 and April 2024, more than 90% of TD Bank’s transactions went unmonitored, facilitating over $670 million in money laundering through its accounts by three separate networks. Attorney General Merrick Garland criticized the bank for making its services “convenient for criminals.” Deputy Treasury Secretary Wally Adeyemo added that TD Bank prioritized growth and profit over legal compliance, enabling drug trafficking that harmed American citizens.
Get this, one case involved TD employees accepting over $57,000 in gift cards to process $470 million in suspicious cash deposits without reporting them. The Office of the Comptroller of the Currency (OCC) stated that the bank processed hundreds of millions in transactions that clearly signaled illegal activity. The OCC has restricted TD Bank’s growth in the U.S. as part of the settlement, a rare move seen previously with Wells Fargo following its 2018 scandal.
TD Bank CEO Bharat Masrani acknowledged the failures, apologizing and vowing to enhance the bank’s anti-money laundering capabilities. The bank is hiring over 700 specialists and implementing new processes to improve its financial crime prevention efforts. As part of the agreement, FinCEN will monitor TD Bank for four years to ensure compliance.
What’s more, TD Bank’s stock fell 6% following the announcement, and the company expects a $1.5 billion post-tax charge as a result. The settlement has drawn criticism from figures like Senator Elizabeth Warren, who argued that the penalties do not go far enough in holding bank executives accountable. TD Bank has faced previous legal challenges, including a $1.2 billion settlement last year over its involvement in a Ponzi scheme, though the bank denied wrongdoing in that case.
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