TD Bank Faces Record-Breaking $9.2-Million Penalty from Canada’s Anti-Money Laundering Regulator
Subtitle: Failure to Implement Proper Controls Leads to Hefty Fine
TD Bank, one of Canada’s leading financial institutions, has been ordered to pay a record-breaking penalty of nearly CAD 9.2 million by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) for inadequate anti-money laundering (AML) controls. This fine is FINTRAC’s largest-ever, marking the latest in an increasingly lengthy list of regulatory actions against financial institutions with weak AML measures.
TD Bank’s Infractions
- TD Bank allegedly lacked appropriate controls to identify and report suspicious transactions, potentially enabling illicit funds to pass through the banking system.
- The penalty follows TD Bank’s disclosure of a US$450-million provision for prospective AML-related penalties and reputation damage in the United States.
TD Bank’s Response and Ongoing Investigations
- A TD Bank representative expressed that the organization has “fully cooperated” with FINTRAC during their investigation and will keep collaborating with the regulator to address raised concerns.
- The bank stated it had already made improvements to its risk management and compliance framework, including hiring external consultants from McKinsey & Co. to tackle the issue.
TD Bank’s Predicament Amidst Global Scrutiny
The revelation of FINTRAC’s fine against TD Bank comes amidst growing international attention towards financial institutions’ AML practices. The consequences of non-compliance can be severe:
- Hefty fines
- Damaged corporate reputation
- Elevated regulatory oversight
Consequences for Non-Compliance
As financial institutions face mounting pressure to strengthen their AML controls, particularly concerning transactions involving complex and opaque jurisdictions, the Canadian financial regulator’s action against TD Bank emphasizes the importance of robust AML compliance systems and potential risks and repercussions of their absence.
Current Regulatory Actions
- TD Bank is currently dealing with investigations from multiple US regulators, including the Office of the Comptroller of the Currency and the Federal Reserve.