TD Bank faces $3 billion in penalties as part of the US settlement, WSJ reports from Reuters

(Reuters) – Canada’s TD Bank is expected to pay about $3 billion in penalties as part of a settlement with U.S. regulators and prosecutors over allegations it failed to properly monitor money laundering by drug cartels , the Wall Street Journal reported.

The bank’s US unit is expected to plead guilty to the charges on Thursday, the report said on Wednesday.

TD Bank did not immediately respond to a Reuters request for comment.

As part of the deal, the main US bank regulator, the Office of the Comptroller of the Currency (OCC), is also expected to impose an asset limit that prevents the Canadian lender from growing above a certain level in the country, a the newspaper reported, citing people familiar with the matter.

Both the US Department of Justice (DOJ) and the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) plan to put in place independent monitors to closely monitor the lender and ensure compliance with the covenants, the report said.

FinCEN’s monitor is expected to be in place for four years, the WSJ reported, citing a person familiar with the matter.

The settlement will include DOJ, FinCEN, the OCC and the Federal Reserve, with the Justice Department taking the lion’s share of about $1.8 billion in penalties, with FinCEN receiving $1.3 billion, the report said.

Spokesmen for the DOJ, OCC and FinCEN did not immediately respond to Reuters requests for comment.