TD faces US growth limits, $3 billion in penalties for money laundering failures

Toronto-Dominion Bank will pay about $3 billion in penalties and face restrictions on its U.S. growth in a settlement with regulators for failing to catch money laundering, the Wall Street Journal reported.

Regulators are likely to announce a settlement with the Canadian bank on Thursday, although that timing could change, a person familiar with the matter told Bloomberg, asking not to be named to discuss confidential information. The bank said it plans to hold a conference call and will confirm the time later.

The Office of the Controller of the Currency is expected to impose a cap on Toronto-Dominion’s U.S. retail banking assets as part of the settlement, the Journal said, citing people familiar with the matter who did not identify it.

The size of the financial penalty is not a surprise, as Toronto-Dominion has already set aside $3 billion in provisions for the settlement. But an asset cap appears to prevent the bank from continuing the growth-by-acquisition strategy it has pursued in U.S. retail banking for much of the past two decades. Wells Fargo & Co. has been under similar regulatory limits on the size of its balance sheet for several years.

Canada’s second-largest bank has faced a series of legal challenges south of the border, including investigations by the OCC, the Department of Justice and the Federal Reserve into alleged failures to catch money laundering and other financial crimes at several branches in New York, New York. Jersey and Florida.

The investigations had a wide-ranging impact on the bank, including breaking the end of chief executive Bharat Masrani’s ten-year tenure. He took responsibility for the anti-money laundering challenges when Toronto-Dominion announced its withdrawal last month. Raymond Chun, who currently heads its Canadian division, will take over the top job on April 10.

Toronto-Dominion was also forced out of its $13.4 billion deal to acquire US regional bank First Horizon Corp. last year after saying it could not get regulatory approvals in time.

Spokesmen for the bank and the OCC were not immediately available for comment Wednesday, while a Federal Reserve representative declined to comment.

The Canadian bank has more than 10 million U.S. customers and nearly 1,200 branches concentrated along the East Coast, and its U.S. retail operations account for about a quarter of its revenue. But there were lingering questions about whether he would be able to continue to grow his business.

Toronto-Dominion recently reached an agreement with U.S. prosecutors and regulators to pay more than $20 million to resolve a Treasury forgery case, and separately agreed to pay nearly 28 millions of dollars in fines and restitution for sharing inaccurate US customer data with consumer reporting companies.

Top photo: Pedestrians walk past a TD Ameritrade Holding Corp. bank branch. of New York, New York, USA, Saturday, April 20, 2019. TD Ameritrade Holding Corp. is scheduled to release earnings figures on April 23.

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