TD Bank has appointed a compliance monitor following a $3 billion penalty imposed by U.S. authorities for lapses in its anti-money laundering measures. The decision comes as part of orders from the Department of Justice and Financial Crimes Enforcement Network. The Chief Financial Officer of TD Bank stressed that addressing AML remediation is a top priority for the bank moving forward.
The recent measures and the appointment of a compliance monitor aim to ensure that the bank meets all regulatory requirements and strengthens its internal safeguards against financial crimes. The U.S. Justice Department and the Financial Crimes Enforcement Network have jointly selected consulting firm Guidepost Solutions as the independent monitor for TD Bank’s settlement. Guidepost Solutions will be responsible for ensuring that TD Bank complies with the terms of the settlement and implements effective anti-money-laundering procedures.
During a recent earnings call, TD’s U.S. head noted that the bank is looking forward to working with Guidepost Solutions to oversee the required remediation efforts. TD’s efforts to remediate anti-money laundering issues cost the bank $86 million in the first fiscal quarter of 2025, according to the bank’s U.S. CEO, Leo Salom.
Compliance monitor to oversee AML improvements
TD’s new CEO Raymond Chun emphasized that AML remediation remains the bank’s primary focus. The bank is centralizing all investigative cases into a new single case management system and deploying machine-learning tools designed to analyze customer data for potential illicit activity. These initiatives are expected to be operational by the third quarter of 2025.
“Building these capabilities will enable us to detect, escalate, and report potential activity of interest earlier and more effectively,” Salom said. “We remain focused on completing the outlined remediation actions. There is still much to do, and this is a multiyear process, but we remain unwavering in our commitment.”
TD anticipates the cost for AML programs and related governance investments to reach approximately $500 million in fiscal 2025, as stated by CFO Kelvin Tran.
The AML issues arose during former CEO Bharat Masrani’s tenure, who has since stepped down, with Chun taking over leadership earlier than initially planned. In conjunction with the AML issues, TD also reduced pay for 41 executives, taking into account the severity and financial implications of the AML failures. By addressing these compliance challenges, TD aims to restore trust and reinforce its commitment to robust AML practices.
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