This decision is part of an agreement TD Bank reached with US authorities last year after pleading guilty to violating federal anti-money laundering laws. The Canadian bank, which ranks as the second largest in Canada and the 10th largest in the US according to Yahoo, agreed to pay more than USD 3 billion in penalties as part of the resolution. The deal also included the imposition of an asset cap and other operational restrictions, an uncommon measure in such settlements.
The mortgage portfolio being sold includes jumbo loans, which are typically granted to US homeowners with higher credit scores. Bids for the portfolio are expected to be submitted by next week, according to the report.
In October 2024, TD Bank announced its agreement to pay over USD 3 billion, pleading guilty to criminal charges related to money laundering in the US.
As detailed by regulators, the fine follows TD Bank’s failure to appropriately monitor money laundering by drug cartels and other criminals, allowing them to transfer hundreds of millions of dollars in unlawful funds. In addition, the bank did not enforce sufficient defences against money laundering for nearly 10 years. It did not efficiently act when staff members flagged cases of abuse, including a customer making daily deposits of USD 1 million in cash.
At the time, representatives from TD Bank took full responsibility for the failures of the financial institution’s US AML program, aiming to invest, change, and improve all necessary procedures to deliver on its commitments. Additionally, the bank guaranteed that it held sufficient liquidity to pay the fine and proceed with its operations.
Moreover, TD Bank intended to scale its AML surveillance, planning to hire over 700 new specialists with experience and qualifications in money laundering prevention, financial crimes, and AML remediation.
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