The Bank Slate


TD Bank discloses DoJ probe into AML, BSA compliance

TD Bank disclosed that it is cooperating with a Justice Department probe into its compliance with anti-money laundering measures.

The Canadian bank said in its earnings release that it “anticipates monetary and/or non-monetary penalties to be imposed” due to the issue. TD said it is “pursuing efforts to enhance” its Bank Secrecy Act compliance.

The bank was unable to secure regulatory approval to buy First Horizon in Memphis, Tenn., with the parties calling off the $13.4 billion transaction earlier this year. There had been speculation that regulatory scrutiny over TD’s handling of suspicious customer transactions may have been a factor.

“We are working hard to enhance our programs,” Masrani told analysts during TD’s earnings call. He declined to discuss the investigation.

TD incurred a $225 million charge in the most-recent quarter tied to a previously disclosed payment to First Horizon tied to the nixed merger. The bank absorbed another $126 million loss in June when First Horizon preferred stock it bought as part of the transaction converted into common stock.

TD had previously recognized a $147 million loss tied to a valuation adjustment.

In the wake of the terminated acquisition, TD has pledged to grow organically in markets such as south Florida, Atlanta and North Carolina. It also replaced a $50 billion community benefits agreement tied to the acquisition with a more than $2 billion pledge focused on New Jersey.

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