TD Bank announced cooperation with regulators and law enforcement agencies in the framework of the proceedings concerning the lender’s compliance with the provisions of the normative base defining the legal principles of combating money laundering.
Information about the interaction of a financial institution with the authorities is contained in the bank’s report to shareholders for the third quarter, which was published last Thursday, August 24. The creditor stated that following the results of this investigation, punitive measures may be applied. The financial institution also announced work to improve its compliance program with the Law on Bank Secrecy/Anti-Money Laundering.
The report contains information that the lender responded to official and unofficial requests from regulators and law enforcement agencies regarding compliance with anti-money laundering regulations within the framework of the activities of this financial institution. The bank noted that data on these issues were provided both in the case of specific clients, counterparties, or incidents in the United States and in general about the lender’s business.
The report separately states that the bank does not know how the investigation will end and what decision the authorities will make regarding the financial institution. The lender does not exclude that a measure of influence in the form of a financial obligation or a form of liability will be chosen in relation to it, which does not provide for monetary payments from TD Bank. Also, a financial institution allows the possibility of a combination of tangible and intangible sanctions.
This news comes after it became known about TD Bank’s failed efforts to acquire First Horizon Bank. This year, according to media reports, regulators were in no hurry to approve of the deal. Journalists, referring to insiders, claim that the authorities have certain concerns that a financial institution that has decided to expand its ownership structure through the acquisition of First Horizon Bank may be involved in the processing of suspicious customer transactions.
In early May, it became known about the completion of the bank’s efforts to implement this transaction, the value of which was estimated at $13.4 billion. At the same time, it was reported that the final decision on this issue was made after TD Bank reported that there were no even preliminary deadlines for obtaining permission to conclude a business agreement.
Also in May, the media, citing anonymous sources, published data that regulators are not sure that TD Bank fully complies with the regulatory framework that defines the practice of suppressing actions aimed at money laundering.
An analyst at Barclays, while talking to reporters this spring, said that the failed deal would have long-term consequences. According to him, this unfortunate experience will cause TD Bank to refuse to acquire retail lenders over the next three to five years.