(Bloomberg) — Toronto-Dominion Bank will pay about $3 billion in fines and face restrictions on its U.S. growth in a settlement with regulators over its failure to catch money laundering, the Wall Street Journal reported.
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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 discussing confidential information. The bank said it plans to hold a conference call and will confirm the time later.
The Office of the Comptroller of the Monetary Fund is expected to impose a cap on Toronto-Dominion’s U.S. retail banking assets as part of the deal, the Journal said, citing people familiar with the matter whom it did not identify.
The size of the financial penalty comes as no surprise as Toronto-Dominion has already earmarked $3 billion in provisions for the settlement. But an asset ceiling certainly appears to prevent the bank from continuing the growth-by-acquisition strategy it has pursued in U.S. retail banking over the past two decades. Wells Fargo & Co. has been subject to similar legal 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 prevent money laundering and other financial crimes. can be found at various locations in New York, New York. Jersey and Florida.
The investigations have had a major impact on the bank, including marring the end of CEO Bharat Masrani’s decade-long tenure. He took responsibility for the anti-money laundering challenges when Toronto-Dominion announced his retirement last month. Raymond Chun, who currently leads the Canadian division, will take up the top job on April 10.
Toronto-Dominion was also forced to abandon its $13.4 billion deal last year to acquire U.S. regional bank First Horizon Corp. to be taken over after he indicated that it could not receive approval from regulators in time.
Spokespeople for the bank and the OCC were not immediately available for comment Wednesday, while a representative for the Federal Reserve 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 are lingering questions about whether the company will be able to continue expanding those operations.
Toronto-Dominion recently reached a deal with U.S. prosecutors and regulators to pay more than $20 million to resolve a Treasury Department spoofing case and separately agreed to pay nearly $28 million in fines and restitution to pay for sharing inaccurate US customer data with consumer reporting companies.
–With help from Russell Ward and Katanga Johnson.
(Updates with information about the conference call in the second paragraph.)
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