DOEREN MAYHEW
TD Bank Hit With $ 3B in Penalties for BSA Violations
As an employee of a financial institution , we must imagine your worst fear is your employer making news or social media headlines . It is almost never good news . Sure , we all provide for our communities , countless charities , local businesses , etc ., but when financial institutions make news headlines , it almost always has a negative overtone . Usually , it involves data breaches and / or financial crime or embezzlement . Most recently , TD Bank , the 10 th largest bank in the U . S ., made news headlines on Oct . 10 , 2024 , when it plead guilty and agreed to pay over $ 3 billion in penalties to the Department of Justice ( DOJ ) and Financial Crimes Enforcement Network ( FinCEN ) for violating the Bank Secrecy Act ( BSA ) and money laundering .
TD Bank conspired to fail maintaining an Anti-Money Laundering ( AML ) program that complies with the BSA , file accurate Currency Transaction Reports ( CTRs ), and detect and report potential suspicious activity , among other BSA violations . According to the DOJ and FinCEN , TD Bank chose to prioritize profits , growth and convenience over compliance with the law by not investing the time , money or managerial resources necessary in the maintenance of the bank ’ s BSA / AML program . With the DOJ and FinCEN not holding back on financial institutions participating in crime rather than preventing it , TD Bank is now faced with a hefty $ 3 billion in penalties .
What Went Wrong
It has been stressed repeatedly when BSA / AML deficiencies exist , they require immediate remedial attention . For over a decade , TD Bank was aware of integral AML deficiencies but failed to take corrective action . During that time , agencies and firms identified repeated concerns regarding TD Bank ’ s weak transaction monitoring program to detect suspicious activity . This negligence made the bank an easy destination for perpetrators of financial crime .
The past few years have been a difficult road for financial institutions . Increasing rates , prices booming , potential mergers and risks , such as cybersecurity , continue to increase . Many financial institutions have had to make some difficult decisions and maintain tighter budgets . While profitability has been a challenge , risk management and compliance should not be overlooked . Unfortunately , many times , it is overlooked during these stressful times . A good example is the collapse of Silicon Valley Bank and Silvergate Bank in 2023 . The collapse of these two institutions was due to several factors , but a notable one was weaknesses in corporate governance and risk management . The senior executives at TD Bank enforced a budget mandate , which prioritized never increasing the budgets over risk management and compliance . As a result , the bank failed to appropriately fund and staff its BSA / AML program , and continually postponed the funding and staffing in order to meet the needs of the budget mandates .
When developing and improving a transaction monitoring process , new products and services should always be considered . Not only did TD Bank neglect to address known deficiencies with their transaction monitoring processes
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