Prime Minister Justin Trudeau says the federal government is “concerned” about the actions of TD Bank’s U.S. affiliates that led to a landmark $3 billion settlement to resolve money laundering charges this month.
Trudeau made the comments during question period in the House of Commons on Wednesday when asked by NDP MP Don Davies what the Liberals had done to “address TD Bank’s repeated criminal actions.”
“Of course, we are very concerned about TD Bank’s actions in the United States,” the Prime Minister responded.
“We make sure every day that banks in Canada behave by all the rules. “We have continued to strengthen financial oversight and are ensuring that those responsible for these irregularities in the United States are held fully accountable.”
The comment appears to be the first public acknowledgment by Trudeau or any minister of the case, in which TD pleaded guilty to violating a U.S. law meant to prevent money laundering — the largest bank to do so.
At the time the settlement was announced, Canada’s superintendent of financial institutions, Peter Routledge, said in a statement that the information revealed in the case was “serious,” but he could not comment on the affairs of any regulated Canadian financial institution. at the federal level.
A spokesperson for Finance Minister Chrystia Freeland’s office told Global News that the deputy prime minister “takes the stability of Canada’s financial system very seriously” and is “closely monitoring the situation” along with regulators. .
The US government had accused TD of ignoring multiple red flags from high-risk customers and creating a “convenient” environment for bad actors to exploit. TD failed to monitor more than $18 trillion in customer activity over about a decade, allowing three money laundering rings to transfer illicit funds through accounts at the bank, U.S. authorities said.
In addition to the more than $3 billion fine, the plea deal included a rare asset limit for TD’s U.S. business interests that is typically reserved for serious cases. The penalty dealt a blow to TD, which is the 10th largest bank in the U.S. and planned to expand further.
Some U.S. politicians said the sanctions did not go far enough, including U.S. Sen. Elizabeth Warren, who said they “free bad bank executives for allowing TD Bank to be used as a criminal slush fund.”
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The plea deal has also sparked scrutiny over the relatively modest penalties imposed by Canada for similar activities.
In Canada, Fintrac can impose a maximum fine of $500,000 for each very serious reporting violation, or can refer violations for potential criminal prosecution.
In contrast, the huge U.S. fine was due in part to U.S. rules that allow regulators to fine banks up to $500,000 for each day they lack a functioning anti-money laundering program.
The limited fines available to Fintrac mean the $9.2 million fine it imposed on TD earlier this year was the largest it has ever issued.
Fintrac said in a statement that in addition to its record sanction against TD, it also required the bank to develop an action plan to address its deficiencies, and the regulator could impose additional sanctions if the bank does not follow through with its plan.
TD has said it is making the investments, changes and improvements necessary to meet commitments related to its anti-money laundering program. Incoming CEO Ray Chun told investors on a conference call the day the U.S. plea deal was announced that TD “will make the necessary changes to put the bank on a stronger footing” and “will meet our commitments to our regulators.
The federal government held public consultations last year on ways to improve and strengthen Canada’s anti-money laundering regime and increased regulatory requirements for casinos and other non-bank entities earlier this year.
The finance department told The Canadian Press in a statement that the government has zero tolerance for financial crime and is continually working to improve Canada’s ability to combat financial crime.
A spokesperson said the government has introduced a significant number of measures to strengthen oversight of money laundering in Canada, including increasing information sharing, and since 2019 has invested nearly $379 million to fight financial crime.
Routledge, speaking at a risk conference in early October, acknowledged that money laundering was “a more significant risk than I appreciated three years ago when I started the job” and that increasing incidents had forced his office to study the matter more closely.
— with Canadian Press archives
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