Toronto Dominion's Incoming CEO Lays Out AML Remediation Plans

TD Bank's AML Remediation and Strategic Review - TD Bank faced a significant penalty of $3 09 billion due to AML shortcomings, leading to a plea agreement with the US Department of Justice [1][3] - The bank is reducing its US retail assets by approximately 10% to comply with the $434 billion limit set by the OCC [5] - TD has strengthened its AML staff and hired in risk and audit areas, aiming to meet regulatory expectations [5][6] - The bank appointed a new head of US financial crimes and risk management and reorganized its AML team in the US [6] - TD plans to integrate external benchmarking to ensure appropriate resource funding and support for AML efforts [6][7] Strategic Review and Capital Allocation - TD suspended its medium-term growth targets and initiated a comprehensive strategic review due to rising expenses [2] - The bank is considering offloading some loan portfolios and repositioning bond holdings to optimize return on equity in the US [8] - TD is reviewing its ownership stake in Charles Schwab, having reduced its stake from 12 3% to 10 1% last year [9][11] - The bank clarified that its deposit agreement with Schwab will continue regardless of its investment decisions [10][11] Industry Context and Legal Issues - Deutsche Bank's broker-dealer subsidiary was fined $4 million by the SEC for failing to file Suspicious Activity Reports promptly [14] - Bank of America received a cease-and-desist order from the OCC to address deficiencies in its BSA/AML and sanctions compliance programs [15] TD's Financial Performance - TD shares lost 2 3% over the past six months, underperforming the industry's 4 8% growth [12] - The bank currently carries a Zacks Rank 4 (Sell) [13]