US Bank Braces for Massive $2.6 Billion Fine Amid Money Laundering Probe

TD Bank is setting aside an additional $2.6 billion as it braces for a significant penalty from regulators.

The bank is under investigation for allegedly enabling Chinese gangs to launder $650 million in drug money between 2016 and 2021.

To address the expected fine, TD Bank has earmarked over $3 billion and is partially divesting its stake in Charles Schwab. The bank has been in discussions with U.S. regulators, including the Department of Justice, over shortcomings in its anti-money laundering (AML) procedures.

In its recent earnings report, TD Bank disclosed a $181 million loss for Q3 of this year, attributed to ongoing investigations into its AML practices. TD CEO Bharat Masrani has prioritized improving the bank’s AML controls and stated that significant efforts are underway to resolve these issues.

The bank aims to finalize a resolution with regulators by the end of the year. TD Bank, headquartered in Wilmington, Delaware, manages over $370 billion in assets and ranks as the 10th-largest commercial bank in the U.S.