Plans for the U.S. expansion of TD Bank's branch network have experienced significant deceleration, as reported by the bank's CEO.
TD Bank Scales Back U.S. Expansion Amid Anti-Money Laundering Issues
TD Bank, a leading financial institution, has scaled back its plans for expanding its U.S. branch network due to ongoing anti-money laundering (AML) issues. This decision comes as the bank focuses on rebuilding trust with regulators and strengthening its AML protocols.
In a strategic shift, TD Bank has closed dozens of branches across states like New York, New Jersey, and Florida. This move is part of a broader focus on digital banking trends and regulatory pressures. As a result, the bank's U.S. assets have decreased from $434 billion to $399 billion by April 2025, achieved through strategic loan sales and business wind-downs.
The bank's leadership, under CEO Raymond Chun since February 2025, has prioritised investing over $1 billion in AML controls through 2026. This investment includes the deployment of advanced technologies such as machine learning to strengthen AML protocols, with compliance monitoring by Guidepost Solutions for greater transparency.
The AML remediation efforts have had a significant impact on TD's growth capacity in the U.S. market. The bank's expansion plans have been put on hold or scaled back to focus on regulatory compliance and risk management. Last quarter, expenses totaled $11 billion due to AML remediation.
TD has set aside about $3.57 billion for estimated penalties and fines related to AML matters, and an additional $2.6 billion is expected for further AML penalties. The bank has also invested in its risk and control infrastructure and hiring to address these issues.
CEO Bharat Masrani acknowledged these issues during an appearance at a Scotiabank conference. Masrani emphasised the importance of coordinating and ensuring that the right information gets to the right staff and areas of the bank in real time. He also aims to deepen accountabilities for various types of risk, from the front lines to the audit function.
However, Masrani did not provide specific details on the number of employees impacted by the AML issues or the updated number of branch openings in the U.S. TD spokespeople did not immediately respond to questions on these matters.
Despite these challenges, TD's U.S. unit that serves about 10 million consumers has performed well. The bank's U.S. CEO Leo Salom has addressed the effect of the AML probe on U.S. branch opening plans.
The Justice Department has said that criminals have bribed bank employees, and TD is currently facing civil and criminal investigations into its U.S. AML program, stemming from an alleged scheme involving drug fentanyl traffickers.
In conclusion, TD Bank's U.S. expansion plans have been affected by AML issues, leading to a reduction in the bank's physical presence and a focus on technology-driven compliance improvements to restore regulatory confidence and ensure sustainable operations in the U.S. market.
In light of the ongoing anti-money laundering (AML) issues, TD Bank has scaled back its U.S. expansion, focusing instead on rebuilding trust with regulators and strengthening its AML protocols across various business sectors, including banking and insurance. The bank is investing heavily in advanced technologies, such as machine learning, to bolster its AML controls and combat financial crimes, demonstrating a commitment to upholding industry standards in finance.
