Toronto-Dominion Bank will pay almost $28 million in fines and restitution after the Consumer Financial Protection Bureau said the lender shared inaccurate information about tens of thousands of US customers with consumer reporting companies.
A CFPB investigation found the information included personal bankruptcies and credit card delinquencies as well as bank accounts that “TD Bank knew or suspected were fraudulently opened,” the agency said in a statement Wednesday. “After the bank realized it was botching its reporting to consumer reporting companies, it took far too long to correct many of its errors.”
The information TD shared was for a range of consumer reports, including job and tenant screening and other background reports, the types of data that can affect consumers’ employment prospects, access to credit and ability to secure housing, according to the CFPB.
The bank agreed in a consent order filed Wednesday to pay $7.76 million to the tens of thousands of consumers affected by the fraudulent or inaccurate reports and a $20 million civil penalty. It also agreed to a range of reporting and compliance measures.
“Long before this settlement, TD self-identified these matters and voluntarily and proactively implemented enhancements to our furnishing and dispute handling practices,” Miranda Garrison, a spokesperson for the bank, said by email. “TD cooperated fully to resolve this matter and is committed to continuing to deliver on its responsibilities to its customers.”
The fine is the latest black eye for the Canadian bank, which has a large US operation with more than 10 million customers. It’s already facing allegations it failed to catch money laundering and other financial crimes at numerous US branches.
TD hopes to settle multiple probes with US authorities including the Department of Justice over anti-money laundering compliance lapses by the end of the year. The bank expects to pay more than $3 billion in fines and analysts have said it could also face restrictions on future acquisitions and organic growth in the country.
‘Expanding its Empire’
Rohit Chopra, director of the CFPB, said that rather than treating its customers fairly, TD cared more about “growth and expanding its empire through mergers.”
“The CFPB’s investigation found that TD Bank illegally threatened the consumer reports of its customers with fraudulent information and then barely lifted a finger to fix it,” Chopra said. “Regulators will need to focus major attention on TD Bank to change its course.”
The CFPB said that by January 2022, the bank had identified hundreds of thousands of deposit account openings that were “either confirmed or suspected to be fraudulent.”
By April of 2023, the agency said that “instead of making sure only accurate information about its customers was sent to consumer reporting companies, TD Bank kept sharing fraudulent information about those accounts as if it belonged to the bank’s customers.”
The CFPB also said the bank reported inaccurate information about credit card accounts to consumer reporting companies and that it didn’t have adequate processes in place to investigate and resolve disputes over consumer reporting.
