The award-winning Compliance into the Weeds is the only weekly podcast which takes a deep dive into a compliance related topic, literally going into the weeds to more fully explore a subject. Looking for some hard-hitting insights on compliance? Look no further than Compliance into the Weeds!
In this episode, Tom Fox and Matt Kelly take a deep dive into the TD Bank BSA and AML enforcement action, which led to $3 billion in fines and penalties.
Tom and Matt discuss TD Bank’s conscious strategy of not raising the budget, known as the Flat Cost Paradigm or Zero Expense Growth Paradigm, and how this strategy severely restricted the Bank’s compliance and AML functions. This tactic aimed to increase profits by keeping expenditures flat year after year. The impact of this strategy is particularly evident in the global AML team’s expenditures on the U.S. anti-money laundering program, which decreased in 2021 compared to 2018. Despite significantly growing U.S. assets and net income, the bank refrained from increasing its budget for essential programs, a fact highlighted in the Justice Department indictment. The Bank’s strategy serves as a clear warning about the dangers of prioritizing profits over compliance.
Key Highlights:
- Introduction to the Flat Cost Paradigm
- Details of the Budget Strategy
- Impact on Anti-Money Laundering Efforts
- Financial Growth Amidst Budget Constraints
Resources:
- Blogs
Matt in Radical Compliance
Tom in the FCPA Compliance and Ethics Blog
- Tom
- Enforcement Related Material
OCC
DOJ
TD Bank US Holding Company Information
TD Bank US Holding Company Plea Agreement and Attachments
