CFPB says the big six Canadian bank's reporting errors continued for years
TD Bank has been fined US$20 million and ordered to pay almost $8 million to tens of thousands of customers for repeatedly sharing inaccurate data with consumer reporting companies over several years.
In the latest regulatory blow to the Canadian big six banking group, its US subsidiary is accused of prioritizing growth above fairness to its customers and being slow to address its illegal actions once they were known.
The bank is already under investigation over its US Bank Secrecy Act (BSA)/anti-money laundering (AML) program and has taken a provision of US$2.6 billion in anticipation of the financial penalties it expects from US regulators.
The Consumer Financial Protection Bureau (CFPB) said Wednesday that New Jersey headquartered TD Bank, NA, “repeatedly shared inaccurate, negative information about its customers to consumer reporting companies.”
The information included systemic errors about credit card delinquencies and bankruptcies, tenant screening reports, and other information which would typically be used by financial institutions, landlords, and employers to make decisions on credit, housing, and employment.
Among the reports shared were details of banking and credit card accounts that CFPB says TD knew or suspected were opened fraudulently. When it realized that it was sharing inaccurate information, the regulator says TD Bank was slow to correct many of the errors. “The bank knew of many of these inaccuracies for more than a year before fixing them,” the CFPB said.
“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,” said CFPB Director Rohit Chopra. “Rather than treating its customers fairly and following the law, TD Bank’s management clearly cared more about growth and expanding its empire through mergers. Regulators will need to focus major attention on TD Bank to change its course.”
It's the second time that TD bank has faced enforcement action from the CFPB. In 2020 it was ordered to provide an estimated $97 million in restitution to about 1.42 million consumers and to pay a $25 million penalty for illegal overdraft practices.
