11/09/2024 | Press release | Distributed by Public on 11/09/2024 22:00
WASHINGTON, D.C. - Today, the Consumer Financial Protection Bureau (CFPB) ordered TD Bank to pay $7.76 million to tens of thousands of victims of the bank's illegal actions. For years, the bank repeatedly shared inaccurate, negative information about its customers to consumer reporting companies. The information included systemic errors about credit card delinquencies and bankruptcies. In addition to the redress, the CFPB is ordering TD Bank to pay a $20 million civil money penalty.
Consumer reports, including credit reports, employment screening reports, tenant screening reports, and other background reports, are used by financial institutions, employers, and landlords, among others, to decide whether to extend credit, housing, or employment to a consumer. The inaccurate information shared by TD Bank related to credit card and bank deposit accounts, including accounts TD Bank knew or suspected were fraudulently opened. 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 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."
TD Bank, N.A. is a national bank headquartered in Cherry Hill, New Jersey. It is one of many subsidiaries of Toronto-based Toronto-Dominion Bank (NYSE: TD). Toronto-Dominion Bank and its subsidiaries are collectively known as TD Bank Group. TD Bank Group reported $1.97 trillion in assets as of the third quarter of 2024. The U.S.-based TD Bank is the tenth-largest commercial bank in the country with more than 1,200 branches. As of June 30, 2024, TD Bank had $370 billion in total assets. Among the products and services offered by TD Bank are credit cards and deposit accounts. TD Bank furnishes information to credit and other consumer reporting companies about its customers related to their credit cards and deposit accounts. In February 2022, TD Bank announced that it would acquire another large financial institution, First Horizon Bank. The deal was later abandoned in 2023.
The CFPB's investigation found that for several years TD Bank repeatedly gave inaccurate account information to consumer reporting companies. At times, the information contained systemic errors about personal bankruptcies and credit card delinquencies. Other times, the bank gave consumer reporting companies information it knew or suspected was fraudulent. The bank knew of many of these inaccuracies for more than a year before fixing them. Additionally, when customers or consumer reporting companies submitted disputes to TD Bank, it failed to conduct proper investigations and sometimes to conduct any investigation at all. TD Bank's actions affected hundreds of thousands of its customers. The bank's actions violated both the Fair Credit Reporting Act and the Consumer Financial Protection Act.
Specifically, TD Bank harmed consumers by:
Under the Consumer Financial Protection Act, the CFPB has the authority to take action against institutions violating consumer financial protection laws, including the Fair Credit Reporting Act and its implementing regulation, Regulation V, and for engaging in unfair, deceptive, or abusive acts or practices. The CFPB's order requires TD Bank, among other things, to:
This is the CFPB's second enforcement action against TD Bank. In 2020, the CFPB ordered TD Bank 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.
Learn more about credit reports and scores.
Read the CFPB's April 2024 report on violations of credit report accuracy requirements.
Read consumer complaints about TD Bank and credit furnishing.
Consumers can submit complaints about financial products and services by visiting the CFPB's website or by calling (855) 411-CFPB (2372).
Employees who believe their company has violated federal consumer financial protection laws are encouraged to send information about what they know to [email protected]. To learn more about reporting potential industry misconduct, visit the CFPB's website.