Summary of proceeding #3

On October 17, 2024, the Toronto-Dominion Bank (TD or Bank) paid the $5.5 M penalty in the Notice of Violation issued by the Financial Consumer Agency of Canada (FCAC) on September 17, 2024. The Bank committed the violation of the cost of borrowing disclosure obligation in the Bank Act by failing to provide consumers of certain mortgage, home equity lines of credit, personal loans and small business loans (Loan Accounts) with accurate disclosure. This violation was committed from September 1, 2001 to February 22, 2024. During the period of the violation, 160,658 Loan Accounts were affected, representing a financial impact of over $12,165,433.57. Between March 18, 2025 and May 30, 2025, TD processed reimbursement to affected consumers, including a credit for redress interest.

The violation relates to an error in the Bank’s calculation of the principal and interest payment amounts following a request from certain customers for a change to their loan payment frequency. This error had the effect of extending the amortization for the loans subject to the payment frequency change. In general, an extension of the amortization period of a loan has financial implications that should be made clear to customers to ensure that they have the information they need to make an informed decision.

The penalty paid reflects that the Bank was negligent in failing to implement controls and effective compliance monitoring measures to prevent and detect the error for over 20 years. It also reflects that the degree of harm was very significant given the length of time of the violation, the number of customers affected and the financial impact. The Bank’s history of violations was also considered a factor.