TD Bank Closes 38 Branches Following Money Laundering Scandal

ByMoneyReign

TD Bank is shuttering 38 branches across 10 states as the financial institution continues to grapple with the aftermath of a historic $3.2 billion fine for money laundering violations. The closures, scheduled for June 5, are raising concerns about access to banking services in affected communities and potential job losses for branch employees.

The bank, America’s seventh largest by branch count and tenth by assets under management, has filed closure notices with the Office of the Comptroller of the Currency (OCC) for locations spanning the Eastern Seaboard. According to Daily Mail, the closures are part of TD Bank’s cost-cutting measures following last year’s unprecedented legal settlement.

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Locations Affected by the Closures

The closures will impact branches in Connecticut, Florida, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, South Carolina, and Virginia, plus one location in Washington, D.C. New Jersey and Massachusetts will each lose six branches, New York will lose five, while Maine and New Hampshire will each see four locations close.

In the New York metropolitan area, PIX11 reports that nearly a dozen locations will close, including two in Manhattan at 125 Park Avenue and 451 Lexington Avenue. Additional New York closures include branches in Greenlawn (Suffolk County), Middletown (Orange County), and Plattsburgh (Clinton County).

New Jersey customers will lose access to branches in Cedar Grove, Flemington, Holmdel, Marlton, Ringwood, and Spring Lake Heights. These closures span multiple counties, including Essex, Hunterdon, Monmouth, Burlington, and Passaic, potentially creating significant coverage gaps in certain areas.

Fallout from Money Laundering Scandal

The branch closures come in the wake of TD Bank’s guilty plea to violating federal anti-money laundering laws, making it the largest bank in U.S. history to admit to such charges. The investigation revealed systemic failures in the bank’s compliance efforts that allowed criminals to launder millions in proceeds from fentanyl and narcotics trafficking.

More troubling, authorities found evidence that drug traffickers had bribed TD employees at some U.S. branches to facilitate their illegal activities. The $3.2 billion penalty imposed last October was accompanied by unprecedented restrictions, including a cap on the bank’s assets and other business limitations that have forced TD to reconsider its expansion plans.

“The bank has been in cost-cutting mode since an investigation into its anti-money laundering compliance efforts ended in October with a $3.2 billion fine,” reports the Daily Mail, citing information from The Philadelphia Business Journal. The plea deal’s restrictions have also forced TD to slow previously announced plans to open 150 new branches by 2027.

Leadership Changes and Corporate Response

In February, TD brought in former chief operating officer Raymond Chun as its new chief executive officer, replacing Bharat Masrani as part of the leadership shakeup following the scandal. According to AS.com, the bank has been “shaking up its leadership” while dealing with the fallout from the money laundering case.

When questioned about whether the branch closures were directly related to cost-cutting measures stemming from the fine, TD Bank provided a carefully worded statement that avoided addressing the question directly. Instead, the bank stated it “regularly evaluates its physical store network and looks for opportunities to better align our network of stores to best serve our customers.”

TD Bank spokesperson told Banking Dive that the closures are simply “business-as-usual reviews” despite their proximity to the legal troubles and leadership changes. “We are committed to making this transition as smooth as possible for our impacted customers and colleagues,” the spokesperson added.

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Part of a Broader Industry Trend

While TD Bank’s closure announcements come amid its specific legal troubles, they also reflect an accelerating industry-wide trend. Earlier this year, major U.S. banks shut more than 100 locations in just three weeks, with experts warning that 2025 could see record numbers of branch closures nationwide.

A study from Self Financial cited by Daily Mail predicts a further 4.11 percent decrease in bank branches by year’s end, continuing the trend that saw 1,043 branches close in 2024. “Retail bank closures in the US aren’t slowing, and in fact our research shows that the last time this many people relied on a local bank branch was in 1995,” said Darren Kingman from Root Digital.

This shift comes despite survey data suggesting that 45 percent of Americans still prefer to conduct their banking in person. A GoBankingRates survey found that more than half of Americans are concerned about the rising number of physical branch closures, and 76 percent believe the current banking system needs changes.

For communities losing their TD Bank branches, the closures represent not just an inconvenience but potentially significant gaps in banking access, particularly for elderly customers, small businesses that rely on cash transactions, and those with limited digital literacy or technology access.

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