03:40 PM EST, 12/04/2024 (MT Newswires) -- Canada's anti-money-laundering watchdog has signed a memorandum of understanding that allows it to share information with three U.S. regulators regarding Canadian banks with cross-border operations, The Globe and Mail newspaper is reporting Wednesday.

The MOU creates a framework for information sharing relating to the banks' supervisory, or compliance, activities between the Financial Transactions and Reports Analysis Centre of Canada (FinTRAC) and three U.S. banking regulators: the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation and the Federal Reserve.

"The co-operation and communication between the authorities will allow for each agency to effectively respond to emerging risks and enhance risk identification, prevention and detection, in an effort to mitigate money laundering/terrorist financing risk exposure," FinTRAC said in a post on the social media website X.

Discussions between the regulators have been ongoing for years, but the need for a more formal information sharing agreement crystalized with recent issues at Toronto-Dominion Bank ( MLWIQXX ), according to one person familiar with the discussions. The Globe is not identifying the source because they are not authorized to speak publicly about the matter.

Earlier this year, Canada's second-biggest bank became the first lender in U.S. history to plead guilty to conspiracy to commit money laundering after a decade of moving illicit funds for criminal organizations. TD has also plead guilty to failing to maintain an anti-money-laundering program that complies with U.S. federal regulations.

U.S. banking regulators and the Department of Justice have imposed more than US$3-billion in fines, as well as a host of non-monetary penalties, over gaps in the bank's anti-money-laundering controls.

(Market Chatter news is derived from conversations with market professionals globally, and/or from other media sources. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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