Toronto-Dominion Bank’s chief compliance officer, Monica Kowal, has left the company at a critical time. The departure comes as Canada’s second-largest bank works to address deficiencies in its anti-money-laundering (AML) program amidst investigations by US regulators and law enforcement.
The Globe and Mail reported in May that Monica Kowal, then TD’s senior vice-president and chief compliance officer, was helping oversee the bank’s efforts to fix its regulatory compliance management (RCM) program. This effort followed an investigation by the Office of the Superintendent of Financial Institutions (OSFI), Canada’s banking regulator, which ordered TD to address shortcomings in its RCM framework.
Kowal’s departure was announced in an internal memo dated June 28 and viewed by The Globe. Ajai Bambawale, TD’s chief risk officer, acknowledged her significant contributions to the bank’s regulatory compliance strategies. The memo did not provide a reason for Kowal’s departure, and TD declined to comment further on the matter.
To fill the vacancy, TD has appointed Erin Morrow, the deputy chief compliance officer, as Kowal’s successor. Morrow joined TD in January from Citibank, where she spent over a decade in compliance and auditing roles. Prior to Citibank, she worked at Grant Thornton LLP as principal of business advisory services.
According to the internal memo, Morrow brings over 20 years of experience in compliance, audit, and risk management. Bambawale praised Morrow’s impact within the compliance organization and her role in building the compliance transformation team.
Kowal, a lawyer and former regulator, joined TD over six years ago and was appointed senior vice-president and chief compliance officer in November 2022. Before her tenure at TD, she served at the Ontario Securities Commission, including a stint as vice-chair from 2014 to 2017. Kowal was working on the RCM remediation program with two vice-presidents of compliance, Denise Morris and Emily Jelich. Jelich retired from TD at the end of June.
In May, The Globe reported that OSFI identified gaps in TD’s RCM program during a recent assessment. The RCM framework is essential for managing the various laws and regulations governing a bank’s operations in Canada, the US, and other countries. Effective RCM programs are vital for banks to manage regulatory compliance risks, including AML.
The Globe noted that TD Bank has been under prolonged scrutiny by US regulators and the Department of Justice for weaknesses in its AML procedures. Analysts estimate potential penalties could reach up to US$4 billion. There are also concerns that US regulators might impose restrictions on TD’s ability to expand in its key growth market.
As TD continues to address these regulatory challenges, Morrow’s leadership will be critical in steering the bank through its compliance transformation and ensuring robust AML controls.
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