The Financial Consumer Agency of Canada said Toronto-Dominion Bank has paid a $5.5 million administrative monetary penalty after FCAC found the bank failed to give accurate cost of borrowing information on certain loans for more than two decades.
The violation is detailed in FCAC’s Summary of Proceeding #3, which notes that errors tied to customer requests to change payment frequency led to extended amortization periods that were not properly disclosed to borrowers, TD has paid the penalty, according to the agency.
FCAC said the problem spanned from September 1, 2001 to February 22, 2024 and touched 160,658 loan accounts across products including mortgages, home equity lines of credit, personal loans and small business loans.
The agency estimated the financial impact at more than $12.16 million. TD processed reimbursements and interest credits to affected customers between March 18 and May 30, 2025, FCAC said.
The watchdog added that accurate disclosure under the Bank Act is essential for allowing consumers to make informed decisions and emphasized that federally regulated institutions should review published enforcement outcomes and apply lessons to their own controls.
When a borrower switches how often they make payments, lenders must recalculate principal and interest correctly and clearly explain any change in the total borrowing cost and timeline.
If the amortization stretches out quietly, borrowers can end up paying more interest over the life of the loan than they expected.
The penalty itself is modest against TD’s balance sheet, but the episode highlights the compliance risks that can emerge from legacy systems and long-running processes.
It also arrives as Canadian regulators continue to lean on administrative penalties to shape behavior across the financial sector.
Earlier actions include FINTRAC’s move against a large crypto exchange, where the agency said FINTRAC imposes a C$19.6M administrative monetary penalty on KuCoin’s operator, a reminder that enforcement pressure now touches banks and non-banks alike.
Deposit insurer CDIC has been updating parts of its rulebook and outreach, including consultations on disclosure and information standards, another sign that expectations around transparency are tightening. See CDIC asks stakeholders to comment for context on how requirements are evolving.
