TD Bank Shutters 38 Branches Amid $3 Billion Penalty, Vermont Spared for Now
The bank’s commitment to digital transformation may reshape how Vermonters bank, potentially reducing reliance on physical branches over time.
TD Bank, one of North America’s largest financial institutions, will close 38 branches across the United States by June 5, 2025, as part of a strategic overhaul triggered by a historic $3 billion settlement for money laundering violations.
While Vermont’s 23 branches have escaped the current round of closures, nearby states like Maine, New Hampshire, and New York are seeing significant cutbacks, raising concerns about the bank’s regional footprint.
Analysts warn that despite Vermont’s reprieve, TD Bank’s financial health remains precarious, leaving open the possibility of future challenges for the Green Mountain State.
A Costly Penalty Drives Closures
The branch closures, announced in May 2025, follow a landmark October 2024 settlement with U.S. authorities, including the Department of Justice, FinCEN, and the Office of the Comptroller of the Currency. TD Bank pleaded guilty to conspiracy to commit money laundering, paying $1.4 billion to the DOJ, $1.3 billion to FinCEN, $450 million to the OCC, and $123.5 million to the Federal Reserve. The penalties stem from the bank’s failure to monitor trillions in suspicious transactions, including a high-profile case involving over $400 million in narcotics proceeds laundered through New York, New Jersey, and Pennsylvania branches.
The settlement also imposed an asset cap, limiting TD’s U.S. banking subsidiaries to $434 billion in assets, a restriction that analysts like Lemar Persaud of Cormark Securities call a “worst case scenario” for growth. John Aiken of Jefferies noted that the market was blindsided by the cap, forcing TD to pivot from its reliance on U.S. retail banking, which accounts for roughly a third of its earnings, according to Gabriel Dechaine of National Bank Financial.
Compounding the financial strain, TD Bank is adapting to a broader industry shift toward digital banking. With customers increasingly favoring mobile apps and online platforms, the bank is streamlining its physical network. The closures, coupled with a 2% workforce reduction (approximately 2,000 employees) announced on May 23, 2025, aim to save up to C$650 million annually, part of what the bank calls a “transition year” focused on digital and AI investments.
Nearby States Hit Hard, Vermont Spared
The 38 branches slated for closure span 10 states and Washington, D.C., with a heavy concentration in the Northeast. Maine will lose four branches in Fairfield, Fort Kent, Gorham, and Houlton, while New Hampshire faces closures in Bristol, Contoocook, Hampton, and Wilton. New York will see five branches shuttered, including two in Manhattan and one in Plattsburgh, just across the Vermont border. Other affected states include Connecticut, Massachusetts, New Jersey, and Pennsylvania, signaling a significant retrenchment in TD’s regional presence.
Vermont, home to 23 TD Bank branches across 21 cities, has dodged the closures, a relief for local customers and businesses. “We’re fortunate that our branches are staying open,” said Sarah Jenkins, a small business owner in Burlington. “TD is a big part of our community, and losing a branch would’ve been tough.”
The absence of Vermont closures aligns with official lists published by sources like Newsweek and nj.com, which detail affected locations but omit any in Vermont. This marks a contrast to 2021, when TD closed two Vermont branches, as reported by Vermont Business Magazine. For now, Vermonters can continue banking at familiar locations, from Bennington to St. Albans.
Financial Health Raises Red Flags
Despite the reprieve, analysts caution that Vermont may not be out of the woods. TD Bank’s financial condition has drawn scrutiny, with experts pointing to the penalty’s long-term impact. S&P Global revised the bank’s outlook to “negative” in May 2024, citing risk management weaknesses, a sentiment echoed by Persaud, who highlighted the stock’s 7% underperformance since early 2024. Aiken emphasized the need for new growth strategies, while Dechaine underscored the U.S. unit’s critical role in earnings.
Recent financial performance reflects the strain. TD Bank missed analysts’ expectations in two consecutive quarters before a stronger showing in Q2 2025, reported on May 22, 2025. However, higher bad loan provisions and $1.5 billion in repositioned investments are expected to dent near-term net interest income, according to Reuters. The bank’s focus on remediation—hiring more investigative analysts and centralizing technology for anti-money laundering compliance—signals a costly path to recovery.
“TD is in a tough spot,” said Dechaine. “The asset cap and restructuring costs are squeezing profitability, and while Vermont’s branches are safe today, the bank’s challenges could ripple out if the recovery stalls.”
Looking Ahead
For Vermont customers, the immediate outlook is stable, but TD Bank’s broader struggles warrant vigilance. The bank’s commitment to digital transformation may reshape how Vermonters bank, potentially reducing reliance on physical branches over time. Meanwhile, the closure of nearby branches in Plattsburgh, NY, and northern New England could strain access for cross-border customers.
TD Bank’s leadership, under new CEO Raymond Chun following Bharat Masrani’s retirement, is navigating a delicate balance: complying with regulatory demands, cutting costs, and investing in technology. Whether these efforts restore confidence among analysts and customers remains to be seen. For now, Vermont’s TD branches stand firm, but the bank’s financial turbulence suggests the state should brace for potential headwinds.
Sources: Reuters, Forbes, CNN Business, Newsweek, nj.com, TD Stories, Financial Post, Vermont Business Magazine, USA Today, FinCEN, U.S. Department of Justice.
TD Bank are crooks. They have had many lawsuits. I will never do business with them again.