The Department of Commerce and Consumer Affairs (DCCA), along with 47 state financial regulatory agencies, has taken action against Block, Inc. for violations related to the Bank Secrecy Act (BSA) and anti-money laundering (AML) laws. These laws are crucial for protecting the financial system from illicit activities. Block’s mobile payment service, Cash App, is used by over 50 million consumers in the United States.
As part of a multistate settlement reached this week, Block has agreed to pay an $80 million penalty to the state agencies involved. The company will also hire an independent consultant to evaluate its BSA/AML program’s effectiveness and submit a report within nine months. Following this, Block will have a year to address any identified deficiencies.
Commissioner of Financial Institutions Dwight Young stated, “We are dedicated to protecting consumers and ensuring the integrity of the financial services offered in Hawai‘i.” He emphasized that collaboration among state regulators is essential for maintaining regulatory compliance while upholding consumer trust nationwide.
State regulators from Arkansas, California, Massachusetts, Florida, Maine, Texas, and Washington led the enforcement effort. Block cooperated with these states during the settlement process.
Under BSA/AML regulations, financial services firms must conduct due diligence on customers by verifying identities, reporting suspicious activities, and applying controls for high-risk accounts. State regulators found that Block was not fully compliant with these requirements, which could potentially allow its services to be misused for money laundering or other illegal activities.
State financial regulators play a key role in licensing and supervising money transmitters through a strong national regulatory framework. They oversee more than 700 money transmitters under the Money Transmission Modernization Act (MTMA). This act governs 99% of transmission activity conducted by licensed firms. Regulators coordinate supervision of multistate firms and initiate enforcement actions when necessary through Networked Supervision. This approach ensures consistency while allowing individual states to take direct action as needed.
Additionally, state financial regulators license over 34,000 nonbank financial services companies via the Nationwide Multistate Licensing System (NMLS), covering mortgage companies, money services businesses, consumer finance providers, and debt collectors.
