Washington DFI Jointly Leads $80 Million Multistate Enforcement Action Against Block, Inc., Cash App

Regulators take action in response to violations of Bank Secrecy Act and anti-money laundering laws safeguarding the financial system from illicit use

Just because a company develops a popular financial service.... it does not excuse the company from complying with all regulatory requirements, including laws in place to prevent money laundering.”

— DFI Director Charlie Clark

OLYMPIA, WA, UNITED STATES, January 15, 2025 /EINPresswire.com/ -- The Washington State Department of Financial Institutions (DFI) and 47 state financial regulatory agencies have taken coordinated action against Block, Inc., for violations of Bank Secrecy Act (BSA) and anti-money laundering (AML) laws that safeguard the financial system from illicit use.

More than 50 million people in the United

States use Cash App, Block’s mobile payment service, to spend, send, store, and invest money.

“Just because a company develops a popular financial service that customers want to use, it does not excuse the company from complying with all regulatory requirements, including laws in place to prevent money laundering,” DFI Director Charlie Clark said. “My team, in coordination with other state regulators, will hold companies like Block responsible when they have ignored existing law.”

In the multistate settlement signed this week, Block agreed to:
 Pay an $80 million penalty to the state agencies.
 Hire an independent consultant to review the comprehensiveness and effectiveness of its BSA/AML program.
 Submit a report to the states within nine months. Block then will have 12 months to correct any deficiencies found in the review after the report is filed.

The Washington DFI, along with state regulators in Arkansas, California, Florida, Maine, Massachusetts, and Texas, led the multistate enforcement effort.

Under BSA/AML rules, financial services firms are required to perform due diligence on customers, including verifying customer identities, reporting suspicious activity, and applying appropriate controls for high-risk accounts. State regulators found Block was not in compliance with certain requirements, creating the potential that its services could be used to support money laundering, terrorism financing, or other illegal activities.

Through a strong, nationwide regulatory framework, state financial regulators license and serve as the primary supervisor of money transmitters. States license more than 700 money transmitters. To protect consumers and enforce safety and soundness requirements, state regulators regularly coordinate supervision of multistate firms and, when necessary, initiate enforcement actions. This coordination – Networked Supervision – supports consistency and collaboration, while preserving the authority of individual states to take direct action. Additional information on the state regulatory framework for money transmission can be found here.

State financial regulators license and supervise more than 34,000 nonbank financial services companies through the Nationwide Multistate Licensing System (NMLS), including mortgage companies, money services businesses, consumer finance providers, and debt collectors.

Washington State residents who have questions about the enforcement action should contact Washington DFI at csenforcement@dfi.wa.gov or 360-902-8703. Residents can also visit NMLS Consumer Access to verify that a company is licensed to do business in Washington State and they may also view past enforcement actions. Additional enforcement action information is available on DFI’s website at Division of Consumer Services Enforcement Actions. If you live in Washington State and wish to file a complaint against one of DFI’s licensees, you may do so at https://dfi.wa.gov/complaint-form.