Wisconsin Joins $80 Million Enforcement Action Against Block, Inc., Cash App for Bank Secrecy Act & Anti-Money Laundering Violations

MADISON, Wis. — The Wisconsin Department of Financial Institutions (DFI) today announced Wisconsin and 47 other 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 consumers in the United States use Cash App, Block’s mobile payment service, to spend, send, store, and invest money.

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, and 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.

“This multistate enforcement action and settlement is a testament to how states can work together and effectively protect consumers,” said DFI Secretary Cheryll Olson-Collins. “Compliance with the Bank Secrecy Act and Anti-Money Laundering laws is extremely important in the fight against criminal activity. The passage of the Money Transmission Modernization Act in Wisconsin and the coordination among states enabled us to participate in this swift, effective action.”

State regulators in Arkansas, California, Massachusetts, Florida, Maine, Texas, and Washington State led the multistate enforcement effort. Block cooperated with the states in the settlement.

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, and 99% of transmission activity through those firms is governed by the state-developed Money Transmission Modernization Act. 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 in this Conference of State Bank Supervisors (CSBS) article.

Wisconsin residents who have questions about this enforcement action should contact the DFI’s Licensed Financial Services Bureau by calling (608) 261-7578 or emailing DFI_LFS@dfi.wisconsin.gov. Residents can also visit NMLS^® Consumer Access to verify that a company is licensed to do business in Wisconsin, and they may also view past enforcement actions.

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.

NOTE: This press release was submitted to Urban Milwaukee and was not written by an Urban Milwaukee writer. While it is believed to be reliable, Urban Milwaukee does not guarantee its accuracy or completeness.