SACRAMENTO — The California Department of Financial Protection and Innovation (DFPI) 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 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 a $80 million penalty to the state agencies, including a $1.9 million payment to California; 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.
The DFPI, along with state regulators in Arkansas, Massachusetts, Florida, Maine, Texas, and Washington, led the multistate enforcement effort. Block cooperated with 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.
State financial regulators license and supervise more than 33,000 nonbank financial services companies through the Nationwide Multistate Licensing System (NMLS). Consumers can visit NMLS Consumer Access to verify that a company is licensed and to view past enforcement actions. Complaints by California residents may be submitted directly with the DFPI online (dfpi.ca.gov/submit-a-complaint) or call toll-free at (866) 275-2677.
About DFPI
The California Department of Financial Protection and Innovation (DFPI) protects consumers, regulates financial services, and fosters responsible innovation. The DFPI protects consumers by establishing and enforcing financial regulations that promote transparency and accountability. We empower all Californians to access a fair and equitable financial marketplace through education and preventing potential risks, fraud, and abuse. Learn more at dfpi.ca.gov.