District of Columbia Joins $80 Million Enforcement Action Against Block, Inc., Cash App for BSA/AML Violations

(Washington, DC) - The DC Department of Insurance, Securities and Banking (DISB) 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 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.

"In partnership with CSBS and other state financial regulators, DISB will continue to ensure that financial companies operating in the District follow our laws and treat District residents fairly," said DISB Commissioner Karima Woods. "Settlements like this one allow District residents to have greater confidence in the financial services sector."

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 (MTMA). 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.

District residents who have questions about the enforcement action should contact 202-727-8000. Residents should always check NMLS Consumer Access to verify that a company is licensed to do business in the District of Columbia.

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

About DISB
The mission of the Department of Insurance, Securities and Banking (DISB) is three-fold:
(1) cultivate a regulatory environment that protects consumers and attracts and retains financial
services firms to the District;
(2) empower and educate residents on financial matters; and
(3) provide financing for District small businesses.

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