DCCA Joins $80M Multistate Settlement With Block Inc for BSA/AML Violations

Release: RELEASE: DCCA JOINS $80 MILLION ENFORCEMENT ACTION AGAINST BLOCK, INC.

January 16, 2025 at 1:12 pm

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January 16, 2024

HONOLULU — The Department of Commerce and Consumer Affairs (DCCA) 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, 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 will then have 12 months to correct any deficiencies found in the review after the report is filed.

“We are dedicated to protecting consumers and ensuring the integrity of the financial services offered in Hawai‘i,” stated Commissioner of Financial Institutions Dwight Young. “The collaboration between state regulators ensures that we remain vigilant to regulatory compliance matters while upholding the trust and confidence of consumers nationwide.”

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 (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.

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.

Hawai‘i residents who have questions about the enforcement action should contact the DCCA Division of Financial Institutions at 808-586-2820. Residents can also visit NMLS Consumer Access to verify that a company is licensed to do business in Hawai‘i and they may also view past enforcement actions.