BISMARCK, N.D. – The North Dakota Department of Financial Institutions and 48 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.
“It is important for citizens to be able to have confidence in the financial services industry,” Department of Financial Institutions Commissioner Lise Kruse said. “Financial services companies must abide by North Dakota law, and I appreciate the work of my colleagues, the state regulators in Arkansas, California, Massachusetts, Florida, Maine, Texas and Washington state, who led this 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.
The Department of Financial Institutions licenses and supervises nearly 1,700 nonbank financial services companies, 183 of those being money transmitters.
North Dakota residents who have questions about the enforcement action should contact the Department of Financial Institutions at dfi@nd.gov or (701) 328-9933. Residents can also visit NMLS Consumer Access to verify that a company is licensed to do business in North Dakota.
A copy of the order can be found here: Order