The New Mexico Financial Institutions Division, along with 47 other state financial regulatory agencies, has taken action against Block, Inc. and its mobile payment service, Cash App. The enforcement addresses violations of the Bank Secrecy Act (BSA) and anti-money laundering (AML) laws designed to protect the financial system from illegal use.
Cash App is used by over 50 million consumers in the United States for various financial activities such as spending, sending, storing, and investing money.
As part of a multistate settlement reached this week, Block, Inc. has agreed to pay an $80 million penalty to the involved state agencies. The company will also hire an independent consultant to assess its BSA/AML programs' effectiveness and comprehensiveness. A report is to be submitted within nine months of this review. Following the report's filing, Block will have 12 months to address any identified deficiencies.
State regulators from Arkansas, California, Massachusetts, Florida, Maine, Texas, and Washington spearheaded the enforcement effort. Block cooperated with these states in reaching the settlement.
Mark Sadowski, Director of the New Mexico Financial Institutions Division stated: “Today’s action against Block, Inc. demonstrates the power and effectiveness of networked state supervision in the licensing, regulation, and examination of non-bank money transmitters.” He emphasized that strong anti-money laundering programs are essential for both banks and non-bank entities to protect consumers and prevent financial crimes.
Financial services firms are required under BSA/AML rules to conduct due diligence on customers by verifying identities and reporting suspicious activities among other controls for high-risk accounts. State regulators found that Block was not complying with some requirements which could potentially allow its services to support money laundering or other illicit activities.
More than 34,000 nonbank financial services companies are licensed and supervised by state financial regulators through the Nationwide Multistate Licensing System (NMLS), covering mortgage companies as well as money services businesses among others.
Residents can verify company licenses through NMLS Consumer Access and view past enforcement actions if needed.
New Mexico residents with questions about this settlement can contact:
New Mexico Financial Institutions Division
Call: 505-476-4885
Visit online: www.rld.nm.gov/financial-institutions
