Michigan Joins Multistate Enforcement Action Against Block, Inc.

Michigan joined 47 state financial regulatory agencies in a coordinated enforcement action against Block, Inc., for violations of the Bank Secrecy Act (BSA) and anti-money laundering (AML) laws that safeguard the financial system from illicit use. Michigan is set to receive approximately $1.6 million from the $80 million fine designated for enforcement purposes. More than 50 million consumers in the United States use Cash App, Block’s mobile payment service, to spend, send, store, and invest money.

“As mobile payment services have become more popular, state regulators must act to protect consumers in these new environments,” said DIFS Director Anita Fox. “DIFS is committed to working with state regulators nationwide to ensure that all financial systems are safe, sound, and entitled to the public trust.”

In the multistate settlement signed this month 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.

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.

Source: Michigan Department of Insurance and Financial Services

Topics Michigan