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

LANSING -- 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 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.

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.

Michiganders who have questions about the enforcement action should contact DIFS-FIN-INFO@Michigan.gov. Residents can also visit NMLS Consumer Access to verify that a company is licensed to do business in Michigan, and they may also view past enforcement actions.

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.

The mission of the Michigan Department of Insurance and Financial Services is to ensure access to safe and secure insurance and financial services fundamental for the opportunity, security, and success of Michigan residents, while fostering economic growth and sustainability in both industries. In addition, the Department provides consumer protection, outreach, and financial literacy and education services to Michigan residents. For more information, visit Michigan.gov/DIFS or follow the Department on Facebook, X, or LinkedIn.

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