The Conference of State bank Supervisors (CSBS) announced that 48 state financial regulators took enforcement action against Block, Inc., for BSA/AML violations.
CSBS said that Block violated the Bank Secrecy Act (BSA) and anti-money laundering (AML) laws that safeguard the financial system from illicit use. The 48 state regulators imposed an $80 million fine and are requiring Block to undertake corrective action for the violations.
Block agreed to pay the assessed 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. After that, Block will have 12 months to correct any deficiencies found in the review after the report is filed.
Regulators in Arkansas, California, Massachusetts, Florida, Maine, Texas, and Washington State led the 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. This includes verifying customer identities, reporting suspicious activity, and applying appropriate controls for high-risk accounts. Block was not in compliance with certain requirements, state regulators found. This created the potential that its services could be used to support money laundering, terrorism financing, or other illegal activities.
State financial regulators license and supervise more than 34,000 nonbank financial services companies through the Nationwide Multistate Licensing System. This includes mortgage companies, money services businesses, consumer finance providers, and debt collectors.