North Dakota DFI: Block Inc. Fined $80M for BSA/AML Violations

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. Washington, D.C .— The North Dakota Department of Financial Institutions and 52 state financial regulatory agencies have taken coordinated action against mortgage company Bayview Asset Management LLC, and three of its affiliates, Lakeview Loan Servicing, Community Loan Servicing, and Pingora Holdings (collectively the Bayview Companies), for deficient cybersecurity practices and for not fully cooperating with state regulators following a data breach that impacted 5.8 million customers. The fine and corrective plan underscore the importance of meeting state requirements to protect consumer data and complying with state supervisory demands. State regulators in California, Maryland, North Carolina, and Washington State led the multistate effort, which found that Bayview Companies’ information technology and cybersecurity practices did not meet federal or state requirements. Furthermore, the Bayview Companies delayed the supervisory process by failing to comply with state requests in a timely and complete manner in the early stages of the examination. In addition to the monetary penalty, the Bayview Companies have agreed to take specified corrective actions, improve cybersecurity programs, undergo independent assessments, and provide three years of additional reporting to the states. State financial regulators license and supervise more than 33,000 nonbank financial services companies through the Nationwide Multistate Licensing System (NMLS), including mortgage companies, money services businesses, consumer finance providers, and debt collectors. North Dakota residents who have questions about the enforcement action should the Department at (701) 328-9933. Residents can also visit NMLS Consumer Access to verify that a company is licensed to do business in North Dakota, and they may also view past enforcement actions. The Commissioner of the North Dakota Department of Finan