The Massachusetts Division of Banks (DOB), in a concerted effort with regulators from California, Minnesota, Nebraska, New York, and Texas, has announced a joint enforcement action against Wise US, Inc. for failing to fully conform to anti-money laundering and Bank Secrecy Act regulations. Wise US, Inc., a subsidiary of UK-based fintech firm Wise PLC, operates out of New York, facilitating money transmissions both domestically and internationally. The company has agreed to pay a $4.2 million penalty, which will be distributed among the states involved.
Wise is also mandated to address deficiencies within its compliance program, to retain independently a third party to verify these changes, and to turn in quarterly reports over the next two years to the regulatory bodies. These actions come as part of a broader initiative to tightly regulate and effortlessly ensure that financial service companies do not become conduits for unlawful activities such as money laundering or terrorism financing.
According to the Massachusetts Division of Banks, DOB Commissioner Mary L. Gallagher underscored the significance of such cooperative enforcement in a statement saying, "Results like this illustrate the power of collaboration and consistency. This week’s action is an example of state regulators acting quickly to ensure compliance and protect consumers by coordinating a multi-state enforcement action. By combining the states' collective enforcement power, states can come together to provide consumers nationwide with one common resolution." These remarks underline the regulators' intent to foster a climate of vigilance and partnership among states.
Furthermore, state regulators accused Wise of not adhering to mandatory due diligence practices, which include verifying customer identities and monitoring suspicious activity. Financial services businesses play a critical role in preventing the misuse of economic systems, effectively needing to observe and sometimes thwart efforts that could undermine legal and regulatory norms. The settlement with Wise follows on the heels of a prior multistate agreement with Block Inc., which also concerned lapses in anti-money laundering oversight.
The licensing and supervision of over 33,000 nonbank financial services across different states are conducted through the Networked Supervision of the Nationwide Multistate Licensing System (NMLS). Consumers continue to be urged to use resources like NMLS Consumer Access to verify the credentials of financial companies and review any past enforcement, ensuring that their transactions occur within the bounds of regulated, secure channels.
