Federal regulatory body CFPB imposes a penalty of $2.5 million on Wise for breaching remittance regulations
Wise Faces $4.2 Million Settlement over Alleged Remittance Practices and Compliance Issues
In a significant development, the Consumer Financial Protection Bureau (CFPB) has ordered money transfer platform Wise to pay a penalty of nearly $2.5 million related to alleged illegal remittance practices and deficiencies in anti-money laundering (AML) and countering the financing of terrorism (CFT) compliance.
The order, issued in January 2025 under then-Director Rohit Chopra during the Biden administration, required Wise to pay a total of approximately $4.2 million as part of a settlement with six states (California, Minnesota, Nebraska, New York, Texas, and Massachusetts) to resolve regulatory deficiencies concerning AML programs and compliance with remittance laws.
The enforcement action necessitates Wise to enhance its AML oversight, invest in compliance controls, and file quarterly reports with the states for two years. Each state involved is set to receive about $700,000 under the agreement.
The settlement covers several allegations, including Wise's failure to properly disclose multiple fees, such as credit card funding fees via Apple Pay or Google Pay, exchange rates, required refunds for delayed transfers, and other mandatory disclosures. The CFPB also claimed that Wise violated the Consumer Financial Protection Act of 2010 by misleading customers about ATM fees, free withdrawals, and other customer perks.
Wise, a wholly owned subsidiary of Wise PLC, headquartered in New York and serving over 3 million customers nationwide, has cooperated with the CFPB to address these identified issues, resolving most of them by November 2022.
Since the order was announced, Rohit Chopra has been replaced by Treasury Secretary Scott Bessent as the agency's acting director. It is unclear whether the change in CFPB leadership has materially affected Wise’s penalty or enforcement terms, as no explicit information from the search results suggests as much.
The CFPB did not respond to a request for comment. Meanwhile, Wise has been embroiled in other controversies, such as a data breach incident affecting its customers through Evolve Bank & Trust and a dispute with Evolve that led to the termination of their partnership in 2023. European regulators also compelled Wise to devise a formal plan to rectify the issue of the lack of proof of address for several of its customers in 2022.
Despite these challenges, Wise continues to allow customers to send, receive, and store remittances through a mobile app, prepaid accounts, and debit cards. The company's commitment to resolving the issues raised by the CFPB and continuing to serve its customers remains a key focus.
Fintech companies in the industry are expected to invest more in their compliance controls to prevent allegations similar to Wise's, which faced deficiencies in anti-money laundering and countering the financing of terrorism practices. In the business world, technology has become essential for fintech companies like Wise to improve their AML oversight and remain compliant with financial regulations.