CFPB drops lawsuit against Bank of America, JPMorgan Chase and Wells Fargo over Zelle fraud

Earlier DU thread: CFPB drops lawsuit against banks behind payment system Zelle - NBC News

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Source: Associated Press

CFPB drops lawsuit against Bank of America, JPMorgan Chase and Wells Fargo over Zelle fraud

By MICHELLE CHAPMAN
Updated 9:08 AM EST, March 5, 2025

The Consumer Financial Protection Bureau is dropping its lawsuit against the company that runs the Zelle payment platform and three U.S. banks as federal agencies continue to pull back on previous enforcement actions now that President Donald Trump is back in office.

In December a federal regulator sued JPMorgan Chase, Wells Fargo and Bank of America, claiming the banks failed to protect hundreds of thousands of consumers from rampant fraud on Zelle, in violation of consumer financial laws.

In the federal civil complaint, the CFPB asserted that the banks rushed to get the peer-to-peer payments platform to market without effective safeguards against fraud and then, after consumers complained about being defrauded on the service, largely denied them relief.

Early Warning Services, a fintech company based in Scottsdale, Arizona, that operates Zelle, was named as a defendant in the lawsuit. EWS is owned by seven U.S. banks, including JPMorgan, Wells Fargo and Bank of America. Those three banks are the largest financial institutions on the Zelle network, accounting for 73% of activity on Zelle in 2023.

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Read more: https://apnews.com/article/cfpb-zelle-trump-wells-fargo-jpmorgan-chase-c70332d2b16d733e9c4e72622d4c25f9