CFPB drops lawsuit against Bank of America, JPMorgan Chase and Wells
Fargo over Zelle fraud
[March 06, 2025] By
MICHELLE CHAPMAN
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.
But a filing in the U.S. District Court for the District of Arizona on
Tuesday indicated that the CFPB was dismissing its lawsuit against EWS,
Bank of America, JPMorgan Chase and Wells Fargo with prejudice.
The dismissal comes less than a week after the CFPB dropped several
enforcement actions against companies like Capital One and Rocket Homes.
In notices of voluntary dismissals that were filed, the CFPB dropped
lawsuits it had brought against Capital One, Rocket Homes, Vanderbilt
Mortgage and Finance, owned by Warren Buffett’s Berkshire Hathaway, and
others.
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Options to use the Zelle payments network are seen on a mobile
banking app in New York on Friday, Dec. 20, 2024. (AP Photo/Patrick
Sison, File)
Those suits were all filed under the agency’s previous director, Rohit
Chopra, who Trump fired just weeks ago. The CPFB has since plunged into
turmoil — with the White House later ordering it to halt nearly all its
work. The administration also closed the agency’s headquarters and moved
to fire scores of its workers.
Trump has defended his administration’s broadside against the CFPB —
including recent claims about the agency being “set up to destroy
people.” But supporters of the agency stress that it provides crucial
oversight and protects consumers from being vulnerable to predatory
business practices.
The CPFB isn’t the only federal agency to signal a pullback on previous
enforcement action under the new administration. The U.S. Securities and
Exchange Commission has either closed or paused legal action against
several cryptocurrency platforms in recent weeks, as the regulator tries
to present itself as more crypto-friendly under Trump.
Last month Binance and the SEC filed a joint motion to pause its
high-profile lawsuit against the crypto exchange. The SEC filed a
similar joint motion with Coinbase. In addition, Robinhood has said that
the case against it has been closed.
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