The CFPB decides not to proceed with the lawsuit against Zelle and exonerates the banks.
The United States has decided to drop the lawsuit against JPMorgan Chase, Bank of America, and Wells Fargo for deficiencies in their fraud protection measures.
The Consumer Financial Protection Bureau (CFPB) has decided to dismiss a lawsuit against Early Warning Services, the company behind the Zelle payment platform, as well as the three banks that co-own this service. In its original complaint filed in December 2024, the CFPB argued that these entities had not effectively protected Zelle users from widespread fraud, which had resulted in accumulated losses of $870 million for customers of Bank of America, JPMorgan Chase, and Wells Fargo since the launch of Zelle in 2017.
The CFPB's decision to dismiss the case with prejudice means that these claims cannot be refiled. Eric Halperin, former chief of enforcement at the CFPB, noted that this means there is no possibility of recovering funds for consumer relief. Representatives from Zelle, JPMorgan, and the Consumer Bankers Association praised this resolution in statements to the media.
The administration of former President Donald Trump, including the Department of Government Efficiency (DOGE) led by Elon Musk, has strongly pushed to reduce the CFPB's activity. Since Trump's presidency began, the agency has taken only one enforcement action and, under the interim leadership of Russell Vought, has dropped several cases initiated by the agency's previous leader, Rohit Chopra. Currently, employees of the agency are in the midst of litigation to halt this situation, claiming they have been prevented from fulfilling their legal obligations, which include responding to urgent consumer complaints.
