CFPB Drops Lawsuit Against JPMorgan, BofA, and Wells Fargo Over Zelle Fraud

The Consumer Financial Protection Bureau (CFPB) has dismissed its lawsuit against JPMorgan Chase, Bank of America, and Wells Fargo, which accused the banks of allowing fraud to “fester” on the Zelle payments platform. The case, filed last year against the banks and Zelle operator Early Warning Services, was dropped with prejudice, preventing it from being reopened.

Zelle, launched in 2017, has over 150 million users and processed more than 1 trillion in transactions last year. However, the CFPB alleged that the banks failed to implement effective safeguards, leading to over 870 million in customer losses over seven years.

The dismissal follows the CFPB’s withdrawal of several lawsuits filed during President Biden’s term, including cases against Capital One and Solo Funds. President Trump recently fired CFPB Director Rohit Chopra, replacing him with acting Director Russell Vought.

The agency is also embroiled in a legal battle after a union sued to halt much of its activities under Vought’s orders.