The Consumer Financial Protection Bureau (CFPB) has dismissed a lawsuit against several major banks, including JPMorgan Chase & Co., Bank of America Corp., and Wells Fargo & Co., alleging that they rushed out a peer-to-peer payment network that allowed fraud to proliferate. The agency dropped the case with prejudice, meaning it cannot be reopened.
The lawsuit claimed that the banks’ lack of safeguards created an “easy target” for fraudsters, leaving victims to fend for themselves. However, the banks disputed the allegations and said they disagreed with the CFPB’s action at the time.
Zelle, a consumer payment network owned by several major banks, welcomed the decision, stating that the lawsuit was without merit and factually flawed. This is not the first time the CFPB has dropped a lawsuit against a financial services company during President Joe Biden’s term, with similar cases against Capital One Financial Corp., Rocket Cos., and SoLo Funds also being dropped last month.
The change in enforcement approach comes ahead of President Donald Trump’s pick to lead the agency being confirmed. Jonathan McKernan, who previously served on the Federal Deposit Insurance Corp. board, has expressed his intention to follow the CFPB’s statutory obligations, including enforcing consumer protection laws.
Source: https://finance.yahoo.com/news/cfpb-drops-lawsuit-against-us-181011101.html