The US Consumer Financial Protection Bureau (CFPB) has dismissed a lawsuit filed against three of the nation’s largest banks over alleged inadequate safeguards on their Zelle money transfer network. The agency had claimed that scammers could steal hundreds of millions of dollars from customers due to weak security measures.
The CFPB, led by Rohit Chopra, sued Early Warning Services (the operator of Zelle) and three banks – Bank of America, JPMorgan Chase, and Wells Fargo – for failing to protect their customers. However, with President Trump’s sudden departure as director, many experts expected the case to be dropped.
The CFPB stated that Zelle is vulnerable to fraud due to its design, allowing scammers to quickly transfer funds while making it difficult for victims to retrieve their money. However, banks argue they have no responsibility for reimbursing customers who made unauthorized transactions themselves.
A representative for Early Warning Services described the lawsuit as “without merit” and “legally flawed.” JPMorgan Chase spokesperson Trish Wexler echoed this sentiment, stating that payments app fraud is a national security problem that requires collective efforts from all sectors. The CFPB did not comment on the dismissal or explain why they dropped the case.
This decision comes amidst recent dismissals of several enforcement actions by the CFPB, including cases against Capital One and a mortgage firm. The agency’s staff union has filed lawsuits to reverse the new leadership’s order for employees to halt all work, but will continue pursuing claims against debt settlement companies like Buffalo Debt Settlement Company and online lender MoneyLion.
Source: https://www.nytimes.com/2025/03/04/business/zelle-scams-cfpb-lawsuit.html