CFPB Drops Zelle Fraud Lawsuit Against Major Banks

The Trump administration halts multiple consumer protection cases, raising concerns over regulatory rollbacks.

The Consumer Financial Protection Bureau (CFPB) dismissed its lawsuit against Zelle's operator, Early Warning Services, and three major banks: JPMorgan Chase, Bank of America, and Wells Fargo.
The lawsuit, filed under the Biden administration, alleged the banks failed to protect consumers from fraud on Zelle, leading to $870 million in reported losses since 2017.
The case was dismissed with prejudice, preventing the CFPB from refiling the claims or pursuing consumer compensation for fraud-related losses.
This marks one of several lawsuits dropped under Acting Director Russell Vought, who has significantly scaled back CFPB operations and halted its enforcement activities.
Critics argue the dismissals weaken consumer protections, while supporters claim the lawsuits were flawed and overreaching.