CFPB Drops Zelle Fraud Lawsuit Against Major US Banks

The dismissal, part of sweeping changes under the Trump administration, ends claims of inadequate fraud protections on the payment platform.

The Consumer Financial Protection Bureau (CFPB) has dismissed its lawsuit against Zelle operator Early Warning Services, as well as JPMorgan Chase, Bank of America, and Wells Fargo, with prejudice, preventing future claims on the matter.
The lawsuit, initiated under the Biden administration, alleged that the banks failed to safeguard Zelle users from fraud, resulting in over $870 million in losses since the platform’s 2017 launch.
The decision follows broader efforts by the Trump administration to curtail the CFPB’s activities, including mass layoffs, halted enforcement actions, and agency restructuring led by Acting Director Russell Vought.
Critics argue the dismissal leaves consumers vulnerable, while banks and Zelle representatives maintain the lawsuit was flawed and unnecessary.
The CFPB has also dropped several other high-profile cases in recent weeks, signaling a significant shift in federal regulatory priorities under the new administration.