The US Consumer Financial Protection Bureau (CFPB) has reportedly notified a federal court in Arizona that it is dismissing the lawsuit lodged in December against three banks over their management of the Zelle payment service.
The agency, currently facing existential threat during the current Trump administration, had accused JPMorgan Chase, Bank of America, and Wells Fargo of failing to shield consumers from fraud, resulting in losses of hundreds of millions.
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Early Warning Services (EWS) operates Zelle, a peer-to-peer payments network.
The CFPB accused EWS and the three banks of pushing Zelle to market to compete with Venmo and Cash App, without adequate user protection, reported Reuters.
It stated that hundreds of thousands of consumers filed fraud complaints but were mostly refused help, with some told to ask the alleged fraudsters for their reimbursement, stated the news agency.
JPMorgan emphasised that combating fraud requires collaboration between the public and private sectors, and expressed its eagerness to work with others “to effectively address these crimes at their source.”
Recently, the agency has ditched seven enforcement cases initiated under former President Joe Biden, including those against Capital One and TransUnion.
Despite Trump’s calls for the CFPB’s shutdown, agency officials and government lawyers have argued in court that the administration plans to run a “streamlined” CFPB in accordance with its legal duties, highlighted Reuters.
