On March 5, the Consumer Financial Protection Bureau (CFPB), led by Russell Vought, dropped its lawsuit against Early Warning Services, which operates Zelle, and is owned by large banks such as JPMorgan, Wells Fargo, and Bank of America. Those three were also being sued by the CFPB. They account for 73% of activity on Zelle as of 2023.
The lawsuit was initiated in December 2024 when JPMorgan Chase, Wells Fargo, and Bank of America failed to “protect hundreds of thousands of consumers from rampant fraud on Zelle, in violation of consumer financial laws.” The banks rushed to get Zelle to market without implementing safeguards against fraud. The victims of the fraud were largely denied relief.
No reason was given for this legal action, which was dropped with prejudice.
