CFPB Drops Zelle Fraud Reimbursement Case Against JPMorgan, Wells Fargo

The Consumer Financial Protection Bureau dropped its lawsuit against JPMorgan Chase & Co JPM, Wells Fargo & Co WFC and Bank of America Corp BAC on Tuesday concerning the banks’ alleged failure to prevent fraud on Zelle. The Trump Administration has wound down CFPB cases in recent weeks.

What Happened: The agency dismissed its case against the banks and Early Warning Services, Zelle’s parent company, CNBC reports. The lawsuit was originally brought in December during the Biden Administration.

The lawsuit alleged that banks did not do enough to protect and reimburse consumers from fraud on Zelle. The defendants allegedly rushed to launch Zelle without implementing sufficient anti-fraud protections. Because the cases were dismissed with prejudice, the agency will not bring similar charges against the banks again.

The CFPB’s December filing said that 210,000 Bank of America customers experienced over $290 million in collective losses, 420,000 Chase customers lost over $360 million and 280,000 Wells Fargo customers were defrauded of over $220 million since 2017.

Zelle told Benzinga in December that the case was “legally and factually flawed” and politically motivated.

Reactions: The Trump administration has ended several consumer protection cases in recent weeks. Elon Musk, senior advisor to Trump, previously said he’d like to “delete” the CFPB.

The CFPB’s mission is to “protect consumers from unfair, deceptive, or abusive practices and take action against companies that break the law.”

Political figures reacted to the cases dropped by the agency.

“The CFPB makes up just 0.01% of the federal budget, yet it has returned $21 BILLION to American taxpayers,” Congressman Bill Foster (D-IL) said. “Still, Trump & Musk want to shut it down and make it easier for scammers to rip you off.”

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