JPMorgan Chase & Co. JPM shares are trading lower premarket today. The bank disclosed that it is contemplating legal action against a U.S. consumer watchdog over the agency’s investigations into the Zelle payment app.
In its filing, the bank stated that it is addressing inquiries from the Consumer Financial Protection Bureau (CFPB) about fund transfers via the Zelle Network.
CFPB staff have indicated they can either seek a resolution or initiate enforcement action.
Related: JPMorgan, Other Banks Discuss Refunding Duped Zelle Customers: Report
The rise in fraud and scams on Zelle has attracted scrutiny from U.S. lawmakers, including Senator Elizabeth Warren, and regulators focused on consumer protection, reported Reuters.
As per the report, federal rules require banks to refund unauthorized payments, but some banks resist refunding payments when customers are deceived into authorizing them. JPMorgan CEO Jamie Dimon has argued that refunding such payments is unreasonable.
The report cited a bank spokesperson who said in a separate statement, “The CFPB is fully aware we already go above and beyond what the law requires, reimbursing for all unauthorized transactions and even for certain types of scams.”
Read: JPMorgan Unveils In-House Chatbot To Enhance Research Capabilities: Report
“The CFPB should expect to be challenged to ensure their actions stay within the bounds of the law.”
According to a U.S. Senate committee report, the percentage of consumers reimbursed for disputed fraud transactions fell to 38% in 2023 across JPMorgan, Bank of America Corporation BAC, and Wells Fargo & Company WFC (vs. 62% in 2019), which the report highlighted.
Also Read: JPMorgan Chase Enhances Card Perks: New Grocery Benefits with DoorDash Partnership
Investors can gain exposure to the JPM stock via IShares U.S. Financial Services ETF IYG and SPDR Select Sector Fund – Financial XLF.
Price Action: JPM shares are down 2.44% at $194.28 premarket at the last check Monday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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