On December 20, 2024, the Consumer Financial Protection Bureau (CFPB) sued JPMorgan Chase, Bank of America, Wells Fargo and Early Warning Services, which operates the Zelle payment network. The CFPB alleged that the banks had failed to protect consumers from fraud on the platform. In March 2025, the agency dropped the case.
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The CFPB said the banks rushed Zelle to market to compete with payment apps such as Venmo and Cash App without adequate protections. It said customers of the three banks had lost more than $870 million to fraud since Zelle launched in 2017. The agency also alleged that many fraud complaints received little help, and that the banks did not properly investigate complaints or provide legally required reimbursements under the Electronic Fund Transfer Act and Regulation E.
The defendants’ response
JPMorgan and Bank of America said the suit was overreaching. Zelle’s operator said the lawsuit was “without merit, and legally and factually flawed.”
The outcome
On March 4, 2025, the CFPB filed a notice dismissing the case against all defendants with prejudice, meaning it cannot be refiled in the same form. The court dismissed the case on March 5, 2025. The dismissal came after the Trump administration took office and reduced the agency’s enforcement activity. The allegations were never tested in court.
Editor’s note: an earlier version of this article described the case as ongoing. It was dismissed in March 2025, and the article has been updated to reflect that.
Sources
- CFPB, enforcement action: Early Warning Services, LLC; Bank of America, N.A.; JPMorgan Chase Bank, N.A.; Wells Fargo Bank, N.A.: https://www.consumerfinance.gov/enforcement/actions/early-warning-services-llc-bank-of-america-na-jpmorgan-chase-bank-na-wells-fargo-bank-na/
- Engadget, CFPB drops Zelle lawsuit in latest reversal under Trump administration (March 2025): https://www.engadget.com/cybersecurity/cfpb-drops-zelle-lawsuit-in-latest-reversal-under-trump-administration-204639032.html
- InvestmentNews, Wall Street banks avoid court battle as toothless CFPB withdraws lawsuit (5 March 2025): https://www.investmentnews.com/regulation-legal-compliance/wall-street-banks-avoid-court-battle-as-toothless-cfpb-withdraws-lawsuit/259557
- Checkbook, Government lawsuit alleges three major US banks allowed fraud to fester on Zelle: https://www.checkbook.org/national/consumers-notebook/articles/Government-Lawsuit-Alleges-Three-Major-U-S-Banks-Allowed-Fraud-to-Fester-on-Zelle-7891