CFPB drops lawsuit against JPMorgan Chase, Bank of America and Wells Fargo over Zelle fraud

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The Consumer Financial Protection Bureau on Tuesday dismissed its lawsuit against the operator of the Zelle payments network and the three U.S. banks that dominate transactions on it.

The CFPB sued Early Warning Services, which runs the peer-to-peer payments network, as well as JPMorgan Chase, Bank of America and Wells Fargo in December, alleging that the firms failed to properly investigate fraud complaints or give victims reimbursement.

The CFPB «dismisses this action against Defendants Early Warning Services, LLC, Bank of America, N.A., JPMorgan Chase Bank, N.A., and Wells Fargo Bank, N.A., with prejudice,» the regulator said in its filing.

Since Acting Director Russell Vought has taken over the CFPB, the agency has dropped at least a half dozen cases brought by his predecessor, Rohit Chopra.

The CFPB said customers of the three banks have lost more than $870 million since the launch of Zelle in 2017. The service was launched to provide bank customers an alternative to peer-to-peer platforms including PayPal. Last year Zelle crossed $1 trillion in total volumes, which it said was the most ever for a peer-to-peer platform.

This story is developing. Please check back for updates.