The Consumer Financial Protection Bureau today dismissed its lawsuit against the operator of Zelle and several participating banks for allegedly failing to take steps to protect consumers from fraud on the payments network.
In a lawsuit filed during the final weeks of the Biden administration, the CFPB alleged that Zelle’s identity verification methods led bad actors to target network users, that it was too slow to restrict and track criminals that exploited multiple network accounts, and that it ignored fraud complaints. The American Bankers Association was among the groups critical of the CFPB’s legal action, with ABA President and CEO Rob Nichols saying that the bureau has devoted its considerable resources to attacking banks rather than protecting consumers from bad actors.
Since then, the Trump administration has paused most CFPB activities and pledged to ease regulatory burdens on businesses. The bureau filed a motion in U.S. District Court for Arizona dismissing the case. The lawsuit is one of many legal actions taken under former CFPB Director Rohit Chopra that the bureau’s new leadership has reversed.
