


The operator of the payment network Zelle and the three companies that are primarily involved in the service saw the Consumer Financial Protection Bureau drop their fraud lawsuit against them on Tuesday.
Early Warning Services, the owner of Zelle, JPMorgan Chase, Bank of America, and Wells Fargo were sued by former President Joe Biden’s CFPB for allegedly failing to properly investigate fraud complaints or give victims their proper reimbursement.
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The case was dismissed “with prejudice,” meaning it cannot be brought again, the CFPB said in a filing.
Defendants involved in the lawsuit took a victory lap after the dismissal.
A spokeswoman for Zelle said it welcomed the dismissal and that the CFPB lawsuit was “legally and factually flawed.”
A JPMorgan spokeswoman added that while “banks play a crucial role in scam prevention and consumer education … this is a national security problem that requires a collective effort across the public and private sectors.”
CFPB acting Director Russell Vought, who is also director of the Office of Management and Budget, told the CFPB to stop work in early February and said it would “not be taking its next draw of unappropriated funding” from the Federal Reserve. Reports indicated Vought wanted to reduce the agency to “five men and a phone.”
Since then, the agency has dropped several major lawsuits against companies. Last week, the CFPB halted its litigation against Capital One for allegedly failing to pay more than $2 billion in interest to customers and misleading them into thinking they would get better rates.
The CFPB also dropped cases against Rocket Homes, a student loan servicer, and Berkshire Hathaway-owned Vanderbilt Mortgage & Finance.
The agency has faced an internal battle as a union of employees sued to halt mass firings by the Department of Government Efficiency.
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Vought has pushed back against the idea that the agency will be vastly reduced or eliminated.
“The predicate to running a ‘more streamlined and efficient bureau’ is that there will continue to be a CFPB,” he wrote in a legal filing.