The Consumer Financial Protection Bureau (CFPB) has dropped its lawsuit against Zelle and three major banks, including Bank of America, JPMorgan Chase, and Wells Fargo, who were accused of failing to protect consumers from significant fraud. The lawsuit stemmed from complaints that customers lost over $870 million due to inadequate protections. Critics claim that the CFPB’s decision reflects a broader trend under the current administration to dismantle previous regulatory enforcement efforts, as evidenced by further drops in ongoing cases and significant workforce reductions within the bureau.
This is about financial institutions fulfilling their basic obligations to protect customers' money and help fraud victims recover their losses.
Dismissing this lawsuit against the big banks that own Zelle is another troubling sign that the CFPB's new leadership is dramatically pulling back from enforcing the law.
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