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The Consumer Financial Protection Bureau (CFPB) has dropped its lawsuit against Early Warning Services (EWS), the company behind Zelle, along with JPMorgan Chase, Wells Fargo, and Bank of America. This move is part of a broader shift in federal enforcement under the new administration.
The lawsuit, filed in December, claimed the banks failed to protect customers from widespread fraud on Zelle. The CFPB alleged that they rushed the platform to market without strong fraud safeguards and then denied many fraud victims reimbursement.
EWS, based in Scottsdale, Arizona, is owned by seven major banks, including JPMorgan Chase, Wells Fargo, and Bank of America, which handled 73% of Zelle transactions in 2023.
A court filing in Arizona confirmed that the CFPB dismissed the case with prejudice, meaning it cannot be refiled. This follows other recent CFPB decisions to drop cases against Capital One, Rocket Homes, and Vanderbilt Mortgage and Finance.
These lawsuits were originally brought under former CFPB Director Rohit Chopra, who was recently fired. Since then, the administration has ordered the agency to scale back enforcement, shut down its headquarters, and cut staff.
Other regulators are also pulling back. The Securities and Exchange Commission (SEC) has dropped or delayed cases against several cryptocurrency companies. Recently, the SEC and Binance agreed to pause a lawsuit, and Coinbase reached a similar agreement. Robinhood also announced that its case had been closed.
These changes reflect a new approach to financial regulation, with fewer enforcement actions against banks and financial companies.
