In a significant shift in regulatory approach, the Consumer Financial Protection Bureau (CFPB) has dropped its lawsuit against three of the largest U.S. banks—JPMorgan Chase, Bank of America, and Wells Fargo—along with Zelle’s operator, Early Warning Services.
The case, which alleged that these institutions failed to protect consumers from widespread fraud on the Zelle payment network, was dismissed with prejudice on March 4, 2025, according to a one-page filing.
This legal term means the complaint cannot be refiled, effectively closing the chapter on this Biden-era enforcement effort as the Trump administration reshapes the agency’s priorities.
The lawsuit, originally filed in December 2024, accused the banks and Early Warning Services of negligence in safeguarding Zelle users, claiming that their inaction led to over $870 million in consumer losses since the platform’s launch in 2017.
The CFPB argued that the banks rushed Zelle to market to compete with apps like Venmo and Cash App, prioritizing speed over security.
The agency pointed to specific figures: 420,000 JPMorgan customers losing $360 million, 210,000 Bank of America customers losing $290 million, and 280,000 Wells Fargo customers losing $220 million.
The suit sought to compel the banks to reimburse victims and strengthen fraud protections, asserting that their failure to act constituted an “unfair” practice under consumer protection laws.
This dismissal marks the latest in a string of terminated CFPB cases since the transition to the Trump administration.
Under former Director Rohit Chopra, the agency pursued an aggressive consumer protection agenda, including this high-profile action against Zelle and its bank owners.
However, with Acting Director Russell Vought now at the helm—and President Donald Trump’s appointee Jonathan McKernan awaiting confirmation—the CFPB appears to be dialing back enforcement.
The Zelle case is the seventh such action dropped in recent weeks, following suits against Capital One, Rocket Cos., and fintech lender SoLo Funds.
The banks and Zelle have consistently contested the CFPB’s claims.
JPMorgan called the lawsuit an overreach, arguing that holding banks accountable for criminal acts like scams—including romance fraud—exceeded the agency’s authority.
Bank of America emphasized its efforts to work with customers on Zelle concerns, while Early Warning Services labeled the suit “meritless,” highlighting its fraud reimbursement policies as industry-leading.
Wells Fargo declined to comment but referred inquiries to Zelle, which maintained that the CFPB’s allegations were politically motivated rather than factually grounded.
The seemingly abrupt end to this case raises questions about the future of consumer protection in digital payments.
Zelle, used by over 143 million Americans and backed by more than 2,200 financial institutions, processed $481 billion in transactions in the first half of 2024 alone.
Critics of the dismissal including Senator Elizabeth Warren argue it leaves victims of fraud without recourse, while supporters see it as a rejection of regulatory overreach.
The CFPB’s pivot suggests a lighter touch on financial institutions, aligning with the new Trump Administration’s broader deregulatory stance.
For now, Zelle and its major banking partners can take a breather, but the debate over accountability in the digital payments space is far from settled.