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The CFPB drops its case against payment app Zelle

Old_JoeOld_Joe
in Other Investing
Following are excerpts from a current NPR report:
The Consumer Financial Protection Bureau has dropped its lawsuit against the operator of payment platform Zelle and three of its parent banks, in the latest move by the Trump administration to undo actions of the bureau's prior leadership. The bureau had filed the lawsuit in late December against the operator of Zelle, Bank of America, JPMorgan Chase and Wells Fargo "for failing to protect consumers from widespread fraud." Customers of the top three banks lost more than $870 million over seven years due to the banks' failures to protect them, according to the CFPB.

"This is about financial institutions fulfilling their basic obligations to protect customers' money and help fraud victims recover their losses," then-CFPB Director Rohit Chopra said at the time. "These banks broke the law by running a payment system that made fraud easy, and then refusing to help the victims."

However, that was then. On Tuesday the administration dropped its case against Zelle, according to a filing in U.S. District Court in Arizona.

Zelle and its parent banks are just the latest enforcement target to be abandoned by the CFPB, which is currently led by acting director Russell Vought. Last week the bureau dropped cases it was litigating against five companies including Capital One, Rocket Homes and others. It had earlier dropped its case against online lending platform SoLo Funds.

The CFPB has also been decimated in a matter of weeks, with agency's employees ordered to stop essentially all work, while some 150 employees have been fired. The bureau's D.C. headquarters has also been shuttered.

Comments

  • AnnaAnna
    It comes across as a giant conspiracy to set up an easily executed giant transfer of wealth from whoever is deliberately or randomly chosen to be a victim. (Yes, I know that is a leap but ... Russia?) Makes me wonder if a customer of one of these banks were NOT signed up for the Zelle service would they still be vulnerable?
  • Edmond
    Anna said:

    It comes across as a giant conspiracy to set up an easily executed giant transfer of wealth from whoever is deliberately or randomly chosen to be a victim. (Yes, I know that is a leap but ... Russia?) Makes me wonder if a customer of one of these banks were NOT signed up for the Zelle service would they still be vulnerable?


    Russia? Russia? No, more like Israel.

  • BaluBalu
    edited March 5
    Anna said:

    It comes across as a giant conspiracy to set up an easily executed giant transfer of wealth from whoever is deliberately or randomly chosen to be a victim. (Yes, I know that is a leap but ... Russia?) Makes me wonder if a customer of one of these banks were NOT signed up for the Zelle service would they still be vulnerable?

    Not for the alleged fraud but there may be other vulnerabilities.

    I use Zelle in an account that never has material amount of money in it. Too many people are using Zelle and so I had to be on it. FYI - like Apple, I am not an early adopter of newer technology - I wait for kinks to be worked out.

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