File photo: Office of Management and Budget (OMB) Acting director Russell Vought testifies before the Huisbudget Committee for 2020 Budget on Capitol Hill in Washington, US, 12 March 2019.
Yuri Gripas | Reuters
The Consumer Financial Protection Bureau On Tuesday it has to be court case Against the operator of the Zelle Payment network and the three American banks that dominate transactions.
The CFPB has sued early warning services, which manages the peer-to-peer payment network, as well as JPMorgan Chase, Bank of America And Wells Fargo In December, claims that the companies did not correctly investigate fraud complaints whether victims have given compensation.
The CFPB “rejects this action against the early warning services of the defendants, LLC, Bank of America, NA, JPMorgan Chase Bank, NA and Wells Fargo Bank, after, with prejudice,” said the regulator in submitting it.
Since acting director Russell Vought has taken over the CFPB, the agency has dropped at least half a dozen things that brought its predecessor, Rohit Chopra. The desk is now involved in one legal struggle After a trade union representing CFPB employees, employees complained to stop mass dismissals and rinsing data that would have happened under Vought and Elon Musk’s Department of Government Efficiency.
The CFPB said Since the launch of Zelle in 2017, customers of the three banks have lost more than $ 870 million. The service has started to offer bank customers an alternative for peer-to-peer platforms, including PayPal. Last year Zelle crossed $ 1 trillion in total volume, of which it was the most ever for a peer-to-peer platform.
Because the recent matters were rejected with prejudice, the CFPB has agreed to never make these claims again, which means that the possibility of clawing funds for exemption from consumers, the former head of enforcement Eric Halperin told CNBC last week.
A spokeswoman for the Zelle brand said that they welcomed the dismissal and a statement repeated that the CFPB right case was “legal and actually inadequate”.
A spokeswoman for JPMorgan said that although “banks play a crucial role in scam prevention and consumer education …. this is a national security problem that requires collective effort in public and private sectors.”
“Banks consistently followed the Act in offering services via Zelle,” Lindsey Johnson, president of the Consumer Bankers Associationsaid in a statement after the dismissal. “At a time when fraud and scam activity rise … We look forward to getting past finger pointing and political greatness and instead working constructively with policy makers to prevent the random causes of these threats.”