From CNBC: 2024-12-20 10:16:46

Rohit Chopra, CFPB director, testified before the Senate Banking Committee about the agency’s semi-annual report. The CFPB sued Zelle and major US banks, JPMorgan Chase, Bank of America, and Wells Fargo, alleging failure to address fraud complaints. Customers have lost over $870 million since Zelle’s launch in 2017.

Zelle, a peer-to-peer payments network, is accused of lacking proper safeguards against fraud, leaving victims vulnerable. The CFPB claims the banks rushed to launch Zelle to compete with payment apps, resulting in a “gold mine for fraudsters.” Zelle denies the allegations and vows to defend itself against the lawsuit.

CFPB Director Chopra criticized major banks for prioritizing Zelle’s launch without adequate security measures. Zelle defends its reimbursement policies and accuses the CFPB of encouraging criminal activity. The lawsuit could impact consumers, small businesses, and community banks. Updates on this developing story are expected.

Read more: CFPB sues JPMorgan Chase, Bank of America, Wells Fargo over Zelle fraud