CFPB complaint alleged that consumers lost at least $870 million in fraud over seven years due to failures from big Wall Street Banks and Zelle’s parent company to implement effective consumer safeguards
March 4, 2025 | WASHINGTON, D.C. — Today, Trump leadership at the Consumer Financial Protection Bureau (CFPB) dropped a major enforcement case against the operators of the peer-to-peer payments app Zelle—parent company Early Warning Services (EWS), and three of EWS’ owner banks, Wells Fargo, Bank of America, and J.P. Morgan Chase. The dismissal of the case occurred despite an incriminating complaint filed by the CFPB in December 2024 that alleged that Americans have lost more than $870 million in fraud due to failures from the parent company and the three banks—which are three of the biggest banks in the U.S.—to protect consumers from fraud. The CFPB’s complaint alleged that the banks and EWS rushed Zelle to market to compete with other popular payment apps, like Venmo and CashApp, without implementing effective consumer safeguards.
“Big businesses are lining up for their pardons and special favors from the Trump administration, and the Trump leadership at the CFPB has been more than happy to oblige by letting all sorts of big corporations off the hook for illegal activity,” said Mike Pierce, executive director of the Student Borrower Protection Center. “Last week, it was a giant student loan servicer that illegally pursued borrowers for debts that had been discharged in bankruptcy—debts stemming from private student loans made by many of the largest banks in the world. Today, it’s some of the same mega Wall Street banks that have already been caught red-handed by the CFPB for repeatedly ripping off Americans and will now never face consequences for allowing fraud to run rampant on Zelle.”
“Trump’s corporate pardons are leaving the door wide open for fraudsters and criminals to plunder Americans’ pocketbooks, and hardworking families are being treated as the casualties of the Trump administration’s desperate attempts to appease billionaire corporations,” said Erin Witte, director of consumer protection at Consumer Federation of America. “This sends the message that consumers are open season for being ripped off, and that big tech companies like Elon Musks’ X can trample over your finances without any oversight or accountability.”
Background
In recent days, Trump leadership at the CFPB has dismissed a slew of enforcement actions totaling billions of dollars in consumer harm. The dismissal of these cases “with prejudice” means the CFPB will never be able to pursue these cases again and Americans will never see relief from a wide range of alleged lawbreaking from these corporate entities. The cases include:
- Banking behemoth Capital One for cheating savings account holders out of $2 billion in interest
- Student loan servicer Pennsylvania Higher Education Assistance Agency for illegally collecting on student debt that was discharged in bankruptcy and sending that junk info it to credit reporting agencies
- Credit reporting giant TransUnion, and its longtime former executive John Danaher, for violating a 2017 law enforcement order and engaging in deceptive marketing regarding its credit scores and other credit-related products
- Rocket Homes for its illegal mortgage broker kickback scheme
- Vanderbilt for setting manufactured home buyers up to fail with unaffordable loans
- Heights Finance for illegal loan-churning practices that harvested hundreds of millions in loan costs and fees
- SoLo Funds for deceiving borrowers about the total cost of loans
All three banks involved in the Zelle case are repeat offenders that have been collectively penalized numerous times by the CFPB for a range of illegal activity. Most notably, in 2022, Wells Fargo was slapped with a $3.7 billion fine, including $2 billion in consumer redress, by the CFPB for legal violations across several of its largest product lines. The CFPB said at the time that the bank’s illegal conduct led to billions of dollars in financial harm to its customers. In 2016, Wells Fargo was also fined $100 million by the CFPB for notorious conduct that involved secretly opening credit card and deposit accounts in customers’ names. Bank of America has been similarly penalized by the CFPB to the tune of hundreds of millions of dollars alone in the last few years alone for numerous instances of illegal conduct, including double-dipping on junk fees, withholding credit card bonuses, and opening fake accounts; botching the disbursement of state unemployment benefits; illegally garnishing customer accounts; and submitting false mortgage lending information to the federal government. J.P. Morgan Chase was also ordered by the CFPB to refund more than $300 million to its customers in 2013 for illegal credit card activity.
Further Reading
Consumer Federation of America and SBPC Memo Detailing 38 Enforcement Actions Abandoned by CFPB Leadership: Trump and Vought Desert Consumers and Working Families Amid Violations by Predatory Financial Companies
SBPC Reacts to Dismissal of Predatory Student Loan Case Involving Giant Student Loan Servicer PHEAA: CFPB Drops Enforcement Action Against Predatory Student Loan Company
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About Student Borrower Protection Center
Student Borrower Protection Center (SBPC) is a nonprofit organization focused on eliminating the burden of student debt for millions of Americans. We engage in advocacy, policymaking, and litigation strategy to rein in industry abuses, protect borrowers’ rights, and advance racial and economic justice.
Learn more at protectborrowers.org or follow SBPC on Twitter @theSBPC.
About Consumer Federation of America
Consumer Federation of America is an association of non-profit consumer organizations that was established in 1968 to advance the consumer interest through research, advocacy, and education.
Learn more at consumerfed.org or follow CFA on Twitter at @ConsumerFed.