A federal regulator has sued JPMorgan Chase, Wells Fargo and Bank of America.
FILE - The Capitol in Washington, is framed by early morning clouds, March 19, 2024. Congress has until midnight Friday to come up with a way to fund the government, or federal agencies will shutter. It's up to each federal agency to determine how it handles a shutdown, but there would be disruptions in many services.
The CFPB claims that the banks violated federal consumer financial laws governing electric funds transfers, which require banks conduct “reasonable investigations” when consumers report transaction errors, and the agency's prohibition on unfair acts or practices by failing to take steps to prevent and address fraud on Zelle. The agency seeks an unspecified amount of money to cover refunds, damages and penalties.
Also named as a defendant in the lawsuit is Early Warning Services, a fintech company based in Scottsdale, Arizona, that operates Zelle. EWS is owned by seven U.S. banks, including JPMorgan, Wells Fargo and Bank of America. Those three banks are the largest financial institutions on the Zelle network, accounting for 73% of activity on Zelle last year.
"When a client has an issue, we work directly with them," the bank based in Charlotte, North Carolina, said. San Francisco-based Wells Fargo declined to comment on the lawsuit. Representatives of New York-based JPMorgan did not immediately respond to a request for comment.
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