March 4 (Reuters) – The U.S. Consumer Financial Protection Bureau (CFPB) informed a federal court on Tuesday that it was dropping a lawsuit filed in December against JPMorgan Chase, Bank of America, and Wells Fargo over their handling of the payment service Zelle. The agency, which was virtually shut down by President Donald Trump last month, had accused the banks of failing to protect consumers from fraud costing hundreds of millions of dollars. Representatives for the CFPB, JPMorgan, Wells Fargo, and Early Warning Services, which operates Zelle, did not immediately respond to requests for comment. Bank of America declined to comment. The CFPB has now dropped seven enforcement cases brought under former President Joe Biden, including one against Capital One. Many other pending cases have been paused in court. In the final days of the Biden administration, the CFPB accused Early Warning Services and the three banks of rushing Zelle to market without proper safeguards, leading to numerous consumer complaints about fraud. Though Trump has suggested eliminating the CFPB, agency officials maintain that the administration intends to operate a “streamlined” CFPB in accordance with legal obligations. An employee union and consumer advocates are suing to stop what they claim are plans to gut the agency and hinder its ability to fulfill federal law obligations. — news from Reuters
