The Consumer Financial Protection Bureau (CFPB) has officially dropped its lawsuit against Zelle, a popular peer-to-peer payment platform. This decision marks another significant shift within the agency under the Trump administration.
The lawsuit, initially filed in December against Zelle’s operating entity, Early Warning Services, along with major partner banks such as JPMorgan Chase, Bank of America, and Wells Fargo, alleged that customers lost over $870 million during Zelle’s seven years of operation.
Previously, the CFPB sought to enhance oversight of financial products offered by technology companies. However, under the direction of Acting Director Russell Vought, the agency has ceased all supervision and examination activities. This change reflects a broader trend of reduced regulatory power within federal agencies, particularly those overseeing sectors like cybersecurity and digital services.
Confusion surrounds the future of the CFPB as employees have initiated legal actions to maintain the agency’s existence, despite mixed signals from government leadership regarding its status. The current political climate has led to significant cuts and operational changes across various federal departments.
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