The Consumer Financial Protection Bureau’s (CFPB) lawsuit against three major U.S. banks and Early Warning Services (EWS), the company that operates Zelle, has elicited strong industry backlash.
Multiple banking advocacy groups have released statements questioning the validity of the bureau’s claims that the bank-owned payment platform lacks sufficient fraud protections. See what is being said in the roundup below:
Consumer Bankers Association President and CEO Lindsey Johnson:
“It is a common-sense principle that being safe means following the law. Banks have rigorously followed the law in characterizing and offering services through Zelle, yet the CFPB today has moved the goalposts, suggesting that ‘being safe’ means something other than what Congress has defined in law.
“In a time when fraud and scam activity is surging across industries and government alike, the CFPB has chosen to single out a platform owned by banks, a platform that experiences far fewer instances of fraud compared to others.
“The CFPB would better serve its mission of protecting consumers by actually working with industry to counter the root causes of these threats.”
Bank Policy Institute President and CEO Greg Baer:
“The CFPB’s 11th-hour announcement to invoke its UDAAP authority against Zelle is the latest attempt to twist UDAAP to accommodate the Director’s political views, completely independent of any case law reading of the term.”
JPMorgan Chase spokesperson Alexia Winfield to Dodd Frank Update:
"As a last ditch effort in pursuit of their political agenda, the CFPB is now overreaching its authority by making banks accountable for criminals, even including romance scammers. It’s a stunning demonstration of regulation by enforcement, skirting the required rulemaking process. Rather than going after criminals, the CFPB is jeopardizing the value and free nature of Zelle, a trusted payments service beloved by our customers."
Learn more details about the CFPB’s allegations involving Zelle and see what responses Dodd Frank Update received from the companies named in the lawsuit here.