Bank of America Says CFPB's Zelle Investigation May Lead to Litigation

Core Points - Bank of America is considering asking a court to resolve the Consumer Financial Protection Bureau's (CFPB) investigation regarding its payment processing through the Zelle network [1] - The CFPB has initiated discussions with Bank of America to pursue a resolution or file an enforcement action, and the bank is evaluating its next steps, including potential litigation [2] - Similar inquiries are being conducted for J.P. Morgan Chase and Wells Fargo regarding their handling of disputes related to Zelle transactions [2][4] Regulatory Context - Government authorities are conducting inquiries into how banks handle customer disputes related to fund transfers via the Zelle network [5] - In March 2023, five Senate Democrats raised concerns about Zelle's model, highlighting issues of fraud and scams, and questioned the responsibility of banks when fraud occurs [5] Industry Response - Early Warning Services, the operator of Zelle, reported a nearly 50% decrease in scam and fraud reports in 2023, with 99.95% of payments made without such reports [6] - The organization has implemented user interface updates, new technology, and consumer education initiatives to combat scams and fraud on the Zelle platform [6]