The Consumer Financial Protection Bureau (CFPB) has dropped its lawsuit against Zelle's operating entity, Early Warning Services, and partner banks JPMorgan Chase, Bank of America, and Wells Fargo. The lawsuit was filed in December and alleged that customers of the three banks had lost more than $870 million during the seven years Zelle has been active.

The CFPB's decision to drop the lawsuit is seen as a shift in priorities under the Trump administration. The agency is now overseen by Acting Director Russell Vought, who has ordered the CFPB to cease all supervision and examination activity. This move has been met with criticism from employees of the bureau, who have sued to try to keep the CFPB alive.

Background

The CFPB was created in 2010 as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The agency was tasked with regulating consumer financial products and services, including mortgages, credit cards, and student loans. Under its previous director, Rohit Chopra, the CFPB made several moves to increase oversight on financial products offered by tech companies.

However, since taking office, the Trump administration has taken sweeping actions to control and close federal government departments. Agencies that have historically regulated businesses owned by Elon Musk, a ally of the administration, have been among those with reduced powers.