Banking and Finance Law Daily Wrap Up, ENFORCEMENT ACTIONS—CFPB dismisses Zelle suit; continues MoneyLion action; seeks oral argument postponement, (Mar 5, 2025)
Organizations Mentioned:Bank of America | Bank of America, N.A. | Capital One Financial Corp. | Capital One N.A. | Consumer Bankers Association | Consumer Financial Protection Bureau | Consumer Reports | Early Warning Services, LLC | J.P. Morgan | JPMorgan Chase Bank, N.A. | JPMorgan Chase Bank, NA | Libre by Nexus, Inc. | MoneyLion Technologies Inc. | Nexus Services, Inc. | TransUnion | TransUnion Corp. | Wells Fargo Bank, N.A. | Wells Fargo Bank, NA | Zelle
Despite the continued standdown” of activities within the CFPB, there have been a number of new developments regarding enforcement actions taken by the Bureau.
Following its series of case dismissal at the end of February, the Consumer Financial Protection Bureau has taken additional steps regarding enforcement actions taken prior to change in presidential administrations.
One of the more prominent dismissals in the first round dealt with a case brought against Capital One N.A., and its parent holding company, Capital One Financial Corp., in which the CFPB alleged that Capital One misled consumers regarding its high-interest savings accounts, kept consumers in the dark, leading to “cheating millions of consumers out of more than $2 billion in interest” (see Banking and Finance Law Daily, Feb. 28, 2025).
The CFPB has filed a notice that it will dismiss, with the prejudice, its lawsuit entitled Consumer Financial Protection Bureau v. Early Warning Services LLC No . 2:24-cv-03652 (D. Ariz. March 4, 2025). In this case, the Bureau alleged that Early Warning Services, Bank of America, JP Morgan Chase, and Wells Fargo rushed the peer-to-peer payment network—Zelle—to market without implementing effective consumer safeguards (see Banking and Finance Law Daily, Dec. 20, 2024).
Following news of the Bureau’s action, Consumer Bankers Association President and CEO Lindsey Johnson noted “banks have and consistently do follow the law in offering services through Zelle.” She added “we look forward to moving past finger pointing and political grandstanding and, instead, working constructively with policymakers to counter the root causes of these threats.” On the other hand, Chuck Bell, advocacy program director at Consumer Reports, stated, “Dismissing this lawsuit against the big banks that own Zelle is another troubling sign that the CFPB’s new leadership is dramatically pulling back from enforcing the law and protecting consumers who have been mistreated by banks and other financial firms.” He continued, “Consumers who have been treated unfairly by banks, paycheck advance companies and other lenders stand to lose billions of dollars in potential relief if the CFPB continues to abandon its pending lawsuits against other financial industry wrongdoers.”
In a second case, Consumer Financial Protection Bureau v. TransUnion 1:22-cv-01880 (N.D. Ill. Feb. 28, 2025), the parties have filed a joint stipulation to voluntarily dismiss the case against all defendants, with prejudice. The CFPB has filed its lawsuit claiming that TransUnion, its subsidiaries, and a former executive violated a 2017 consent order and additional consumer protection laws by using “dark patterns” on the TransUnion website to trick consumers into signing up for products and services (see Banking and Finance Law Daily, April 12, 2022).
The defendants in the case of Consumer Financial Protection Bureau v. MoneyLion Technologies Inc. 1:22-cv-08308 (S.D.N.Y. March 3, 2025) informed the trial judge that “MoneyLion no longer intends to move for a stay and will continue defending against the claims in the First Amended Complaint.” The CFPB originally filed its lawsuit, in 2022, claiming that MoneyLion and 38 of its subsidiaries imposed illegal and excessive charges against servicemembers and their dependents in violation of the Military Lending Act and the Consumer Financial Protection Act. The Bureau filed a First Amended Complaint in 2023 alleging that MoneyLion attracted consumers with promises of low-APR installment loans and that MoneyLion supposedly “trapped” consumers who took out these loans in a costly membership program (see Banking and Finance Law Daily, Sept. 30, 2022 and Jun. 13, 2023).
Finally, the CFPB is seeking to postpone the March 20, 2025, oral arguments to be held in Consumer Financial Protection Bureau v. Nexus Services, Inc. 24-1334 (4th Cir. March 4, 2025). The CFPB noted in its motion that good cause existed given the change in presidential administrations and the expiration of timelines involving rescheduling oral arguments. Nexus Services, Inc., an immigration bond funding group, is appealing the entry of an injunction and $811 million penalty entered against it in a Virginia federal district court (see Banking and Finance Law Daily, April 2, 2024 and Nov. 6, 2024).
Companies: Bank of America, N.A.; Capital One Financial Corp.; Capital One N.A.; Consumer Bankers Association; Consumer Reports; Early Warning Services, LLC; JPMorgan Chase Bank, N.A.; Libre by Nexus, Inc.; MoneyLion Technologies Inc.; Nexus Services, Inc.; TransUnion; Wells Fargo Bank, N.A.; Zelle
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