JPMorgan Chase Could Sue U.S. Government Over Zelle Scams

(TheConservativeTimes.org) – A two hundred page filing from JPMorgan Chase has shown the details of how hostile the bank’s relationship with the government has become.

The Consumer Financial Protection Bureau could punish JPMorgan Chase for its role in Zelle scams that took place. Ultimately, the bank is accused of failing to remove criminal accounts off of its platform and failing to compensate victims who were affected by the scam.

In response, JPMorgan Chase has said, “The firm is evaluating next steps, including litigation.”

There aren’t many cases where a bank would sue its regulator. According to policy experts it’s mostly because of the fear these corporations put on them to not provoke. However, now, there are many factors that have created an environment where banks and their regulators are farther apart.

“If you go back fifteen or twenty years, the view was it’s not particularly smart to antagonize your regulator, that litigating all this stuff is just kicking the hornet’s nest,” said Tobin Marcus, the Head of U.S. Policy at Wolfe Research.

He continued to say that the difference between how ambitious Joe Biden regulators are and how conservative the courts are have left room for litigation and issues between the two.

Marianna Lake, head of JPMorgan’s consumer bank, said “The industry is facing an onslaught of regulatory and potential legislative change.”

Democratic lawmakers have been pressuring Zelle because of the financial crimes that have taken place on the platform. Many of the transactions on Zelle are uneventful, but over one hundred and fifty million dollars in transactions have been disputed as fraud.

One issue is that according to the Electronic Fund Transfer Act, these banks are supposed to give refunds for fraud unless the customer has been duped into authorizing the transaction by a scammer, then it’s not refunded.

The bank has begun warning Zelle users on the Chase app to “stay safe from scams” and disclosed that customers most likely wouldn’t be refunded for scam transactions.