JPMorgan Chase is weighing the possibility of suing the US government following a disclosure that the Consumer Financial Protection Bureau (CFPB) may impose penalties on the bank for its involvement in Zelle, a popular peer-to-peer payments network, CNBC reports.
The bank is accused of failing to properly address fraudulent accounts and not fully reimbursing scam victims, according to sources familiar with the investigation.
In a recent quarterly report, the bank hinted at potential legal action, stating that it is “evaluating next steps, including litigation.” The move signals a growing divide between banks and regulators, a situation that policy experts describe as unprecedented.
The tension between JPMorgan and the CFPB reflects broader trends in the financial industry, where companies have increasingly turned to the courts to push back against federal oversight. Legal experts point to a growing pattern across various industries, including banking, energy, and pharmaceuticals, where corporations are using litigation as a strategy to undermine federal regulatory powers.
The potential legal conflict comes amid heightened scrutiny of Zelle, which has faced criticism from lawmakers over the handling of fraudulent transactions. A recent Senate report found that three major banks, including JPMorgan, collectively reimbursed only 38% of disputed transactions on Zelle. While JPMorgan claims to refund 100% of unauthorized payments, the bank often determines that customers authorized the transactions, leading to a discrepancy in reported reimbursements.
This dispute is part of a larger regulatory battle. JPMorgan CEO Jamie Dimon has been vocal in opposing a range of regulatory proposals, including those aimed at reducing fees and increasing capital requirements for large banks. Dimon argues that such measures could raise costs for consumers, potentially increasing mortgage payments and credit card rates.
Legal challenges from corporations, particularly those targeting regulations, have become more common in recent years, with many lawsuits filed in conservative-leaning courts. JPMorgan’s potential lawsuit against the CFPB could mark a significant escalation in the ongoing struggle between financial institutions and government regulators.
The CFPB has yet to comment on the situation, and JPMorgan declined to provide further details.
