Bank of America Weighs Lawsuit in Zelle Investigation

Bank of America (BofA) is evaluating the possibility of legal action while holding discussions with Consumer Financial Protection Bureau (CFPB) staff regarding the processing of transactions through the Zelle payment network. As disclosed in a recent regulatory filing by BofA, the discussions aim to resolve an investigation related to the matter or potentially lead to a punitive action.

Launched in 2017, Zelle is a leading peer-to-peer payment service in the U.S., co-owned by seven major banks, including BofA and JPMorgan. JPMorgan had previously indicated in August that it was considering legal action against the CFPB concerning the Zelle investigations.

Additionally, BofA is actively collaborating with several federal regulatory agencies on certain elements of its Bank Secrecy Act/anti-money laundering (BSA/AML) and sanctions compliance programs. The BSA comprises a series of regulations aimed at preventing money laundering and the financing of terrorism in the U.S. BofA plans to continue developing these programs and does not foresee significant financial damage from compliance issues.

BofA continues its discussions with regulatory agencies, and it is anticipated that the resolution of the investigations may include one or more public orders from the agencies.

This development follows a recent action by a U.S. banking regulator against Wells Fargo, stating that the bank had inadequate measures against money laundering and other illegal activities, which imposed restrictions on the bank's ability to expand its presence in high-risk businesses.