CFPB's lawsuits against banks: Five cases to watch in 2025

January 2, 2025 1:00 PM

Consumer Financial Protection Bureau Director Rohit Chopra

The Consumer Financial Protection Bureau has been on an enforcement spree in recent weeks, filing lawsuits against some of the largest banks and corporations ahead of the changeover to the Trump administration later this month.

In December alone, the agency filed lawsuits against the largest U.S. retailer, Walmart, one of the largest mortgage lenders, Rocket Mortgage, and three of the largest banks — Bank of America, JPMorgan Chase and Wells Fargo.

The timing of the lawsuit against Zelle, filed just before Christmas, sparked a backlash by banks against CFPB Director Rohit Chopra. The largest bank owners of the peer-to-peer payment network claim Chopra is engaging in politics — and purposely gumming up the works for the Trump administration — by filing the lawsuit at the 11th hour of the Biden administration.

Targeting large companies has been one of Chopra's signature strategies, and in December the CFPB issued a consent order establishing supervisory authority over Google's payment arm, Google Pay — a now-moribund service not to be confused with Google Wallet.

The CFPB also sued Comerica Bank for improper oversight of the federal government's Direct Express program, and the Texas bank countersued the agency a month later. And separately, the CFPB entered into a consent order agreement with Goldman Sachs and Apple for a range of consumer violations related to the Apple Card.

The next acting CFPB director appointed by President Donald Trump could choose to withdraw a lawsuit or not defend lawsuits in court, experts say.

Here is a summary of allegations in each case and current status.

Walmart and Branch Messenger

STATUS: Active / Pending
Filed in the U.S. District Court for the District of Minnesota

The CFPB alleged that drivers in Walmart's "last mile" delivery program called Spark Driver paid more than $10 million in fees and were forced to receive their pay using the mobile app Branch or face being terminated. Walmart drivers had to follow a complex process to access their funds through Branch, a fintech company that offers deposit accounts at $1.7 billion-asset Evolve Bank & Trust in Memphis, Tennessee.

The CFPB said Walmart opened and deposited drivers' wages into Branch accounts without their informed consent and made deceptive statements about the accounts in violation of federal law. Walmart also violated the Consumer Financial Protection Act and the Electronic Fund Transfer Act, the CFPB alleged.

Branch, based in Minneapolis, purportedly made misrepresentations about its capabilities for instant access to earnings, stop payments and transfers that required some consumers to waive their rights under the EFTA, the bureau said. Branch also failed to provide required disclosures and notices, did not honor stop-payment requests, failed to investigate and resolve alleged errors, and did not maintain necessary records, the CFPB alleged.

Early Warning Services, Bank of America, JPMorgan Chase, Wells Fargo

STATUS: Active / Pending
Filed in the U.S. District Court for the District of Arizona

The CFPB alleged the three banks designed and rolled out their own peer-to-peer payment platform Zelle, rushing to market without adequate anti-fraud measures. Despite millions of complaints about scams, the banks failed to stop fraud.

The CFPB said consumers complained of losing $870 million over the network's seven-year existence.

Early Warning Services, a fintech company based in Scottsdale, Arizona, is co-owned by seven of the largest banks: BofA, Chase, Wells, Capital One, PNC Bank, Truist Bank and U.S. Bank. The CFPB claimed the banks marketed Zelle as a safe or secure network, even though the banks and EWS knew that Zelle was an attractive vehicle for fraud including what the CFPB calls "induced fraud," or scams.

Banks and the CFPB have long been in dispute about whether consumers are on the hook for authorizing a payment that later turns out to be fraudulent. The CFPB is claiming that banks are required to reimburse a consumer when that person is tricked into sending a transfer to someone under false pretenses.

The banks claimed that romance scams, imposter schemes and any instance in which a consumer is duped into sending money to a criminal is not covered by the current statute. Instead, the banks said, the CFPB has created an entirely new reimbursement regime by suing the banks, instead of issuing a new rule and going through the normal rulemaking process.

The CFPB, in its lawsuit, appeared to expand the definition of Regulation E to require that banks reimburse customers for unauthorized transactions by alleging that the failure by financial institutions to prevent fraud is an "unfair" practice that the CFPB could enforce under its general prohibition against "unfair, deceptive or abusive acts or practices," known as UDAAP.

Rocket Homes Real Estate

STATUS: Active / Pending
Filed in the U.S. District Court for the Eastern District of Michigan

The CFPB alleged that Rocket Homes gave kickbacks to an affiliated real estate brokerage firm in exchange for referrals or future referrals for home loans, in violation of the Real Estate Settlement Procedures Act. The bureau alleges that Rocket required that brokers and agents steered clients away from competing lenders and prevented sharing information on products not offered by Rocket, including the availability of down-payment-assistance programs.

The CFPB alleges that The Mitchell Group and its owner Jason Mitchell also violated RESPA by offering $250 gift cards to agents who made the most referrals.

The core of the allegations is that Rocket Homes, based in Detroit, conditioned the right to receive future referrals — a thing of value under RESPA — on real estate brokers' and agents' agreement to refer their clients to Rocket Mortgage. Rocket Homes repeatedly pressured real estate brokerages to refer 80% of their customers to Rocket Mortgage and to an affiliated title company, and to steer clients away from competitors, the CFPB said. Consumers who were steered to Rocket Mortgage were deprived of valuable information and paid higher rates and fees for their loans.

Google Payment

STATUS: Active / Pending
Filed in U.S. District Court for the District of Columbia

The CFPB issued a consent order in December against Google's payment arm, Google Payment Corp., claiming supervisory authority over the peer-to-peer payment network.

The consent order did not include any finding of wrongdoing by Google Pay, but the CFPB said consumer complaints about fraud and error resolution were grounds for claiming supervision and examination based on the risks the tech giant poses to consumers.

Google contested the designation and sued the CFPB almost immediately, claiming the CFPB provided thin evidence that Google Pay warranted supervision. Google said the CFPB received 26 unverified complaints about Google Pay App, which had allowed users to store funds and send money to each other but is no longer offered in the U.S. The CFPB said the discontinuation of the product did not release Google Payment from supervision.

The CFPB said complaints about Google Pay App gave it "reasonable cause to determine" that Google had failed to adequately investigate complaints about erroneous transactions. The CFPB's order stated that Google's conduct does not have to rise to the level of a legal violation for the CFPB to invoke its supervisory authority.

A Google spokesman, José Castañeda, called the CFPB's actions "a clear case of government overreach." Many experts think a Trump-appointed director will reverse or drop the order against the Mountainview, California-based Google.

Comerica Bank

STATUS: Active / Pending
Filed in the U.S. District Court for the Northern District of Texas

The CFPB alleged that Comerica Bank engaged in unfair acts and practices in its exclusive contract with the Treasury Department to manage the federal Direct Express debit card program, a prepaid card for unbanked consumers who receive government benefits including Social Security.

The bureau claimed Comerica failed to provide customer service and instead impeded consumers' access to their own accounts, forcing consumers to close their accounts and request new cards, which caused them to incur additional fees. Comerica also failed to provide correct and complete information to enrollment-fraud victims regarding whether the fraud occurred and how to obtain remediation. The banks also allegedly charged consumers ATM fees that they did not owe and repeatedly failed to comply with the Electronic Fund Transfer Act by failing to timely investigate error claims, report the results of its investigations to cardholders and provide cardholders with a written explanation of its findings.

Comerica countersued the CFPB in November alleging that the bank acted with the oversight and approval of the federal government, which picked it three times to run the program in 2008, 2014 and 2019.