Zelle Is Called To Tighten Activity By Senator Warren In A Letter To The CFPB
Senator Elizabeth Warren, D-Mass., has called on consumer finance regulators in the United States to increase their monitoring of Zelle.
In particular, Warren wants the Consumer Financial Protection Bureau to order banks to compensate clients who were scammed by Zelle, according to the letter sent to the CFPB by the Massachusetts Democrat.
The letter focuses on an investigation Warren’s office has been conducting into Zelle, a platform used by several of the country’s top banks to handle peer-to-peer (P2P) payments among account holders.
According to Warren’s conclusions, the CFPB must update and reinforce laws regulating banks’ duties to compensate clients who have been cheated using Zelle and other peer-to-peer payment networks. Prior to her stint in the Senate, Warren was essential in establishing the CFPB as part of the 2010 Dodd-Frank Act.
“The findings of this report reveal that the Consumer Financial Protection Bureau must update and strengthen regulations governing the obligations of banks to repay customers who are defrauded on Zelle and other peer-to-peer payment platforms,” according to the letter.
In July, Zelle was the topic of a heated dispute between the Senate Banking Committee and the CEOs of major banks. A key point of contention is the nature of the scams at hand, with banks claiming to refund consumers who did not make payments from their accounts. Customers who are duped into sending money are not reimbursed by banks.
However, the CFPB is under assault following a Fifth District Court judgment last week that said its financing system, which is derived directly from the Federal Reserve rather than traditional appropriations, is unconstitutional.
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