Business
Consumer agency drops Zelle lawsuit against big banks in latest legal pullback
In the waning days of the Biden administration, the Consumer Financial Protection Bureau filed a series of lawsuits against financial companies it accused of running roughshod over the public.
Now, the agency under a new interim director is rapidly withdrawing those cases and others, with the CFPB most recently filing a motion this week in federal court in Arizona to drop a December lawsuit against payment app Zelle and its big bank backers.
The lawsuit accused the company that operates the app on behalf of a consortium of banks — including defendants Wells Fargo, JP Morgan Chase and Bank of America — of rushing to launch the service to compete with Venmo and other payment apps.
Without adequate consumer safeguards, Zelle users experienced $870 million in fraud-related losses, it alleged.
“We welcome the CFPB’s decision to drop its lawsuit against the Zelle network. As we’ve said before, this lawsuit was without merit, and legally and factually flawed,” said a spokesperson for Early Warning, the Scottsdale, Ariz., company that operates Zelle for the banks.
The CFPB moved to dismiss the case in a brief legal filing and has not issued a statement explaining its decision, but the move is the latest in a series of case dismissals and other actions intended to rein in the agency since Biden appointee Rohit Chopra was fired by President Trump on Feb. 1.
The agency did not respond to a request for comment.
Acting chief Russell Vought — also Trump’s director of the Office of Management and Budget and a leader of the administration’s mission to downsize the federal government — has ordered staff to stop all “supervision and examination activity” and has sought to reduce the agency’s funding, saying in a tweet: “This spigot, long contributing to CFPB’s unaccountability, is now being turned off.”
The CFPB filed a lawsuit in January against Capital One Financial Corp., accusing the financial services company of cheating customers out of $2 billion in interest payments, but the agency dropped the case last month.
The CFPB similarly withdrew a case it had filed against Vanderbilt Mortgage and Finance, a company owned by Warren Buffett’s Berkshire Hathaway, which it had accused of trapping mobile home buyers into unaffordable loans that cost them fees and penalties and even the loss of their homes.
Other lawsuits that have been dropped include cases against student loan servicer Pennsylvania Higher Education Assistance Agency, which was accused of collecting on loans in bankruptcy; Heights Finance, which allegedly engaged in illegal “loan churning” to generate more fees; and Rocket Homes, one of the country’s largest home lenders, which was accused of illegal kickbacks.
When the Rocket Homes case was dropped last month, the lender called the suit “an empty claim brought forth by former CFPB director Chopra for the sole purpose of seeing his name in headlines during the final days in public office.”
Rick Claypool, a researcher at Public Citizen, said it was expected that the Trump administration would seek to pull back from aggressively prosecuting financial companies accused of wrongdoing, but not to such an extent.
“What has happened is that it is played out with somewhat shocking speed and recklessness, with whole categories of corporate enforcement being dropped and paused,” said Claypool, author of a report released Tuesday, which calculated the administration halted or moved to dismiss investigations against 89 corporations across multiple federal agencies.
The consumer group last month joined with other advocacy groups and a federal union in filing a lawsuit against the CFPB and Vought challenging what it calls the “unlawful dismantling” of the agency, which was established by an act of Congress in 2011 after the industry excesses that led to the financial crisis.
During the first Trump administration, the agency issued payday lender rules that consumer groups considered weaker than what the CFPB had proposed under the Obama administration. But it also pursued enforcement actions against banks, including reaching a consent order with Citibank, which agreed to pay $335 million in restitution to customers over allegations it violated the Truth in Lending Act.
Vought is currently running the agency, but Trump has nominated attorney and former Federal Deposit Insurance Corp. Director Jonathan McKernan to be its chief.
During his confirmation hearing last month, McKernan pledged to “implement and enforce the federal consumer financial laws and perform each of [the agency’s] other statutorily assigned functions” — even as Vought has reportedly sought to cancel the lease on the CFPB’s headquarters.
Chopra, in a recent interview, said opposition to the agency stems not only from traditional banking and lending firms but from big Silicon Valley tech companies that want to get into the finance business.
“We know that their tentacles are all over, and many have significant aspirations in banking, lending and payments,” Chopra told Drop Site News, specifically mentioning Google, Apple and Facebook, which attempted to launch its own cryptocurrency, Libra, several years ago.
He also noted that Elon Musk — who in a November post on X said, “Delete CFPB. There are too many duplicative regulatory agencies” — wants to turn the social media site formerly known as Twitter into a payments platform.
“I think it’s reasonable for Americans to wonder why he is targeting this little agency. And I think a lot of the opposition is coming from tech conglomerates, because … the agency has been a speed bump in their plans,” he said.
There has been at least one enforcement that Vought said the CFPB will pursue — a lawsuit against online lender MoneyLion, which was accused by the agency in 2022 of violating the Military Lending Act by overcharging on loans to service members and their dependents. MoneyLion has denied the allegations.
The Associated Press and Bloomberg contributed to this report.
Nike is cutting about 1,400 jobs in its operations division, mostly from its technology department, the company said Thursday.
In a note to employees, Venkatesh Alagirisamy, the chief operating officer of Nike, said that management was nearly done reorganizing the business for its turnaround plan, and that the goal was to operate with “more speed, simplicity and precision.”
“This is not a new direction,” Mr. Alagirisamy told employees. “It is the next phase of the work already underway.”
Nike, the world’s largest sportswear company, is trying to recover after missteps led to a prolonged sales slump, in which the brand leaned into lifestyle products and away from performance shoes and apparel. Elliott Hill, the chief executive, has worked to realign the company around sports and speed up product development to create more breakthrough innovations.
In March, Nike told investors that it expected sales to fall this year, with growth in North America offset by poor performance in Asia, where the brand is struggling to rejuvenate sales in China. Executives said at the time that more volatility brought on by the war in the Middle East and rising oil prices might continue to affect its business.
The reorganization has involved cuts across many parts of the organization, including at its headquarters in Beaverton, Ore. Nike slashed some corporate staff last year and eliminated nearly 800 jobs at distribution centers in January.
“You never want to have to go through any sort of layoffs, but to re-center the company, we’re doing some of that,” Mr. Hill said in an interview earlier this year.
Mr. Alagirisamy told employees that Nike was reshaping its technology team and centering employees at its headquarters and a tech center in Bengaluru, India. The layoffs will affect workers across North America, Europe and Asia.
The cuts will also affect staffing in Nike’s factories for Air, the company’s proprietary cushioning system. Employees who work on the supply chain for raw materials will also experience changes as staff is integrated into footwear and apparel teams.
Nike’s Converse brand, which has struggled for years to revive sales, will move some of its engineering resources closer to the factories they support, the company said.
Mr. Alagirisamy said the moves were necessary to optimize Nike’s supply chain, deploy technology faster and bolster relationships with suppliers.
A bill that would have required insurers to offer coverage to homeowners who take steps to reduce wildfire risk on their property died in the Legislature.
The Senate Insurance Committee on Monday voted down the measure, SB 1076, one of the most ambitious bills spurred by the devastating January 2025 wildfires.
The vote came despite fire victims and others rallying at the state Capitol in support of the measure, authored by state Sen. Sasha Renée Pérez (D-Pasadena), whose district includes the Eaton fire zone.
The Insurance Coverage for Fire-Safe Homes Act originally would have required insurers to offer and renew coverage for any home that meets wildfire-safety standards adopted by the insurance commissioner starting Jan. 1, 2028.
It also threatened insurers with a five-year ban from the sale of home or auto insurance if they did not comply, though it allowed for exceptions.
However, faced with strong opposition from the insurance industry, Pérez had agreed to amend the bill so it would have established community-wide pilot projects across the state to better understand the most effective way to limit property and insurance losses from wildfires.
Insurers would have had to offer four years of coverage to homeowners in successful pilot projects.
Denni Ritter, a vice president of the American Property Casualty Insurance Assn., told the committee that her trade group opposed the bill.
“While we appreciate the intent behind those conversations, those concepts do not remove our opposition, because they retain the same core flaw — substituting underwriting judgment and solvency safeguards with a statutory mandate to accept risk,” she said.
In voting against the bill Sen. Laura Richardson, (D-San Pedro), said: “Last I heard, in the United States, we don’t require any company to do anything. That’s the difference between capitalism and communism, frankly.”
The remarks against the measure prompted committee Chair Sen. Steve Padilla, (D-Chula Vista), to chastise committee members in opposition.
“I’m a little perturbed, and I’m a little disappointed, because you have someone who is trying to work with industry, who is trying to get facts and data,” he said.
Monday’s vote was the fourth time a bill that would have required insurers to offer coverage to so-called “fire hardened” homes failed in the Legislature since 2020, according to an analysis by insurance committee staff.
Fire hardening includes measures such as cutting back brush, installing fire resistant roofs and closing eaves to resist fire embers.
Pérez’s legislation was thought to have a better chance of passage because it followed the most catastrophic wildfires in U.S. history, which damaged or destroyed more than 18,000 structures and killed 31 people.
The bill was co-sponsored by the Los Angeles advocacy group Consumer Watchdog and Every Fire Survivor’s Network, a community group founded in Altadena after the fires formerly called the Eaton Fire Survivors Network.
But it also had broad support from groups such as the California Apartment Association, the California Nurses Association and California Environmental Voters.
Leading up to the fires, many insurers, citing heightened fire risk, had dropped policyholders in fire-prone neighorhoods. That forced them onto the California FAIR Plan, the state’s insurer of last resort, which offers limited but costly policies.
A Times analysis found that that in the Palisades and Eaton fire zones, the FAIR Plan’s rolls from 2020 to 2024 nearly doubled from 14,272 to 28,440. Mandating coverage has been seen as a way of reducing FAIR Plan enrollment.
“I’m disappointed this bill died in committee. Fire survivors deserved better,” Pérez said in a statement .
Also failing Monday in the committee was SB 982, a bill authored by Sen. Scott Wiener, (D-San Francisco). It would have authorized California’s attorney general to sue fossil fuel companies to recover losses from climate-induced disasters. It was opposed by the oil and gas industry.
Passing the committee were two other Pérez bills. SB 877 requires insurers to provide more transparency in the claims process. SB 878 imposes a penalty on insurers who don’t make claims payments on time.
Another bill, SB 1301, authored by insurance commissioner candidate Sen. Ben Allen, (D-Pacific Palisades), also passed. It protects policyholders from unexplained and abrupt policy non-renewals.
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Politicians in Washington and the reporters who cover them have an often adversarial relationship.
But on the last Saturday in April, they gather for an irreverent celebration of press freedom and the First Amendment at the Washington Hilton Hotel: The White House Correspondents’ Association dinner.
Hosted by the association, an organization that helps ensure access for media outlets covering the presidency, the dinner attracts Hollywood stars; politicians from both parties; and representatives of more than 100 networks, newspapers, magazines and wire services.
While The Times will have two reporters in the ballroom covering the event, the company no longer buys seats at the party, said Richard W. Stevenson, the Washington bureau chief. The decision goes back almost two decades; the last dinner The Times attended as an organization was in 2007.
“We made a judgment back then that the event had become too celebrity-focused and was undercutting our need to demonstrate to readers that we always seek to maintain a proper distance from the people we cover, many of whom attend as guests,” he said.
It’s a decision, he added, that “we have stuck by through both Republican and Democratic administrations, although we support the work of the White House Correspondents’ Association.”
Susan Wessling, The Times’s Standards editor, said the policy is a product of the organization’s desire to maintain editorial independence.
“We don’t want to leave readers with any questions about our independence and credibility by seeming to be overly friendly with people whose words and actions we need to report on,” she said.
The celebrity mentalist Oz Pearlman is headlining the evening, in lieu of the usual comedy set by the likes of Stephen Colbert and Hasan Minhaj, but all eyes will be on President Trump, who will make his first appearance at the dinner as president.
Mr. Trump has boycotted the event since 2011, when he was the butt of punchlines delivered by President Barack Obama and the talk show host Seth Meyers mocking his hair, his reality TV show and his preoccupation with the “birther” movement.
Last month, though, Mr. Trump, who has a contentious relationship with the media, announced his intention to attend this year’s dinner, where he will speak to a room full of the same reporters he often derides as “enemies of the people.”
Times reporters will be there to document the highs, the lows and the reactions in the room. A reporter for the Styles desk has also been assigned to cover the robust roster of after-parties around Washington.
Some off-duty reporters from The Times will also be present at this late-night circuit, though everyone remains cognizant of their roles, said Patrick Healy, The Times’s assistant managing editor for Standards and Trust.
“If they’re reporting, there’s a notebook or recorder out as usual,” he said. “If they’re not, they’re pros who know they’re always identifiable as Times journalists.”
For most of The Times’s reporters and editors, though, the evening will be experienced from home.
“The rest of us will be able to follow the coverage,” Mr. Stevenson said, “without having to don our tuxes or gowns.”
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