Business
Wells Fargo, Chase, Bank of America sued over alleged unchecked fraud on Zelle app
Wells Fargo, JP Morgan Chase and Bank of America are being sued by the embattled Consumer Financial Protection Bureau over alleged unchecked fraud on the Zelle payment app — setting up a legal showdown that the incoming Trump administration could quash as soon as next month.
The three financial institutions, which co-own the app along with four other large banks, were accused in a lawsuit filed Friday of rushing to launch the service in 2017 without putting in place proper consumer safeguards in order to compete with popular payment apps such as Venmo. The result, according to the lawsuit, were fraud-related losses of more than $870 million over the last seven years.
“Zelle became a gold mine for fraudsters, while often leaving victims to fend for themselves,” said CFPB Director Rohit Chopra.
The 91-page federal lawsuit claimed that hundreds of thousands of consumers at the three banks made complaints about being defrauded but were “were largely denied relief, and some were even told to try getting their money back by contacting the person who had defrauded them.” The CFPB said the three banks accounted for 73% of Zelle activity last year.
The lawsuit was immediately attacked by Early Warning Services, which operates the app on behalf of the banks, as “legally and factually flawed” and claimed the lawsuit could be counterproductive by “incentivizing” criminals to make bogus fraud claims that institutions would have to pay — raising the app’s costs and driving away credit unions and community and minority-owned banks offering Zelle. Some 2,200 financial institutions use the service.
“Zelle is relied upon by 143 million enrolled American consumers and small businesses, and we are fully prepared to defend this meritless lawsuit to ensure their service does not suffer,” said Jane Khodos, a spokesperson for Early Warning, which was also named as a defendant.
Bank of America, in its own statement, said that “more than 99.95 percent of transactions across the Zelle network go through without incident. When a client has an issue, we work directly with them.”
JP Morgan Chase also denied the allegations and alluded to political overtones raised by Early Warning, saying the CFPB’s action was a “last ditch effort in pursuit of their political agenda.” Wells Fargo did not return messages for comment.
The CFPB, established in 2011 in the aftermath of the financial crisis, has long been criticized by Republicans as a “runaway” agency whose actions are heavy handed and stifle economic growth.
The first Trump administration sought to rein in the bureau and redrafted proposed rules aimed at tightening regulations on payday lenders. Consumer advocates considered the final regulations watered down. The new Trump administration could terminate the Zelle lawsuit when it takes power next month.
Some critics want to abolish the agency altogether. Billionaire Elon Musk, who is leading an effort to streamline the federal government through the so-called Department of Government Efficiency, or DOGE, criticized the agency in a November post on X that said, “ Delete CFPB. There are too many duplicative regulatory agencies.”
Earlier this year, the Supreme Court turned down an effort by a payday lending trade group to declare the bureau’s structure unconstitutional because it is funded by bank fees instead of congressional appropriations.
The bureau, which boasts it has gotten consumers more than $21 billion in relief, has stepped up its enforcement actions recently ahead of the change in administrations.
On Monday, it filed separate lawsuits against Walmart and Rocket Mortgage over alleged financial wrongdoing. And earlier this month issued landmark rules that could lower the costs of bank overdrafts to as little as $5.
Separately, the Federal Trade Commission, led by outgoing chair Lina Khan, sued Los Angeles cash app Dave Inc. last month, accusing it of misleading its financially vulnerable customers about fees it charges and the amount of money it gives out. The company denies the allegations.
The CFPB in its lawsuit claimed that without adequate safeguards Zelle allows fraudsters to create multiple email addresses and mobile phone numbers in signing up for the service that it can link to the same or different bank accounts, leaving consumers unaware of who they are sending their money to.
It claimed the banks allowed repeat offenders to hop between banks, with the banks not sharing information about fraudsters and acting too slowly to restrict or track criminals. It also claimed that it did not act on the hundreds of thousands of complaints they received to prevent further fraud.
In response, Early Warning claimed it has “highly effective multi-layered fraund and scam prevention measures” that in 2023 resulted in reports of frauds and scams decreasing by nearly 50% despite a 27% increase in transaction volume.
The company said it had made “every effort to engage and cooperate” with the bureau before the lawsuit was filed, which it said is part of the agency’s “pattern and practice of regulatory overreach.”
The bureau’s lawsuit was applauded by the National Consumer Law Center, which said, “The CFPB is standing up for people who weren’t able to get the big banks to take their claims of fraud seriously and return their hard-earned money. The CFPB helps ordinary people who’ve been hurt by big banks.”
Sen. Elizabeth Warren, who spearheaded the creation of the agency, came to its defense last week and called on Trump to work with the agency to help American families by temporarily capping credit card interest rates at 10% — a pledge he made on the campaign trail.
“That would be a real boost for millions of families across this country,” the Massachusetts Democrat said. “If he’s true to his word here, and I think we ought to take them at his word, then the CFPB can help him do that.”
Business
Disneyland Resort President Thomas Mazloum named parks chief
Disneyland Resort President Thomas Mazloum has been named chairman of Walt Disney Co.’s experiences division, the company said Tuesday.
Mazloum succeeds soon-to-be Disney Chief Executive Josh D’Amaro as the head of the Mouse House’s vital parks portfolio, which has become the economic engine for the Burbank media and entertainment giant. His purview includes Disney’s theme parks, famed Imagineering division, merchandise, cruise line, as well as the Aulani resort and spa in Hawaii.
Jill Estorino will become the head of Disneyland Resort in Anaheim. She previously served as president and managing director of Disney Parks International and oversaw the company’s theme parks and resorts in Europe and Asia.
Estorino and Mazloum will assume their new roles on March 18, the same day as D’Amaro and incoming Disney President and Chief Creative Officer Dana Walden.
“Thomas Mazloum is an exceptional leader with a genuine appreciation for our cast members and a proven track record of delivering growth,” D’Amaro said in a statement. “His focus on service excellence, broad international leadership and strong connection to the creativity that brings our stories to life make him the right leader to guide Disney Experiences into its next chapter.”
Mazloum had been about a year into his tenure at Disneyland. Before that, he was head of Disney Signature Experiences, which includes the cruise line. He was trained in hospitality in Europe.
In his time at Disneyland, Mazloum oversaw the park’s 70th anniversary celebration and recently pledged to eliminate time limitations for park-hopping, which are designed to manage foot traffic at Disneyland and California Adventure.
Mazloum will now oversee a 10-year, $60-billion investment plan for Disney’s overall experiences business, which includes new themed lands in Disneyland Resort and Walt Disney World. At Disneyland, that expansion could result in at least $1.9 billion of development.
The size of that investment indicates how important the parks are to Disney’s bottom line. Last year, the experiences business brought in nearly 57% of the company’s operating income. Maintaining that momentum, as well as fending off competitors such as Universal Studios, is key to Disney’s continued growth.
In his new role, Mazloum will have to keep an eye on “international visitation headwinds” at its U.S.-based parks, which the company has said probably will factor into its earnings for its fiscal second quarter. At Disneyland Resort, that dip was mitigated by the park’s high percentage of California-based visitors.
Times staff writer Todd Martens contributed to this report.
Business
What soaring gas prices mean for California’s EV market
It has been a bumpy road for the electric vehicle market as declining federal support and plateauing public interest have eaten away at sales.
But EV sellers could soon receive a boost from an unexpected source: The war in Iran is pushing up gas prices.
As Americans look to save money at the pump, more will consider switching to an electric or hybrid vehicle. Average gas prices in the U.S. have risen nearly 17% since Feb. 28 to reach $3.48 per gallon. In California, the average is $5.20 per gallon.
Electric vehicles are pricier than gasoline-powered cars and charging them isn’t cheap with current electricity prices, but sky-high gas prices can tip the scales for consumers deciding which kind of vehicle to buy next.
“We probably will see an uptick in EV adoption and particularly hybrid adoption” if gas prices stay high, said Sam Abuelsamid, an auto analyst at Telemetry Agency. “The last time we had oil prices top $100 per barrel was early 2022 and that’s when we saw EV sales really start to pick up in the U.S.”
In a 2022 AAA survey, 77% of respondents said saving money on gas was their primary motivator for purchasing an electric vehicle. That year, 25% of survey respondents said they were likely or very likely to purchase an EV.
As oil prices cooled, the number fell to16% in 2025.
In California, annual sales of new light-duty zero-emission vehicles jumped 43% in 2022, according to the state’s Energy Commission. The market share of zero-emission vehicles among all light-duty vehicles sold rose from 12% in 2021 to 19% in 2022.
“Prior to 2022, we didn’t really have EVs available when we had oil price shocks,” Abuelsamid said. “But every time we did, it coincided with a move toward more fuel-efficient vehicles.”
Dealers are anticipating a windfall.
Brian Maas, president of the California New Car Dealers Assn., predicted enthusiasm for EVs will rebound across California if oil prices don’t come down.
“If prior gasoline price spikes are any indication, you tend to see interest in more fuel-efficient vehicles,” he said.
Rising gas prices could be a lifeline for EV makers at a time when federal support for green cars has been declining.
Under President Trump, a federal $7,500 tax incentive for new electric vehicles was eliminated in September, along with a $4,000 incentive for used electric vehicles.
In California, the zero-emission vehicle share of the total new-vehicle market was 22% through the first 10 months of 2025, then dropped sharply to 12% in the last two months of the year, according to the California Auto Outlook.
Meanwhile Tesla, the most popular EV brand in the country, has grappled with an implosion of its reputation with some consumers after its chief executive, Elon Musk, became one of Trump’s most vocal supporters and helped run the controversial Department of Government Efficiency.
Over the last several months, Ford, General Motors and Stellantis have pared back EV ambitions.
Other automakers, including Nissan, announced plans to stop producing their more affordable electric models.
The Trump administration has moved to roll back federal fuel economy standards and revoked California’s permission to implement a ban on new gas-powered car sales by 2035.
David Reichmuth, a researcher with the Clean Transportation program in the Union of Concerned Scientists, said the shift in production plans will affect EV availability, even if demand surges.
That could keep people from switching to cleaner vehicles regardless of higher gas prices.
“This is a transition that we need to make for both public health and to try to slow the damage from global warming, whether or not the price of gasoline is $3 or $5 or $6 a gallon,” he said.
According to Cox Automotive, new EV sales nationally were down 41% in November from a year earlier. Used EV sales were down 14% year over year that month.
To be sure, oil prices can fluctuate wildly in times of uncertainty. It will take time for consumers to decide on new purchases.
Brian Kim, who manages used car sales at Ford of Downtown LA, said he has yet to see a jump in the number of people interested in EVs, hybrids or more fuel-efficient gas-powered engines.
Still, if the price at the pump stays stuck above its current level, it could happen soon.
“Once the gas prices hit six [dollars per gallon] or more and people feel it in their pocket, maybe things will start to change,” he said.
Business
Nearly 60 gigawatts of U.S. clean power stalled, trade group finds
A total of 59 gigawatts of U.S. clean energy projects are facing delays at a time when demand for power from AI data centers is surging, according to a trade group study.
Developers are seeing an average delay of 19 months over issues such as long interconnection times, supply constraints and regulatory barriers, the American Clean Power Assn. said in a quarterly market report.
The backlog is happening despite the growing need for power on grids that are being taxed by energy-hungry data centers and increased manufacturing. The Trump administration has implemented a slew of policies to slow the build-out of solar and wind projects, including delaying approvals on federal lands.
The potential energy generation facing delays is the equivalent of 59 traditional nuclear reactors, enough to power more than 44 million homes simultaneously.
“Current policy instability is beginning to impact investor confidence and negatively impact project timelines at a time when demand is surging,” American Clean Power Chief Policy Officer JC Sandberg said in a statement.
Despite the hurdles, developers were able to bring more than 50 gigawatts of wind, solar and batteries online in 2025, accounting for more than 90% of all new power capacity in the U.S., the report found. Clean power purchase agreements declined 36% in 2025 compared with 2024, signaling that the build-out of clean power in the U.S. could be lower in the 2028 to 2030 time period, according to the report.
Chediak writes for Bloomberg.
-
Wisconsin1 week agoSetting sail on iceboats across a frozen lake in Wisconsin
-
Massachusetts1 week agoMassachusetts man awaits word from family in Iran after attacks
-
Pennsylvania6 days agoPa. man found guilty of raping teen girl who he took to Mexico
-
Detroit, MI5 days agoU.S. Postal Service could run out of money within a year
-
Miami, FL7 days agoCity of Miami celebrates reopening of Flagler Street as part of beautification project
-
Sports6 days agoKeith Olbermann under fire for calling Lou Holtz a ‘scumbag’ after legendary coach’s death
-
Virginia7 days agoGiants will hold 2026 training camp in West Virginia
-
Culture1 week agoTry This Quiz on the Real Locations in These Magical and Mysterious Novels