Zelle payment app is under investigation, with JPMorgan (JPM.US) considering suing regulators.
JP Morgan (JPM.US) said on Friday it was considering whether to sue the US consumer watchdog over an investigation into the Zelle payment app.
The bank said it was responding to a Zelle inquiry from the Consumer Financial Protection Bureau (CFPB), which is owned by seven big banks including JPMorgan and Bank of America. Zelle, which has become the US's leading peer-to-peer payment network since its launch in 2017, is used by more than 100 million consumers through their Bank of America accounts.
The proliferation of fraud and scams on the Zelle website has raised concerns among US lawmakers and consumer protection regulators, including Senator Elizabeth Warren, a Democrat.
JPMorgan said the CFPB had given it two choices: settle or face enforcement action.
"The Company is evaluating its next steps, including litigation," the bank said in the filing.
A bank spokesperson said in another statement: "CFPB is fully aware that we have exceeded the legal requirements to reimburse all unauthorized transactions, even some types of fraud."
The spokesperson added that the CFPB "should anticipate being challenged to ensure their actions are within the law."
The CFPB declined to comment.
According to a report from the Senate Banking Committee, the rate at which JPMorgan, Bank of America and Wells Fargo reimbursed consumers for disputed fraudulent transactions fell to 38 per cent in 2023, down from 62 per cent in 2019.
Federal regulations require banks to reimburse customers for unauthorized payments, such as when their accounts are hacked. But in some cases, banks refuse to reimburse customers for payments they made in good faith.
JPMorgan's chief executive, Jamie Dimon, has previously told lawmakers that it is unfair to require banks to refund customers for fraudulent payments they authorized.
The bank has argued that covering fraud costs would encourage more fraud and could result in losses of tens of billions of dollars.