Bank Nerd Corner: Liability, Loopholes, and 2025 Crystal Balls

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Jan 15, 2025

The CFPB has launched a significant lawsuit against major banks and Zelle for alleged fraud protection failures, raising questions about consumer safety and accountability. Legal cases are causing a stir in regulatory agencies, leading to potential shifts in banking rules. The discussion also touches on the challenges of transparency in digital banking, with fine print complicating liability. Additionally, bold predictions for 2025 include possible mergers and the prospect of fintechs obtaining bank charters, suggesting a transformative year ahead.

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ANECDOTE

Holiday Activities

Alex Johnson got a pizza oven and griddle for Christmas and spent the holidays cooking.
Kiah Haslett practiced her chopstick skills over the holidays as part of her New Year's resolution.

ANECDOTE

Podcast Anniversary

Kiah Haslett and Alex Johnson celebrate the third anniversary of their podcast, Fintech Takes.
Johnson recounts how the podcast began, initiated by his interest in Haslett's banking knowledge.

INSIGHT

CFPB Lawsuit

The CFPB is suing major banks and Early Warning Services (EWS) over Zelle fraud, alleging inadequate consumer protections.
The CFPB argues banks are responsible for lax ID verification, inadequate data sharing, poor fraud investigation, and improper reimbursement denials.

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Hello, and welcome back to Bank Nerd Corner, the first Bank Nerd Corner of 2025. I’m Alex Johnson, joined as always by the brilliant Kiah Haslett, Banking and Fintech Editor at Bank Director.

Here’s what we’re unpacking this week.

First up, the CFPB has sued the biggest names in banking—Bank of America, Wells Fargo, JPMorgan Chase—along with Early Warning Services (EWS), the backbone of Zelle, for allegedly dropping the ball on fraud protections. With over $870M lost to scams since 2017, we’re asking: Are banks scapegoats for a bigger mess involving social media and telecoms? Ultimately, how much consumer protection is enough—and who pays the price?

Next up, two cases—Loper Bright (aka Loper Bright Enterprises v. Raimondo) and Jarkesy (aka SEC v. Jarkesy)—are shaking up regulatory agencies like the Fed and FDIC. Are we going to see a power shift or a regulatory takedown? If the Fed blinks first, do banks get to rewrite the rules—and does "too big to fail" become DIY?

Then there’s the disclosure debate. Can companies like Zelle or the FDIC "warn away" liability with fine print? If streamlined experiences make users vulnerable, will regulators demand clearer disclosures? Is it the end of seamless user experience...and trust as we know it?

Finally, don’t miss our 2025 predictions. Could Capital One acquiring Discover signal a regulatory shift favoring big bank M&A? Will a fintech actually grab a bank charter this year?

Oh hello, New Year; you’re going to be wild! 🤙

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