Bank of America in talks with regulator to resolve Zelle probe, evaluates litigation

(Reuters) -Bank of America said on Tuesday it is evaluating potential litigation over a U.S. consumer watchdog inquiry into the bank's processing of funds through the Zelle payment app.

The Consumer Financial Protection Bureau (CFPB) staff has initiated discussions with the bank to pursue a resolution of the inquiry or to file an enforcement action, BofA said in a regulatory filing.

Zelle has grown to become the leading U.S. peer-to-peer payment network since its launch in 2017. It is owned by seven major banks, including JPMorgan and BofA.

In August, JPMorgan also said it was mulling whether to sue the CFPB over inquires over Zelle.

Additionally, BofA disclosed that it had engaged with several federal regulators over certain aspects of its Bank Secrecy Act/anti-money laundering (BSA/AML) and sanctions compliance programs.

BSA is the common name for a series of laws and regulations in the U.S. to combat money laundering and terrorism financing.

BofA in cooperation with regulators plans to continue implementing enhancements to those programs. It does not expect the issues to have a "material adverse" financial impact on the bank.



The bank is in continuing discussions with the regulators, with the resolution of the inquiries likely to include one or more public orders by the regulators, it said.

Last month, a U.S. banking regulator found Wells Fargo's safeguards against money laundering and other illegal transactions were too lax. It has restricted the bank's ability to expand in risky businesses.

Source: Investing.com