Product: Money transfer, virtual currency, or money service

Defendants could have taken numerous steps, both individually and collectively, to prevent much of the harm to consumers. In addition to failing their customers, Defendants actions and failures to act violated Federal consumer financial law.

13. The Bureau brings this action against Defendants under 1054 and 1055 of the Consumer Financial Protection Act of 2010 ( CFPA ), 12 U.S.C. 5564 and 5565 and 918 ( a ) of the Electronic Fund Transfer Act ( EFTA ), 15 U.S.C. 1693o ( a ) ( 5 ) to obtain permanent injunctive relief, redress for affected consumers and an appropriate penalty, and to obtain all other appropriate relief for Defendants violations of Federal consumer financial law.

JURISDICTION & VENUE 14. This Court has subject-matter jurisdiction over this action because it is brought under Federal consumer financial law, 12 U.S.C. 5565 ( a ) ( 1 ), presents a federal question, 28 U.S.C. 1331, and is brought by an agency of the United States, 28 U.S.C.

1345.

15. The Court has personal jurisdiction over Defendants in this action because each Defendant conducts business in this District. In addition, XXXX, which is owned in part by Defendant Banks, is headquartered in Arizona.

16. Venue is proper in this District under 12 U.S.C. 5564 ( f ) because each Defendant is located, resides, or is doing business in this District.

PARTIES 17. The Bureau is an independent agency of the United States charged with regulating the offering and provision of consumer financial products and services under Federal 5 Case 2:24-cv-03652-SMB Document 1 Filed XX/XX/XXXX Page 6 of 91 consumer financial law. 12 U.S.C. 5491 ( a ). The Bureau has independent litigating authority to enforce Federal consumer financial law, including the CFPA, EFTA, and its implementing Regulation E. 12 U.S.C. 5564 ( a ) - ( b ), 5565, 5481 ( 12 ) ( C ), ( 14 ).

18. XXXX is a financial technology and consumer reporting company headquartered in XXXX, Arizona. It is co-owned by seven of the largest banks in the United States : XXXX XXXX XXXXXXXX, XXXX, Wells Fargo, XXXX XXXX, XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX designed and operates the XXXX network and the XXXX XXXX. In XXXX, XXXX had total revenue of approximately {$420.00} XXXX, about {$200.00} XXXX of which came from XXXX. 
XXXX XXXX XXXX  XXXX is a national bank and subsidiary of XXXX XXXX XXXXXXXX XXXX, headquartered in XXXX, North Carolina. As of XX/XX/XXXX, XXXX XXXX XXXXXXXX had {$2.00} XXXX in consolidated total assets, making it an insured depository institution with assets greater than {$10.00} XXXX within the meaning of 12 U.S.C.

5515 ( a ). As detailed below, in paragraphs 25 to 27, XXXX XXXXXXXX XXXX exercises control over XXXX and XXXX, and it is one of the largest participating financial institutions in the XXXX network. XXXX XXXX XXXX maintains a significant retail banking operation in this District, with at least 107 branch locations in Arizona. XXXX XXXX XXXXXXXX received at least 29,289 complaints from Arizona customers about its XXXX services from XX/XX/XXXX, to XX/XX/XXXX, 202374 % of which related to fraud. 
XXXX. XXXX is a national bank and subsidiary of XXXX XXXX XXXX XXXX with a main office in XXXX, Ohio. As of XX/XX/XXXX, XXXX had {$3.00} XXXX in consolidated total assets, making it an insured depository institution with assets greater 6 Case 2:24-cv-03652-SMB Document 1 Filed XX/XX/XXXX Page 7 of 91 than {$10.00} billion within the meaning of 12 U.S.C. 5515 ( a ). As detailed below, in paragraphs 25 to 27, XXXX exercises control over XXXX and XXXX, and it is the largest participating financial institution in the XXXX network. XXXX maintains a significant retail banking operation in this District, with at least 193 branches in Arizona. XXXX received at least 40,054 complaints from Arizona customers about its XXXX services from XX/XX/XXXX, to XX/XX/XXXX, 202366 % of which related to fraud. 
XXXX. Wells Fargo is a national bank and subsidiary of Wells Fargo & Company headquartered in XXXX XXXX, South Dakota. As of XX/XX/XXXX, Wells Fargo had approximately {$1.00} XXXX in consolidated total assets, making it an insured depository institution with assets greater than {$10.00} XXXX within the meaning of 12 U.S.C. 5515 ( a ).

As detailed below, in paragraphs 25 to 27, Wells Fargo exercises control over XXXX and XXXX, and it is XXXX of the largest participating financial institutions in the XXXX network. 
Wells Fargo maintains a significant physical presence in the District, including 155 branches in Arizona. Wells Fargo received at least XXXX complaints from Arizona customers about its XXXX services from XXXX launch to XX/XX/XXXX, 202371 % of which related to fraud.

22. Defendants are covered persons under the CFPA because they offer and provide funds transmission and payment or other financial data processing services through the XXXX XXXX, which are consumer financial products and services offered or provided for use by consumers primarily for personal, family, or household purposes. 12 U.S.C.

5481 ( 5 ), ( 6 ) ( A ), 15 ( A ) ( iv ), ( vii ).

7 Case 2:24-cv-03652-SMB Document 1 Filed 12/20/24 Page 8 of 91 23. Defendants XXXX XXXX XXXX XXXXXXXX, and Wells Fargo, as national banks holding consumer deposit accounts, are also financial institutions subject to EFTA and Regulation E. 15 U.S.C. 1693a ( 9 ) ; 12 C.F.R. 1005.2 ( i ).

FACTUAL ALLEGATIONS I. BACKGROUND A. Defendants Created XXXX, a Bank Peer-to-Peer System 24. Defendants launched XXXX in XXXX to compete with non-bank peer-to-peer payment networks such as XXXX XXXX and XXXX, and XXXX XXXX now one of the countrys most widely available peer-to-peer networks. 
25. The network is owned and operated by XXXX, which, in turn, is owned by seven major banks, including Defendant Banks. 
XXXX XXXX XXXX XXXX XXXXXXXX, and Wells Fargo each have one of seven votes on XXXX XXXX Management Committee ( recently renamed the XXXX XXXX ), which makes ultimate decisions regarding the XXXX network. The management committee sets rules for the XXXX network which govern how banks and credit unions offer XXXX. These rules include how participating financial institutions must authenticate users seeking to enroll in the XXXX service ; what information participating financial institutions must report to XXXX about fraud and misdirected transfers ; and when participating financial institutions must reimburse consumers for fraud or misdirected transfers. XXXX is responsible for enforcing these rules and assessing fines if participating financial institutions fail to comply.