Aug 7 (Reuters) - The Consumer Financial Protection

Bureau (CFPB) is investigating major U.S. banks for their

handling of customer funds on the peer-to-peer payments platform

Zelle, the Wall Street Journal reported on Wednesday.

The probe focuses on JPMorgan ( JPM ), Bank of America ( BAC )

and Wells Fargo ( WFC ) among other large banks, the

report said, citing people familiar with the matter.

JPMorgan ( JPM ) last week had disclosed in a filing that it was

responding to the CFPB's inquiries regarding Zelle and was

considering whether to sue a U.S. consumer watchdog over the

agency's inquiries.

The proliferation of fraud and scams on Zelle, which is

owned by seven major banks including JPMorgan ( JPM ) and Bank of

America ( BAC ), has drawn attention from U.S. lawmakers including

Democratic Senator Elizabeth Warren and regulators concerned

about consumer protection.

Banks have argued that covering the cost of scams will

encourage more fraud and potentially cost billions of dollars.

Spokespeople for JPMorgan ( JPM ), Wells Fargo ( WFC ) and BofA declined to

comment. The CFPB did not immediately respond to Reuters'

request for comment.