The Arkansas Securities Department announced it has reached a settlement with ACI Payments Inc. for its role in erroneously initiating electronic withdrawals totaling $2.3 billion from the accounts of 480,000 mortgage-holders serviced by Mr. Cooper, formerly known as Nationstar Mortgage LLC.
State regulators in 43 states levied $10 million in fines through a multistate enforcement action led by regulators from Arkansas, Connecticut, Maryland, and Texas with support from the Conference of State Bank Supervisors. Additionally, 50 attorneys general, including Arkansas Attorney General Tim Griffin, levied $10 million in fines to ACI in coordination with state regulators.
“This case represents an important benchmark for the industry,” said Arkansas Securities Commissioner Susannah T. Marshall. “ACI Payments’ failure to protect consumer information created hardship for 2,827 Arkansans, and with this case, we are sending a message to the industry that companies must be committed to safeguarding personal information and meeting consumers’ rightful expectations of data privacy.”
ACI Payments, a subsidiary of ACI Worldwide, is a state-regulated money services business licensed in Arkansas and nearly every other state. Mr. Cooper offered ACI’s Speedpay product for its customers to schedule their monthly mortgage payments, enabling automatic transfers of authorized mortgage payments from their personal bank accounts to Mr. Cooper.
The violations occurred when ACI Payments erroneously used live customer data in a test of its Speedpay platform, causing unexpected and sometimes multiple mortgage payments from customer accounts. In some cases, these transactions exposed consumers to overdraft or insufficient funds fees.
This enforcement action orders the following of ACI Payments Inc.:
- Risk and compliance programs – Maintain a comprehensive enterprise risk management program and a third-party risk management program tailored to the nature, size, complexity, and risk profile of ACI.
- Agreement monitoring – Regular reporting (for two years) to a state regulator monitoring committee to ensure both the adequacy of the risk management programs and compliance with the order.
- Administrative costs and penalties – Payment of $10 million in fines for administrative costs and penalties.