Arkansas and 43 state regulators settle with ACI Payments Inc. for unauthorized transactions from Mr. Cooper customer accounts
State regulators and state attorneys general levy combined fines of $20 million for data misuse impacting 480,000 consumers nationwide
Little Rock, Arkansas (October 17, 2023) – The Arkansas Securities Department and 43 other state agencies have reached settlements with ACI Payments Inc., for 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 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.
ACI Payments, a subsidiary of ACI Worldwide, is a state-regulated money services business licensed in Arkansas and nearly every other U.S. state (NMLS ID 936777). 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 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.”
Upon notification of the incident from ACI Payments, state regulators commenced a multistate money transmission investigation reviewing all aspects of the event, including investigating the facts and circumstances surrounding the erroneous transactions, evaluating consumer impact, analyzing the root cause of the incident, and evaluating the remedial steps taken by the company.
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.
State financial regulators license and supervise over 33,000 nonbank financial services companies through the Nationwide Multistate Licensing System (NMLS), including mortgage companies and money services businesses. Arkansas consumers can submit complaints about nonbank financial services companies by contacting 800-981-4429 or www.securities.arkansas.gov. Consumers can also verify that a company is licensed to do business in their state, and view past enforcement actions, by visiting NMLS Consumer Access.
Read the enforcement action which includes the list of participating states, here.
About Arkansas Securities Department The Arkansas Securities Department is charged with implementing and overseeing the Arkansas Securities Act, Arkansas Fair Mortgage Lending Act, the Arkansas Money Services Act, Arkansas Savings and Loan Act, and the Arkansas Credit Union Act, the Department regulates the sale of securities, securities brokerage firms and their agents, state-registered investment advisers and their representatives, mortgage loan companies and their loan officers, money services companies, as well as state-chartered credit unions and savings & loans. Our activities include registration, compliance, investigation of customer complaints, and consumer education.