The Ohio Department of Commerce’s Division of Financial Institutions and 43 other state financial agencies have reached settlements with ACI Payments, Inc., for erroneously initiating electronic transactions totaling $2.3 billion from the accounts of 480,000 mortgage-holders serviced by Mr. Cooper (formerly known as Nationstar Mortgage, LLC).
Approximately 13,000 customers were from Ohio. 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 state attorneys general, including the attorney general of Ohio, levied $10 million in fines to ACI, in coordination with state regulators.
Per the agreement, the Ohio Division of Financial Institutions will receive $216,136 in settlement funds and a portion of that will go towards grants, education, and outreach. For customers impacted, all transactions were reversed, and any money lost was recouped voluntarily by ACI Payments.
ACI Payments, a subsidiary of ACI Worldwide Corp., is a state-regulated money services business licensed in Ohio and nearly all other U.S. states (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.
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.
The 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.
State financial regulators license and supervise over 33,000 nonbank financial services companies through the Nationwide Multistate Licensing System (NMLS), including mortgage companies, money services businesses, consumer finance providers and debt collectors. Ohio consumers can submit complaints about mortgage products and nonbanking financial services companies to the Division of Financial Institutions’ Office of Consumer Affairs by calling 866.278.0003 or by completing an online complaint form. 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.