Maryland Settles with ACI Worldwide for Unauthorized Mortgage Transactions from Customer Accounts

Maryland was one of the lead negotiators in the multistate settlement

BALTIMORE, MD (October 31, 2023) – The Maryland Department of Labor along with 43 state agencies across the nation announced a legal settlement with ACI Worldwide for erroneously initiating electronic transactions for mortgage loans serviced by Mr. Cooper (formerly known as Nationstar Mortgage, LLC) from the accounts of 480,000 consumers throughout the United States.

“We want all Maryland businesses and residents to understand the Maryland Office of Financial Regulation is committed to keeping their financial assets and money safe,” said Maryland Department of Labor Secretary Portia Wu. “By upholding our standards, Maryland will collaborate with our sister states to protect consumers and maintain proper business processes.”

State regulators levied $10 million in fines while forcing the company to settle through a multistate enforcement action led by the Maryland Office of Financial Regulation and regulators from Arkansas, Connecticut, and Texas, with support from the Conference of State Bank Supervisors. Additionally, several state attorneys general, including Maryland’s Office of the Attorney General, coordinated with state financial regulators and levied an additional $10 million in fines against ACI Payments, for a combined total of $20 million.

In Maryland, the settlement requires more than $216,000 to be paid as a monetary penalty and that the company must reimburse the Office of Financial Regulation for administrative costs. As part of this settlement, in addition to the payment of fines and penalties, the states require corrective action and an agreement to change future company practices to process loan payments.

Through the state-regulated payment processor ACI Worldwide, Mr. Cooper offered the ACI Speedpay product for its customers to schedule their monthly mortgage payments. This product enabled 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. ACI Payments and Mr. Cooper have since remedied all known monetary harm to approximately 14,000 Maryland consumers.

“This settlement demonstrates one of the core responsibilities of state regulators,” said Maryland’s Commissioner of Financial Regulation, Antonio P. ‘Tony’ Salazar. “Our goals are to protect Maryland consumers by ensuring financial institutions administer proper risk management, information security, training, and testing procedures to keep Marylanders’ banking information and personal data safe.”

The Maryland Office of Financial Regulation within the Maryland Department of Labor supervises the activities of money transmitters, payment processors, and mortgage lenders and servicers through periodic examinations, monitoring programs, and coordination of efforts with other states. The office protects Marylanders as they conduct their financial transactions through safe, sound, and well-managed institutions that comply with state and federal laws.

Maryland consumers can submit complaints to the Office of Financial Regulation about financial services companies, verify that a company is licensed to do business in Maryland and view past enforcement actions by visiting labor.maryland.gov/finance.

The Department of Labor strives to create an equitable and inclusive Maryland where all residents have the opportunities and resources to attain financial stability, reach their career potential, and contribute to their communities; where businesses have access to capital and the skilled workforce they need to succeed; where workplaces are safe and well-regulated; and where the economy is resilient and growing. For updates and information, follow Labor on LinkedIn, Twitter, Facebook, and visit our website.

MEDIA CONTACT:
Jamie Mangrum