CFPB Cites ACI Worldwide in $2 Billion ‘Mortgage Fiasco’

America’s consumer finance regulator has fined ACI Worldwide for processing more than $2 billion in unauthorized mortgage payments.

The Consumer Finance Protection Bureau (CFPB) said Tuesday it had fined ACI $25 million over transactions that happened in 2021 and impacted close to half a million homeowners with mortgages serviced by a company known as Mr. Cooper.

“The CFPB’s investigation found that ACI perpetrated the 2021 Mr. Cooper mortgage fiasco that impacted homeowners across the country,” CFPB Director Rohit Chopra said in a news release. “While borrower accounts have now been fixed, we are penalizing ACI for its unlawful actions that created headaches for hundreds of thousands of borrowers.”

ACI said in a statement Tuesday that it consented to the CFPB order but did not admit or deny responsibility, and said the unauthorized transactions happened during a test of the company’s Speedbay bill payment platform.

“At the time, Speedpay was a recently acquired addition to ACI’s portfolio, and the inadvertent transmission occurred shortly after the Company assumed management of Speedpay’s legacy data environment,” ACI said.

The company added an in-house review found that ACI’s policies and procedures were not followed. ACI says it undertook “swift action” to reverse the ACH entries and prevent any consumer loss, and that consumers’ money and personal information was always safe.

“The settlement of a consumer class action arising out of the error was approved in court last month,” the statement said. “ACI expects most of the costs will be covered by third parties in both matters.”

The CFPB says that ACI improperly used actual consumer data, instead of dummy data, thus unlawfully initiating more than $2.3 billion in payments.

The agency’s fine against ACI comes weeks after Chopra testified before Congress, noting that inflation had led to rising levels of household debt.

“Americans now owe $17 trillion in household debt, including mortgages, student loans, auto loans, and credit cards,” he said. “Interest rates are substantially higher than they were a few years ago, and some families are paying much more on their credit cards and other loans.”

Meanwhile, PYMNTS noted last month that a large number of consumers have abandoned their plans to buy homes.

“Inflation’s loosening grip has yet to significantly bring down the cost of essential goods, where consumers spend an average 22% of their income,” that report noted. “While the dwindling numbers of consumers believing homeownership is out of their reach are significant, they may also be realistic.”