ACI Worldwide fined $25 million for multibillion-dollar mortgage payment 'fiasco'

(Reuters) - The top U.S. consumer finance watchdog on Tuesday said it had fined the Nebraska payment processor ACI Worldwide $25 million for improperly processing more than $2 billion in mortgage payment transactions without customer authorization.

The transactions occurred in April 2021 and affected nearly 500,000 homeowners with mortgages serviced by Mr. Cooper, exposing many to overdraft and insufficient funds fees, according to the Consumer Financial Protection Bureau.

"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 statement, adding that customer accounts had since been fixed but that the agency was penalizing the company for inconveniencing hundreds of thousands of borrowers.

ACI Worldwide consented to the CFPB order without admitting or denying responsibility.

In a statement, the company said the erroneous transactions had occurred after it took control of a newly acquired electronic payments platform and that consumer funds and data were safe at all times. A consumer class action over the incident had been settled last month, it said.

According to the CFPB, during a test of the payments platform in April 2021, ACI improperly used actual consumer data, rather than dummy data, which illegally initiated more than $2.3 billion in payments.

At one bank, more than 60,000 accounts were debited more than $330 million the following morning, with about 7,300 account balances reduced by more than $10,000.

(Reporting by Douglas Gillison; Editing by Chizu Nomiyama)