Maryland reaches multistate $20 million settlement with mortgage servicing company over data breach

BALTIMORE, MD—Bayview Asset Management, LLC, a mortgage company, and three of its affiliates have agreed to a $20 million settlement with 53 state regulators following a 2021 data breach that affected 5.8 million customers nationwide, including 124,000 in Maryland. The settlement, announced by the Maryland Department of Labor’s Office of Financial Regulation, addresses deficient cybersecurity practices and compliance failures by Bayview and its affiliates: Lakeview Loan Servicing, Community Loan Servicing, and Pingora Holdings.

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The data breach, the first to be collectively enforced against a mortgage company by state regulators, exposed sensitive customer information. As part of the settlement, Bayview and its affiliates will pay Maryland $564,000 in fees and penalties.

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“In today’s digital economy, safeguarding sensitive consumer data is critically important,” said Maryland Labor Secretary Portia Wu, emphasizing the importance of collaborative enforcement in protecting consumers from cyber threats.

A multistate investigation led by California, North Carolina, Washington state, and Maryland found that Bayview’s cybersecurity practices did not meet federal or state requirements. The companies also failed to notify Maryland of the breach promptly, violating state regulations.

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“This settlement demonstrates how our office and our fellow state regulators work to ensure that companies protect consumers’ personal information,” said Maryland Commissioner of Financial Regulation Tony Salazar. “State-licensed financial service providers must comply with regulators’ requirements, and we will take action if we believe they are failing to do so.”

The settlement mandates that Bayview and its affiliates rectify cybersecurity deficiencies, enhance their information technology systems, undergo independent assessments, and provide three years of additional reporting to the states. This settlement sets a precedent for future enforcement actions related to data breaches and cybersecurity lapses in the financial industry.

This article was written with the assistance of AI and reviewed by a human editor.

Photo by Sora Shimazaki from Pexels

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