Alston & Bird Consumer Finance Blog

MLO

Majority of States Now Permit Remote Work for MLOs and Mortgage Company Employees

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A&B Abstract:

On June 9, Illinois became the latest state in a growing trend to authorize remote work for mortgage loan originators and mortgage company employees. This makes five states joining the list of jurisdictions legislatively permitting MLOs to work remotely since Montana enacted similar legislation in March, with more states expected during the 2024 legislative sessions.

The Illinois amendments to The Residential Mortgage License Act of 1987, signed by Governor Pritzker on June 30, 2023, take effect on January 1, 2024 and specifies requirements that licensed MLOs must follow to allow employees to work from remote locations. These changes include:

  • Requiring the licensee to have written policies and procedures for supervising mortgage loan originators working from a remote location;
  • Restricting access to company platforms and customer information in accordance with the licensee’s comprehensive written information security plan;
  • Prohibiting in-person customer interactions at a mortgage originator’s residence unless the residence is a licensed location;
  • Prohibiting maintaining physical records at a remote location;
  • Requiring customer interactions and conversations about consumers to be in compliance with state and federal information security requirements.
  • Mandating mortgage loan originators working from a remote location to use a secure connection, either through a virtual private network (VPN) or other comparable system, to access the company’s system;
  • Ensuring the licensee maintains appropriate security updates, patches, or other alterations to devices used for remote work;
  • Requiring the licensee to be able to remotely lock, erase, or otherwise remotely limit access to company-related contents on any device; and
  • Designating the loan originator’s local licensed office as their principal place of business on the NMLS.

Nevada, Virginia, and Florida passed legislation resembling the Illinois law, mandating similar security, compliance, and surveillance requirements.

Temporary Guidance Ending

Remote work flexibility is now the majority stance for the industry. The four states mentioned above are the most recent since Montana passed similar legislation in March. Of the 53 U.S. jurisdictions tracked by the Mortgage Bankers Association (including Washington, D.C., Guam, and Puerto Rico), 30 have implemented permanent statutes or regulations allowing remote work, with 9 more jurisdictions still operating under temporary guidance permitting remote work.

Of the states still operating under temporary guidance, Oklahoma’s guidance expires December 31, 2023. The state government will need to take further action, whether legislative or regulatory, to continue to allow MLOs to work remotely. Louisiana issued temporary guidance in July 2020, which would stay active, “as long as there is a public health emergency relating to COVID-19, as declared by Governor Edwards of the State of Louisiana, or until rescinded or replaced.” Governor Edwards ended the emergency in March 2022 when he did not renew the expiring order. Remote work in Louisiana is now operating in a grey zone with regards to whether the temporary order is still in effect due to the, “until rescinded” language.

Different Methods, Similar Results

Although remote work is the new norm, states are taking different routes to allow MLOs to work remotely. Many statehouses passed legislative statutes, which allow for stable policies but can be difficult to revise through the legislative process. These statutes tend to follow similar structures and have similar requirements. Illinois, Virginia, Florida, and Nevada require MLOs to work from home so long as certain records are not maintained in remote locations, professionals do not meet with customers outside of licensed facilities, employees are properly supervised as required by the license, and the company maintains adequate cybersecurity measures to protect customer data.

Nebraska’s state legislature did not pass specific guidance regarding remote work for MLOs, but rather, passed authorization to allow the Nebraska Department of Banking and Finance to promulgate regulations allowing remote work for MLOs. The Department has not yet issued permanent guidance for local MLOs regarding remote work requirements. Although using the regulatory system to implement rules may take longer to implement, it is also more flexible to changing circumstances and generally permits regulators to revise guidance faster than it takes a state legislature to convene, draft, and pass appropriate amendments to existing legislation.

Takeaway

The post-COVID workforce is clinging onto the last bit of convenience that the pandemic forced upon us. Surveys show that remote work flexibility is now the primary perk that would drive people to different employers. Since the technology needed to safely conduct business remotely is now proven, states are realizing that the easiest way to retain qualified mortgage professionals is to allow remote work flexibility. The American Association of Residential Mortgage Regulators (AARMR) expressed concern over a lack of remote work options in 2022 before states started passing permanent legislation. State legislatures embraced AARMR’s concern that a lack of remote work options could cause professionals to leave the industry, further widening the access gap for already underserved communities. The remote work trend has touched other industries that were previously in-person only and is likely to grow in those other industries (e.g., remote notarization) as far as practically feasible.

* We would like to thank Associate, CJ Blaney, for their contributions to this blog post.

States Continue Trend Supporting Remote Work for MLOs and Mortgage Company Employees

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A&B ABstract:

Effective July 1, Montana will become the latest jurisdiction to codify authorization for mortgage loan originators and mortgage company employees to engage in remote work. That legislation follows a general trend over the past year – and, more so, since the early days of the COVID-19 pandemic – to allow remote operations.

No longer a temporary measure necessitated by pandemic lockdowns, remote work is increasingly acknowledged by regulators as an acceptable permanent option for today’s working environment. Last year, 18 jurisdictions took action to extend temporary permission for, or permanently authorize, the practice, and the trend continues in 2023.

Updates to the Montana Mortgage Act

On February 16, Montana Governor Greg Gianforte signed House Bill 30, substantively amending the Montana Mortgage Act and adding requirements relating to the conduct of mortgage business from a remote location. Specifically, the measure requires that each employee or independent contractor engaged in remote work:

  • Does not meet with the public at an unlicensed personal residence;
  • Does not maintain physical or electronic business records at the remote location;
  • Does not display any signage or advertising of the entity or the MLO at a remote location;
  • Takes reasonable precautions to protect confidential information in accordance with state and federal laws; and
  • Ensures that their NMLS records designate a properly licensed location as the MLO’s official workstation and a manager as a supervisor.

Further, the amended Act mandates that a licensed entity must:

  • Have written policies and procedures for working remotely, and supervise and enforce those policies and procedures;
  • Ensure that any device used to engage in the mortgage business has appropriate security, encryption, and device management controls to ensure the security and confidentiality of customer information;
  • Maintain its computer systems and customer information in accordance with its information technology security plan and all state and federal laws; and
  • Annually review and certify that its employees and independent contractors engaged in the mortgage business from remote locations meet specific requirements, and, upon request, provide the Department of Administration with written documentation of such review.

As discussed further below, the Montana measure follows a pattern established by other states, where remote work requirements have been established by regulatory guidance, and by temporary and then permanent legislation, since mid-2020.

Remote Work Authorization Trends 2020 to Present

The purpose of the legislative and regulatory guidance on remote work has changed since the spring of 2020. Remote work was already considered increasingly viable prior to the COVID-19 pandemic. Permissions and adaptations for remote work accelerated drastically with the onset of the pandemic in the spring of 2020. Today, guidance initially necessitated as an emergency response has become a permanent approach to regulating remote work in many states, enabling mortgage companies to take advantage of the benefits of a new mode of operations.

Throughout the evolution of the remote work trend, industry associations have stepped in to survey the regulatory choices being made across states and to recommend best practices. In July 2020, the Mortgage Bankers Association (“MBA”) issued a letter to the Conference of State Bank Supervisors addressing near- and long-term considerations for allowing remote work. Since that letter, there has been much activity across states in implementing permanent and temporary remote work authorization. In recognition of the significant changes to the mortgage business resulting from the new normal of remote work, on June 7, 2022, the American Association of Residential Mortgage Regulators (“AARMR”) issued guidance on best practices for permitting employees to work remotely.

In general, the guidance requires licensed mortgage entities to:

  1. Develop policies and procedures for adequate supervision of MLOs working remotely;
  2. Ensure that MLOs refrain from meeting with consumers in their homes (unless, if applicable, the MLO’s home is licensed as a branch);
  3. Ensure that MLOs use a VPN or similar system of authentication for access to the company’s secure origination system;
  4. Maintain and update security for devices used to access the company’s secure origination system;
  5. Ensure that MLOs refrain from storing physical business records at any location other than the company’s licensed main office; and
  6. Ensure that documents are available at a licensed location for regulators to conduct examinations.

The majority of legislation enacted, and guidance adopted, by jurisdictions reflects the framework set out by the MBA and AARMR.

State Response

Following the issuance of the MBA and AARMR guidance, several states have focused on effective implementation of key processes for remote operations. For example, jurisdictions including California, Kansas, Kentucky, Ohio, Pennsylvania, Rhode Island, Tennessee, and Washington require licensees to develop a written information security plan to ensure that the security goals for remote work are met.

States such as California provide specific requirements on the safeguards that must be included in the policy. In another common trend, California, the District of Columbia, Kentucky, Pennsylvania, Rhode Island, and Washington explicitly note that a remote location should not be advertised or represented to consumers as an operating location. Across states, licensees should ensure that consumer and licensee information and records remain accessible for regulatory oversight and exams.

2022 State Activity on Remote Work Authorization

In 2022, eight states (California, Kansas, Kentucky, Ohio, Pennsylvania (Amendment), Rhode Island, South Dakota, and Tennessee) enacted legislation addressing remote work. In addition to passing legislation, Pennsylvania enacted an amendatory measure and Rhode Island issued related guidance. Georgia, Oregon, and Washington adopted regulations implementing previous statutory measures. Finally, nine jurisdictions issued guidance, or extended temporary guidance, regarding remote operations: Colorado, the District of Columbia, Kansas, Maine, Oklahoma, Rhode Island, Vermont, West Virginia, and Wyoming.

As of February 2023,  there were significant developments in remote work guidance and legislation in Montana and California. Montana amended the Montana Mortgage Act to permit and establish the requirements for mortgage business employees to work remotely effective July 1, 2023. The California Department of Financial Protection and Innovation issued guidance permitting remote work by employees of a licensee under the California Residential Mortgage Lending Act.

Outliers and Special Considerations

Jurisdictions have not implemented remote work guidance uniformly. Mortgage companies and MLOs should be aware of unique requirements and restrictions in certain states.

Security and Data Privacy

Mortgage industry regulators and companies are particularly concerned with ensuring responsible handling of data and maintaining the security of company systems and consumer information in connection with remote operations. Reflecting this concern, California’s legislation requires companies to provide employees working remotely with appropriate equipment to perform the work and safeguard records and personal information. In addition to the prohibition on storing physical records at a remote location, California prohibits the receipt of business-related mail at a remote location.

Similarly, the new South Dakota and Rhode Island provisions on remote work mandate employee training on the confidentiality of conversations with, or relating to, consumers that are conducted from the remote location.

Location Requirements

Mortgage companies and MLOs should be aware of particular requirements for the location of an eligible remote work site. Pennsylvania expressly requires that the location where the remote work takes place is not owned or controlled by the licensee. Pennsylvania’s legislation would allow remote work from a location that is under the control of a subsidiary or affiliate of the licensee, if the location is only used by the licensee or on an incidental basis for consumer convenience. Note that under Pennsylvania’s provisions, in-person consumer interaction is permitted at a remote location if that location is not a personal residence.

Regulators may not apply all of these requirements as written. Rhode Island’s provisions include the requirement that the remote location be within a reasonable distance of the licensed place of business or branch location. Despite the text of the statute and regulations, the Department of Business Regulation issued regulatory guidance indicating that “MLOs are not required to live within a certain distance” of a main office or branch location. Instead, companies are required to provide proof of effective supervision of MLOs.

Supervisory Requirements

Some jurisdictions permit remote locations to be licensed as branches, even when the location is a personal residence. Georgia will consider a personal residence to be a branch and subject it to branch licensing requirements when the following conditions are met: (1) advertising the location as place of business; (2) receiving consumers; (3) maintaining physical files; or (4) arranging for the licensee to reimburse rent, utilities, or other expenses for the location. If none of the conditions are met, a personal residence that is a remote work location will not be considered a branch.

As an additional oversight measure, Kansas, Kentucky, and Tennessee require licensees to annually review and certify that employees engaged in remote work meet the applicable requirements under the relevant legislation.

Takeaways

As the Montana measure evidences, the trend towards authorizing and regulating remote work has not stopped in 2023. First, in January, the Nebraska and Virginia legislatures introduced bills related to allowing remote work. Second, more of the jurisdictions that in 2022 updated their remote work statutes are expected to adopt corresponding regulations or issue guidance to implement or supplement the new requirements for remote work authorization. For example, Vermont has announced that it will adopt regulations to implement the changes to its mortgage licensing statute that allow remote work in the coming months.

Further, some states that have not yet authorized remote work for MLOs and mortgage company employees have passed legislation authorizing remote work by employees of companies holding certain non-mortgage licenses. Colorado passed legislation in 2022 to permanently allow supervised lender licensees to work remotely. Colorado is one of the states that has also opted to extend temporary authorization for regulated entities that are not covered by the new legislation, including mortgage licensees into 2023. Based on the activity we have seen so far this year, and announcements regarding anticipated rulemaking activity, MLOs and mortgage company employees should expect future developments in this area.

* We would like to thank Associate, Rachel Myers, for their contribution to this blog post.

Federal and State Guidance Regarding the COVID-19 Pandemic

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A&B Abstract:

The Alston & Bird Consumer Finance team recognizes that this is a period of great uncertainty both for the nation and our clients. We have received numerous questions and concerns regarding what federal and state regulators are doing in light of the COVID-19 pandemic and how their response may affect day-to-day business. We have been monitoring both the federal and state guidance that has been released in response to the COVID-19 pandemic and have provided a summary of what has been released thus far.  We are continuing to monitor for new developments and will update this blog post accordingly.

Federal Guidance

Federal Administrative Agencies:

  • HUD/FHA: On March 18, 2020, HUD released Mortgage Letter 2020-4, which placed a foreclosure and eviction moratorium on all FHA-insured Single Family mortgages for a period of 60 days. The moratorium applies both to the initiation of foreclosures and to the completion of foreclosures in process.  Similarly, evictions of persons from properties secured by FHA-insured single-family mortgages are suspended for 60 days.  Deadlines of the first legal action and reasonable diligence timelines for Home Equity Conversion Mortgages are extended by 60 days.  In light of the broad language of the Mortgagee Letter, it does not appear that HUD intended to carve out vacant and abandoned properties from the foreclosure moratorium.  HUD has informally confirmed this interpretation.
  • USDA: On March 19, 2020, the USDA issued SFH Guaranteed Servicing Notice (March 19, 2019) which, effective immediately, provides that borrowers with USDA guaranteed loans are subject to a moratorium on foreclosure for a period of 60 days. The moratorium applies to the initiation of foreclosures and to the completion of foreclosures in process.  In addition, deadlines of the first legal action and reasonable diligence timelines are extended by 60 days. Similarly, evictions of persons from properties secured by USDA guaranteed loans are also suspended for a period of 60 days.
  • VA: On March 18, 2020, the VA issued Circular 26-20-8, which strongly encourages loan holders to establish a sixty-day moratorium beginning March 18, 2020, on completing pending foreclosures or imitating new foreclosures on loans.  Additionally, due to the widespread impact of COVID-19, loan holders should consider the impact of completing an eviction action when choosing to retain the property instead of conveying to VA.  VA requests holders not to expose Veterans and their families to additional risk through an eviction, if at all feasible.  Previously, on March 16, 2020, the VA issued Circular 26-20-7, which provides, in relevant part, that (1) lenders should have continuity of operation plans in place to support its ongoing ability to conduct business operations in the event of an interruption to business operations and processes; (2) servicers may employ the following relief to veterans impacted by COVID-19: (a) forbearance, (b) late charge waivers on affected loans, and (c) suspension of credit bureau reporting on affected loans; and (3) appraisers should continue to conduct business as outlined in Chapter 10 of the M26-7, Lenders Handbook.

Federal Government-Sponsored Entities:

  • Fannie Mae: Fannie Mae released a Bulletin for borrowers detailing its response to the COVID-19. Fannie Mae has placed a moratorium on foreclosure sales and evictions for sixty (60) days. In conjunction with the Bulletin, Fannie Mae also issued Lender Letter LL-2020-02, which sets forth guidance for lenders in responding to COVID-19.  The letter provides guidance for lenders concerning topics such as (1) forbearance plan eligibility for borrowers, (2) evaluating borrowers for mortgage modifications, (3) credit bureau reporting, and (4) suspension of foreclosure sales.
  • Freddie Mac: Freddie Mac released a Bulletin for mortgage servicers detailing its response to the COVID-19 and new guidelines for Freddie Mac mortgage servicers during the COVID-19 pandemic. Similar to Fannie Mae, the Bulletin provides guidance for lenders concerning topics such as (1) forbearance plan eligibility for borrowers, (2) evaluating borrowers for mortgage modifications, (3) credit bureau reporting, and (4) suspension of foreclosure sales.

State Guidance

State Legislatures:

  • Enacted Legislation and Executive Orders
    • District of Columbia: On March 17, 2020 Mayor Bowser signed the COVID-19 Response Emergency Amendment Act of 2020, which expires on June 15, 2020. The act provides for, among other things, a prohibition on evictions for as long D.C. is under a public health emergency.
    • New Hampshire: On March 17, 2020, New Hampshire Governor Christopher Sununu issued Emergency Order #4 pursuant to Executive Order 2020-04, which (1) prohibits an owner of non-restricted property or restricted property, as those terms are defined in RSA 540:1-a, from initiating eviction proceedings under RSA 540, and (2) prohibits all judicial and non-judicial foreclosure actions under RSA 479 or any other applicable law, rule or regulation, during the State of Emergency declared in Executive Order 2020-04.
    • New Jersey: The New Jersey Legislature passed Assembly Bill 3859, which allows the New Jersey governor to issue an executive order during a Public Health Emergency, pursuant to the New Jersey Emergency Health Powers Act, prohibiting the removal of any lessee, tenant, or homeowner from a residential property as the result of an eviction or foreclosure action.  Governor Philip Murphy subsequently issued Executive Order No. 106, which prohibits any lessee, tenant, homeowner or any other person from being removed from a residential property as a result of an eviction or foreclosure proceeding.
    • Kansas: On March 17, 2020, Governor Laura Kelly issued Executive Order No. 20-06, which orders all financial institutions operating in Kansas to temporarily suspend the initiation of any mortgage foreclosure efforts or judicial proceedings and any commercial or residential eviction efforts or judicial proceedings until May 1, 2020.
  • Pending Legislation
    • Massachusetts: The Massachusetts Legislature is considering House Docket No. 4935, which, if enacted, would impose a moratorium on evictions and foreclosures during the COVID-19 emergency.
    • Virginia: Currently, Virginia House Bill 340 is on Governor Northam’s desk, and he has until April 11th to take action on the bill. If passed, the bill would provide foreclosure and eviction protections for federal workers upon the closure of the federal government.

State Regulators:

In addition to state legislation and executive order, state regulators across the country have released guidance to regulated entities concerning the COVD-19 pandemic and indicating what the state regulators are doing in response. The Nationwide Multistate Licensing System (“NMLS”) has compiled state regulator guidance issued in response to COVID-19. The NMLS has posted this document to their website, and it is updated regularly. Below, we have included a summary of the information released by state regulators as of (March 20, 2020):

  • Alaska Department of Commerce, Community & Economic Development (“Department”): The Department posted guidance on its website stating that licensed mortgage-broker lenders may require licensed mortgage loan originators to work and undertaken licensed activities from home. The Department stated that it would not take administrative or other punitive action against a licensed mortgage loan originator or the sponsoring licensed company if the mortgage loan originator conducts activities requiring licensure from home. This guidance does not have an expiration date but is subject to revision.
  • Alabama State Banking Department (“Department”): The Department released guidance for any entity licensed by the Department. The Department instructed that licensees need to comply with all applicable statutes, regulations, and data security regulations. The Department noted that not all licenses may be able to work from home if their home location does comply with the applicable statutes, regulations, and data security regulations. This guidance does not have an expiration date but is subject to revision.
  • Arkansas Securities Department (“Department”): The Department released guidance for licensed mortgage loan companies, mortgage loan officers, and branch managers. The Department stated that mortgage loan companies may have mortgage loan officers work from home at unlicensed locations as long as state and federal data security standards are upkept. This guidance is in effect until June 1, 2020 but is subject to revision.
  • Colorado Department of Real Estate (“Department”): The Department released guidance that since Colorado law is silent as to the location at which mortgage loan originators are required to work. Therefore, the Department instructed that licensed mortgage loan originators may work from home. This guidance does not have an expiration date but is subject to revision.
  • Connecticut Department of Banking (“Department”): The Department released guidance for all consumer credit licensees. The Department is allowing consumer credit licensees to work from home during the CORVID-19 pandemic as long as the licensee follows applicable law, notifies the Department in writing, and that no licensable activity can take place at home with a member of the public. This guidance is in effect until April 30, 2020.
  • Iowa Division of Banking (“Division”): The Division released guidance for all entities that it regulates. The Division stated that all licensees may work from home during the CORVID-19 pandemic even if their home is an unlicensed office as long as appropriate data security measures are put into place. This guidance does not have an expiration date but is subject to revision.
  • Idaho Department of Finance (“Department”): The Department released guidance for all entities that it regulates. The Department is allowing licensed and registered entities to allow their employees to work from home even if that location is not a licensed location. Licensed and registered entities must keep up data security, may not advertise the unlicensed location as a licensed location, and may not meet with consumers or have consumers come to an unlicensed location. This guidance is in effect until June 30, 2020 but is subject to revision.
  • Indiana Department of Financial Institutions (“DFI”): The DFI issued temporary guidance offering licensees the ability to take precautions deemed necessary to avoid the risk of exposure or to comply with requirements of voluntary or mandated quarantines and is effective through June 30, 2020, unless otherwise modified or withdrawn.
  • Kansas Office of the State Bank Commissioner (“Commissioner”): The Commissioner released guidance for all entities that it regulates. The Commissioner is allowing licensed and registered entities to allow employees to work from home even if that location is not a licensed location. Licensed and registered entities must keep up adequate data security protection and may not take physical records out of the licensed location if they have confidential information. This guidance does not have an expiration date but is subject to revision.
  • Kentucky Department of Financial Institutions (“DFI”): The DFI released guidance to Kentucky-chartered financial institutions recommending that such institutions take certain actions in response to the COVID-19 pandemic.  Such actions include, among others, (1) working with customers affected by the coronavirus to meet their financial needs, which may include waiving overdraft and/or minimum balance fees, restructuring existing loans, extending loan repayment terms, and easing terms for new loans, (2) managing COVID-19 related staffing issues, and (3) making sure business continuity plans include pandemic planning.
  • Louisiana Office of Financial Institutions Non-Depository Division (“Division”): The Division released guidance for all licensed mortgage lenders, brokers, and originators. The Division is allowing entities to close their licensed locations and work from home, but entities that do so much provide the Division with notice of the new location. This guidance is in effect until April 9, 2020, but is subject to revision.
  • Massachusetts Division of Banks (“Division”): The Division released guidance for all licensed entities. The Division is allowing licensed entities to work from home as long as the unlicensed location is not advertised to the public and licensed entities do not meet with consumers at unlicensed locations. This guidance does not have an expiration date but is subject to revision.
  • Maryland Commissioner of Financial Regulation (“Commissioner”): The Commissioner released guidance for all licensed mortgage brokers, lenders, and servicers. The Commissioner is allowing licensed mortgage brokers, lenders, and servicers to work from home provided that the work would not require the location to be licensed as a branch office under Maryland law. This guidance does not have an expiration date but is subject to revision.  In addition, the Commissioner issued an Industry Advisory on March 19, 2020, advising the industry of Maryland Court of Appeals Chief Judge Mary Ellen Barbera’s March 18, 2020 order, which immediately stays all residential foreclosure and eviction actions in Maryland.
  • Michigan Department of Insurance and Financial Services (“DIFS”): The DIFS is seeking information regarding responses to the COVID-19 pandemic from all Michigan consumer finance licensees and registrants.  Responses were due on Friday, March 20, 2020 by 5:00pm and were required to address  whether (1) the licensee/registrant had temporarily or permanently reduced any services provided in their office locations or by your business, (2) whether the licensee/registrant had implemented a program to allow staff to work remotely and, if so, certain additional information about such program, (3) whether and in what way the licensee/registrant had communicated with their customers to provide them with information regarding any changes the licensee/registrant had implemented in response to the pandemic and how those changes may affect them, and (4) whether the licensee/registrant had proactively reached out to their customers to provide them with information concerning what they should do if they are having trouble making their loan payment.
  • Minnesota Department of Commerce (“Department”): The Department has issued separate guidance to Minnesota Industrial Loan & Thrift Companies, Licensed Mortgage Originators and Servicers (companies and individuals), Licensed Non-Depository Financial Institutions, and Regulated Loan Companies.  The guidance is intend to address certain issues and questions related to changes in branch locations or employees working from home as a result of the COVID-19 pandemic.
  • Mississippi Department of Banking and Consumer Finance (“DBCF”): The DBCF released guidance for licensed mortgage loan originators. The DBCF is allowing licensed mortgage loan originators to work from home provided that data security measures are put in place and the licensed mortgage loan originator does not have consumers meet with the licensed mortgage loan originator at their home. This guidance does not have an expiration date but is subject to revision. The DBCF also issued separate guidance to Mississippi Mortgage Licensees and Consumer Finance Licensees regarding industry pandemic preparedness and outline flexibility in DBCF processes in response to the COVID-19 pandemic.
  • Montana Division of Banking and Financial Institutions (“DBFI”): On March 19, 2020, the DBFI issued a Supervisory Memorandum on Operations During Novel Coronavirus Situation, in which the DBFI provides the industry with answers to FAQs regarding preferred methods of communication as well as notification requirements for branch and loan production office closures and hours changes during the COVID-19 pandemic.
  • Nebraska Department of Baking and Finance (“DBF”): The DBF released guidance for licensed mortgage bankers and sponsored/licensed mortgage loan originators. The DBF is allowing mortgage bankers and mortgage loan originators to work from home provided that they notify the DBF and the DBF approves the new location. All physical documents must remain at a licensed location, but licensees may access information digitally. This guidance is in effect until December 31, 2020 but is subject to revision.
  • New Hampshire Banking Department (“Department”): The Department released guidance for licensed mortgage loan originators. The Department is allowing licensed mortgage loan originators to work from home even if that location further than 100 miles from their supervisory office as would otherwise be required under New Hampshire law. This guidance does not have an expiration date but is subject to revision.
  • New Mexico Financial Institutions Division (“Division”): The Division released guidance for all mortgage licensees. The Division is allowing all mortgage licensees to work from home provided that data security measures are put in place and no mortgage licensee advertise from or meet with consumers from their home if it is an unlicensed location. This guidance is in effect until May 31, 2020 but is subject to revision.
  • Nevada Division of Mortgage Lending (“Division”): The Division released guidance for all licensed mortgage companies and mortgage loan originators. The Division is allowing licensed mortgage companies and mortgage loan originators to work from home even if it would be considered an unlicensed location. This guidance is in effect until May 31, 2020 but is subject to revision.
  • New York Department of Financial Services (“NY DFS”): The NY DFS has asked licensees to submit plans to the NY DFS on how they plan to address the CORVID-19 pandemic. In addition, the NY DFS issued guidance to New York State regulated and exempt mortgage servicers regarding support for borrowers impacted by COVID-19.
  • Oklahoma Department of Consumer Credit (“Department”): The Department has released guidance for licensed mortgage loan originators and their employees. The Department has stated that licensed mortgage loan originators and their employees may work from home as long as they put in place appropriate data security measures. This guidance is in effect until April 30, 2020 but is subject to revision.
  • Oregon Division of Financial Regulation (“Division”): The Division has released guidance for all licensed entities. Licensed entities can work from home provided that the entity provides notice to the department, the entity has procedures in place for data security and more broadly for working from home, and no consumers at met with at unlicensed locations. Mortgage loan originators must keep all physical records at a licensed location. This guidance is in effect until April 30, 2020 but is subject to revision.
  • Pennsylvania Department of Banking and Securities (“Department”): The Department issued FAQs related to compliance with Governor Wolf’s Order that non-life-sustaining businesses shut down their physical operations.
  • Puerto Rico Office of the Commissioner of Financial Institutions (“OCFI”): The OCFI issued Circular Letter CIF Number CC-2020-002 to all financial institutions required to file reports with the OCFI, which extends the deadlines for filing such reports in light of the governmental closure ordered by Governor Garced, due to the State of Emergency declared in response to COVID-19.
  • Rhode Island Division of Banking (“Division”): The Division has released guidance for licensed mortgage loan originators, mortgage lenders, loan brokers, and exempt company registrants. The Division is allowing licensed mortgage loan originators to work from home if they and their sponsoring entities have adequate data security measure in place. Consumers are not allowed to visit any unlicensed location including the home of a mortgage loan originator if it is not a licensed location. This guidance is in effect until April 30, 2020 but is subject to revision.
  • South Carolina Consumer Finance Division of the Board of Financial Institutions (“Division”): The Division has released guidance for licensed mortgage origination and servicing companies. Licensed mortgage origination and servicing companies can work from home provided that they have a contingency plan in place, adequate data security measures, and do not remove any physical records from licensed offices. This guidance is in effect until April 30, 2020 but is subject to revision.
  • South Dakota Division of Banking (“Division”): The Division had released guidance for licensed mortgage loan originators and their sponsoring entities. Licensed mortgage loan originators can work from home provided that they have adequate data security measures in place and do not take any physical records out of licensed locations. This guidance is in effect until June 5, 2020 but is subject to revision.
  • Texas Office of Consumer Credit Commissioner (“Commissioner”): The Commissioner has released guidance for licensed regulated lenders. All licensed regulated lenders can work from home provided that they prepare a written plan describing the steps it is taking, have adequate data security measures, and ensure that all physical records remain in a licensed location. This guidance is in effect until May 31, 2020 but is subject to revision.
  • Texas Department of Savings and Mortgage Lending (“Department”): The Department has issued guidance temporarily suspending any requirement that a physical office be open to the public during posted normal business hours.  Additionally, licensed mortgage loan originators may work from home or another remote location, whether located in Texas or another state, even if the home or remote location is not a licensed branch.  The guidance provides certain requirements in the event that a licensed residential mortgage loan originator or mortgage loan staff work remotely.  These allowances do not amend Texas Financial Code, Chapter 156 and/or 157 and are being allowed strictly due to the COVID-19 pandemic.
  • Vermont Department of Financial Regulation (“Department”): The Department has released guidance for licensed mortgage loan originators and their sponsoring entities. All licensed mortgage loan originators may work from home provided that no licensable activity is taken place with a consumer at an unlicensed location, adequate data security measures are put into place, and a plan is contingency plan is put in place. This guidance does not have a current expiration date but is subject to revision.
  • Washington Department of Financial Institutions (“Department”): The Department released guidance for licensed mortgage loan originators and their sponsoring entities. All licensed mortgage loan originators may work from home provided that adequate data security measures are put in place. Consumers are not allowed to visit licensed mortgage loan originators at unlicensed locations. This guidance is effective until June 5, 2020 but is subject to change.  The DFI also issued guidance to Washington regulated and exempt residential mortgage loan servicers regarding support for borrowers impacted by COVID-19.  The guidance urges such institutions to take reasonable and prudent actions, subject to the requirements of any related guarantees or insurance policies, to support those adversely impacted by COVID-19.
  • Wisconsin Department of Financial Institutions (“Department”): The Department released guidance for licensed mortgage loan originators. All licensed mortgage loan originators may work from home provided that their sponsoring entity notify the Department, a list is kept of all mortgage loan originators who elect to work from home where the home is not a licensed branch, appropriate data security measures are taken, and no physical records are present at unlicensed locations. Consumers are not allowed to visit unlicensed locations. This guidance does not have a current expiration date but is subject to revision.
  • West Virginia Division of Financial Institutions (“DFI”): The DFI issued guidance to West Virginia Regulated Financial Institutions allowing employees of regulated entities to temporarily work from home or some other remote location approved by the financial institutions, whether located in West Virginia or another state. Regulated financial institutions may permit employees to work at home or from a designated remote location, to the extent that the position allows, as long as privacy and security issues may be adequately addressed.  The guidance is in effect from March 13, 2020 through May 1, 2020.

Takeaway

As the federal government and the states work feverishly to address the growing concerns surrounding the COVID-19 pandemic, members of the financial services industry must stay abreast of the rapid changes in the legal and regulatory landscape.  We will continue to monitor for new developments and will update this post to highlight additional federal or state guidance that is issued.