Four Additional States Issue New Guidance Relating to Working from Home; Massachusetts and New York Supplement Previous GuidanceAs we continue to follow the trend of regulatory agencies providing guidance allow working from home for financial services professionals while the COVID-19 outbreak progresses, we summarized the additional guidance issued in the recent past and current as of March 19, 2020.

Colorado Department of Regulatory Agencies, Division of Real Estate Issued an Advisory on March 16, 2020

The Division of Real Estate reminds companies that the State of Colorado does not license mortgage companies, as those entities are only required to register with the Nationwide Mortgage Licensing System and Registry (NMLS). Therefore, the Colorado Board of Mortgage Loan Originators does not have any requirements concerning the location of where a mortgage company is doing business in Colorado, as long as they are operating legally in the state in accordance with standards determined and administered by the Colorado Secretary of State.

With regard to Colorado mortgage loan originators (MLO), the Mortgage Loan Originator Licensing and Mortgage Company Registration Act and the Board of Mortgage Loan Originator administrative rules are silent regarding the location of where an MLO is required to operate their business and perform licensed activities. Therefore, an MLO is able to perform their mortgage-related activities at a location other than at their registered license location.

Iowa Division of Banking Issued Regulatory Guidance on March 18, 2020

The Iowa Division of Banking is allowing licensees, registrants, and their employees, including licensed or registered mortgage loan originators, to work remotely from their residence or another location designated by the employer during the COVID-19 pandemic, even if the residence or designated location is not a licensed or registered location.

The Division suggests the following best practices for remote workers to ensure that all licensees maintain information security even while working from remote locations:

  • Computers and devices that leave a licensee’s authorized location(s) should include at-rest encryption.
  • If paper records containing confidential information are taken off the premises of a licensee’s authorized location(s), procedures must be established to secure that information at the offsite location.
  • Connections to the licensee’s authorized location(s) or sensitive systems via any out-of-office device (e.g., laptop, desktop, phone, tablet) should be encrypted in transit by use of a virtual private network (VPN) or similar technology that requires a password or other form of authentication.
  • Activity should be conducted in a private home environment, avoiding public areas such as coffee shops or libraries.

The division reminds licensees that all other Iowa laws remain in effect, and it is still the responsibility of all licensed companies to oversee the activities of their employees and to conduct business in a manner that otherwise complies with all applicable Iowa laws during this emergency. All licensed companies must have temporary policies, procedures, and a plan for supervision of employees in place.

Louisiana Provided Guidance to Residential Mortgage Lenders/Brokers/Originators Regarding COVID-19 Procedures on March 18, 2020

The Louisiana Office of Financial Institutions issued an emergency declaration allowing Louisiana licensed companies to temporary close licensed locations, relocate licensed locations and allow mortgage loan originators (MLOs) to work from home. Any licensee whose business is materially affected by the health crisis should contact the Office of Financial Institutions immediately regarding the temporary location.

The required prior written notice for office changes is waived during this time period, and the fees associated with the location change will be considered for waiver on a case-by-case basis. Licensees should provide their temporary locations to the regulator by email (, U.S. mail, or fax. The information should not be updated in the NMLS at this time. The notification information should include:

  • Name/address of closed location
  • Name/address/contact information of the new location
  • Such other information that the commissioner may request

This declaration is set to expire on April 9, 2020.

Massachusetts Division of Banks Supplemented Previous Guidance on March 19, 2020

Supplementing previously provided guidance, the Division of Banks understands that business interruptions may take place as a result of COVID-19. The Division of Banks wishes to remind its licensees to minimize disruption to consumers and communicate with consumers regarding any closures. The Division of Banks also encourages re-opening locations that are impacted by COVID-19 when practicable.

The Division of Banks also requests that licensees notify their office regarding any location closures, business disruption, or other significant disruptions to the operations of the business relating to COVID-19. Such information is critical so that the Division of Banks can monitor the industry and understand local and systemic issues.

New Mexico Guidance on Working from an Unlicensed Home Residence

On March 17, 2020, the New Mexico Financial Institutions Division (FID) issued a memorandum outlining temporary regulatory guidance regarding the ability of mortgage licensees to work from an unlicensed home residence. The guidance is effective until May 31, 2020, or until modified or withdrawn.

FID will permit New Mexico mortgage licensees and their staff to work from a home residence, which may not be a licensed branch location, so long as the following standards are met:

  • The company has established security protocols in place for employees to securely access systems through a VPN or other secure system;
  • Security protocols are in place to protect consumer information;
  • Company and employees do not advertise or hold their residence out as a place of business;
  • Employees do not meet with consumers at, or have consumers come to, an unlicensed residence; and
  • Companies and employees must exercise due diligence in safeguarding both company and consumer data, information and records, whether in paper or electronic format, to protect them against unauthorized or accidental access, use, modification, duplication, destruction or disclosure.

New York Department of Financial Services Granted Relief to Licensed Institutions on March 12, 2020

The New York Department of Financial Institutions has allowed the temporary relocation of any authorized place of business, as well as the closing of any such location, if adversely impacted by COVID-19, without the requisite advance notice. This relief applies to the following New York regulated institutions: New York State regulated banking organizations, foreign banking corporations, licensed lenders, check cashers, money transmitters, sales finance companies, premium finance agencies, budget planners, mortgage bankers, mortgage brokers, mortgage loan originators, mortgage loan servicers, student loan servicers, and virtual currency licensees.

Importantly, the Department of Financial Services also will allow professionals, including licensed mortgage loan originators, to work from home or other temporary locations without having first licensed those locations. To do so, however, the individual must remain subject to the full supervision and oversight of their licensed or registered employer. Those institutions must maintain appropriate safeguards and controls, including but not limited to those related to data protection and cybersecurity. Finally, if an individual will conduct licensable activity from a home that is not licensed, such individual may not meet with members of the public at their personal residence.

Pennsylvania Department of Banking Announced on March 16, 2020, That It Will Not Object to Alternate Site Arrangements

The Pennsylvania Department of Banking and Securities announced that the department had closed its offices while the Commonwealth of Pennsylvania is under a Proclamation of Disaster Emergency. The department is maintaining operations through electronic communication, and all mail must also be emailed to the department, including digital copies of checks for any paper checks that are being sent via regular mail.

The department will not object to licensees and registrants working from alternate site locations, whether licensed or not, during the time in which the Commonwealth of Pennsylvania is under a Proclamation of Disaster Emergency. Once that proclamation ceases, the expectation is that licensees will resume their traditional mode of business operations.

South Carolina Board of Financial Institutions Consumer Finance Division and South Carolina Department of Consumer Affairs Separately Issued Interim Regulatory Guidance on March 18, 2020, Regarding Working Remotely from Unlicensed Locations

The Board of Financial Institutions expressed the Consumer Finance Division’s intent to temporarily allow licensed mortgage loan originators to work from home, whether located in the State of South Carolina or another state, even if the home is not a licensed branch. The Interim Regulatory Guidance is effective through April 30, 2020. The Interim Regulatory Guidance of the South Carolina Department of Consumer Affairs is nearly identical, and the guidance in both notices follows.

If the provisions set forth below are met, the division will 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. Those provisions include:

  • The sponsoring employer must have temporary policies, procedures, and a plan for supervision in place while under the state of emergency.
  • The licensed mortgage loan originator must be able to access the company’s secure origination system (including a cloud-based system) directly from any out-of-office device the mortgage loan originator uses (laptop, phone, desktop computer, tablet, etc.) using a virtual private network (VPN) or similar system that requires passwords or other forms of authentication to access.
  • All security updates, patches, or other alterations to the device’s security must be maintained.
  • The licensed mortgage loan originator must not keep any physical business records at any location other than the licensed main office.
  • Licensed mortgage loan originators working from unlicensed homes may not meet with consumers at their home.

2019 Mortgage Log Submissions

The division recognizes the disruption associated with COVID-19 and, in coordination with the South Carolina Department of Consumer Affairs, has deferred the filing deadline for Mortgage Loan Logs until June 1, 2020. If a mortgage origination and servicing company submits a completed 2019 Mortgage Loan Log by June 1, 2020, the division and the department will not take punitive action against the licensee and will not assess the statutory late fee of $100 per day.