Updates from 12 State Regulatory Agencies Regarding Coronavirus and Related Work from Home IssuesAs regulatory agencies provide guidance regarding 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 24, 2020.

California Department of Real Estate Released Frequently Asked Questions Relating to COVID-19

The California Department of Real Estate’s Frequently Asked Questions contain relevant information for licensees who are seeking to manage their licenses and other obligations while the coronavirus challenges exist. The Department of Real Estate has announced that it has canceled all salesperson and broker license exams in all exam centers from March 18, 2020 to April 7, 2020.

Indiana Department of Financial Institutions Posted March 20, 2020, Notice to Mortgage Lender Licensees and Mortgage Loan Originators Regarding Working from Home

The Indiana Department of Financial Institutions (DFI) does not license mortgage branch locations, and it does not have rules or requirements that would restrict where employees are permitted to work or otherwise restrict an individual’s ability to work from home. Indiana law does not require that Indiana DFI be informed of any change to MLO work locations due to the impact of COVID-19.

The Indiana DFI disclaimed any guidance for the Indiana Secretary of State, which licenses loan brokers.

Kentucky Division of Financial Institutions Announced Recommendations on March 20, 2020

The Kentucky Department of Financial Institutions (DFI) recommended that financial institutions take the following actions, including safety precautions, social distancing, and encouragement to work with customers during this crisis. The actions suggested by DFI include:

  • Waive overdraft and/or minimum balance fees
  • Restructure existing loans
  • Extend loan repayment terms
  • Ease terms for new loans

In its notice, DFI requested that institutions providing relief  identify and monitor accounts and loans, and document any actions taken to assist customers.

Financial institutions should manage any temporary staff shortages in a manner that best protects the health and safety of the general public and maintains continuity of services to customers. DFI reminded banks or credit unions to notify Hailey Nolan, DFI’s Director of the Division of Depository Institutions, by email at Hailey.Nolan@ky.gov of any significantly altered in-person operations as a result of COVID-19 related staffing issues.

Lastly, DFI reminded entities that business continuity plans should include pandemic planning.

Minnesota Department of Commerce, Financial Institutions Division Provided Notice on the Coronavirus on March 17, 2020

Mortgage Loan Originators and Servicers

The Department of Commerce reminded mortgage loan originator licensees that there is no branch license requirement for licensees, only a branch registration through the NMLS.  Licensees who maintain branch locations but have mortgage loan originators work from a home location on a temporary basis must maintain data security policies and standards. The licensee must register the location before directing consumers to that location or maintaining any physical records at the location.

Licensees that temporarily close branches must email the department with the anticipated time that the branch will be closed.

Non-Depository Financial Institutions

Licensees that temporarily close branches must email the department with the anticipated time that the branch will be closed and notify the department of any changes.

Licensees may allow some employees to work from home as long as transactions are tied to a licensed location and consumers are not coming to any unlicensed location during the process. No physical records may be kept at any unlicensed location, and data security policies and standards must be maintained.

Regulated Loan Companies

The Department of Commerce also reminded loan companies of branch licensing obligations and the requirement that a licensed location must be open for business and for examination purposes on the schedule provided to the commission and that schedule must be conspicuously posted at the licensed location.

Loan companies that temporarily close branches must email the department with the anticipated time that the branch will be closed and must conspicuously post the schedule at the licensed location. All loan closings must occur at a licensed branch location.

Loan companies may allow some employees to work from home as long as a branch is still offering and closing loans and consumers are not coming to any unlicensed location. No physical records may be kept at the unlicensed location, and data security policies and standards must be maintained.

New Jersey Department of Banking and Insurance Issued Multiple Bulletins on March 20, 2020 Regarding the Coronavirus

The New Jersey Department of Banking and Insurance  encouraged all insurers, banks, credit unions, mortgage lenders and brokers, consumer lenders, student lenders, insurance producers, real estate brokers, and any other person or entity subject to licensure or regulation by this department to take into consideration the difficulties residents have endured and will continue to endure until the spread of COVID-19 is controlled, and those affected begin to receive regular payments and have been reimbursed for monies past due. The department specifically encouraged the entities and individuals it regulates to assist those affected by the current conditions by taking specific actions. Those actions include:

Insurance Division Regulated Entities/Individuals: Consistent with prudent insurance practices, insurers should relax due dates for premium payments and insurance policy-based payments, extending grace periods, waiving late fees and penalties, allowing forbearance with regard to the cancellation/non-renewal of policies, allowing payment plans for premium payments, extending timeframes to complete property and automobile inspections or undergo medical exams, and exercising judicious efforts to assist affected policyholders and work with them to make sure that their insurance policies do not lapse.

Banking Division Regulated Entities/Individuals: Consistent with safe-and-sound banking practices, relaxing due dates for loan payments (of all types, including mortgage, commercial, student and other consumer loans), extending grace periods, modifying terms on existing loans, casing credit card limits, extending new credit, waiving late fees and other fees, allowing customers to defer or skip payments, and delaying the submission of delinquency notices to credit bureaus.

The department requested prompt notice in cases in which operational challenges exist for licensees and any changes to operating hours of branch locations. The department also indicated that it will work with licensees in connection with scheduling examinations to minimize disruption and burden.

The Office of Consumer Finance (OCF) in the department has recognized that licensees may wish to temporarily work from home to avoid the further spread of the outbreak. Accordingly, the department is taking a no-action position concerning the requirement that activity by an OCF licensee must be conducted from a licensed branch location. The OCF’s no-action position requires that licensees first make a submission, electronically, to the OCF that contains the following information:

  1. A list of all individuals, working on behalf of the OCF licensee, who will be seeking no­action dispensation. The list must include the full name, home address, telephone number, email address, and, if applicable, NMLS unique identifier of the individual;
  2. A certification, by the OCF licensee, that these individuals are working from home due to a reason relating to the COVID-19 outbreak and have informed the OCF licensee of the reason in writing or by email (see form attached as Annex A); and
  3. A certification, by the OCF licensee, that the location(s) shall ensure the maintenance of a consumer’s right to privacy with respect to conversations and documents involving personal and financial information, including data privacy and cybersecurity, together with a description of the steps being taken and controls being implemented to ensure that consumer information and privacy are protected. Please see NJCCIC best practices and the Statewide Information Security Manual.

Note the OCF’s position is current until April 30, 2020.

North Carolina Office of the Commissioner of Banks Issued Guidance on March 17, 2020

The North Carolina Office of the Commissioner of Banks issued informal guidance that stressed that licensees use flexibility, patience, and practical solutions to benefit consumers that have experienced challenges as a result of the coronavirus. The office requested that licensees inform it of any changes in the operations or services offered by licensees and emphasized that licensees keep safety and security of personal information in mind. To the extent that there are operational changes, the office suggested that licensees contact Tara Malone at tmalone@nccob.gov for any mortgage-related questions.

Puerto Rico Office of Commissioner of Financial Institutions Issued March 17, 2020 Guidance

In its notice, the Puerto Rico Office of the Commissioner of Financial Institutions extended the deadlines for all reports required under the various laws subject to the jurisdiction and implementation of the office, in light of the territorial government closure.

All deadlines for the filing or submission of answers to complaints, requests for information, all types of financial reports, including quarterly and/or monthly reports, and license renewals, as well as any other deadline imposed by the office or by the laws under the office’s jurisdiction, which become due between March 16, 2020 and April 14, 2020 are continued or extended until April 15, 2020.

The documents which must be filed to comply with the aforementioned deadlines will be received by the office electronically. To the extent that there are questions, they should be submitted via email to the Deputy Commissioner of Financial Institutions, Alejandro Blanco Dalmau, Esq., at alejandrob@ocif.pr.gov.

Tennessee Department of Financial Institutions Issued Interim Guidance to All Non-Depository Financial Institutions and Individuals Licensed or Registered with the Compliance Division on March 23, 2020

The Tennessee Department of Financial Institutions (DFI) reminded licensees and registrants that business continuity plans should address the threat of pandemic outbreak and the potential impact on the delivery of financial services and include communication to employees.

The interim guidance is intended to facilitate the ability of licensees and registrants to take precautions deemed necessary to avoid the risk of exposure to or transmission of COVID-19. The DFI will allow companies to temporarily modify work assignments in order to reduce the risk of exposure to or transmission of COVID-19 during this state of emergency. Members of the public may not travel to an employee’s residence to conduct business.

The DFI recommended the following best practices in connection with employees working remotely:

  1. All computers and other devices that contain, or are used to access, confidential information should be encrypted and secure.
  2. Employees should be required to access the licensee’s or registrant’s secure data system remotely using a virtual private network (VPN) or similar system that requires passwords or other forms of authentication to access.
  3. All security updates, patches, or other alterations to the individual’s access device should be maintained.
  4. The employee should not keep any physical business records at the remote location.
  5. Activity should be conducted in a private environment, rather than a public area.

Texas Department of Savings and Mortgage Lending Released March 20, 2020, Guidance on Working from Home

The Department of Savings and Mortgage Lending temporarily suspended the requirement that a physical office be open to the public during posted normal business hours. In addition, they will allow Texas-licensed mortgage loan originators to work from home or other remote locations, even in instances where the location is not licensed. If a Texas-licensed mortgage loan originator or mortgage staff work remotely, their licensed or registered employers must ensure that:

  1. Strict security of information is maintained;
  2. All physical business records are maintained at licensed locations rather than an individual’s home or other remote location; and
  3. Consumers are not permitted to go to a mortgage loan originator’s home.

Texas Office of Consumer Credit Commission Issued Advisory Bulletin to Regulated Lenders on March 13, 2020

The Texas Office of Consumer Credit Commission (OCCC)  temporarily announced that it will not take an enforcement action against a licensee that conducts regulated lending activity from unlicensed locations, so long as the licensee meets the following requirements:

  1. A licensee must prepare a written plan or documentation describing what steps it is taking, as well as the locations where regulated lending activity is taking place. The licensee must maintain this documentation until the OCCC’s next examination of the affected licensed location.
  2. A licensee’s employees must access information in accordance with the licensee’s written information security program under the federal Safeguards Rule, 16 CFR pt. 314. A licensee must continue to maintain the security of each consumer’s personal information.
  3. If an employee accesses secure electronic information from the company, the employee must use a virtual private network or a similar system that requires authentication to access. Any devices must have up-to-date security updates or patches.
  4. A licensee may not keep any physical business records at a location other than a licensed location. All records (physical or electronic) must be accessible from a licensed location.

The OCCC’s guidance is in effect through May 31, 2020.

Utah Department of Financial Institutions Sent a Coronavirus Communication on March 12, 2020

The Utah Department of Financial Institutions sent a communication to express the department’s expectation of mortgage companies in light of the evolving coronavirus pandemic. If a company determines it is in the best interest of its employees or customers to temporarily reduce or suspend operations or reduce operating hours, the company is allowed to proceed. It is not necessary to obtain the department’s approval.

If a company does take any action in this regard, the department requests that the company do the following:

  1. Provide adequate notice to customers.
  2. Send an email to the department’s contact of the action(s) taken to Andrea Staheli, Supervisor of Consumer Credit and Compliance for the Utah Department of Financial Institutions, at astaheli@utah.gov.

Virginia Bureau of Financial Institutions Provided a Policy Statement

The Bureau of Financial Institutions encouraged all supervised financial institutions to work constructively to mitigate the impacts of the coronavirus (COVID-19) pandemic on Virginia consumers and businesses.

The bureau stated that it is not in a position to unilaterally modify statutory requirements, but it is also mindful of the extraordinary extenuating circumstances presented by these recent events. Thus, the bureau will take such circumstances into account should a subsequent issue arise and will attempt to accommodate, consistent with law and sound practices, efforts made by licensees to minimize service disruptions.

The bureau cautioned licensees that data security, internal controls, and adherence to safe and sound lending practices must retain paramount importance in alternative work programs. The bureau will also work with financial institutions to reduce the burden when scheduling examinations and place an increased emphasis on off-site reviews and examinations.

The bureau’s policy statement is effective through June 1, 2020.

Washington Department of Financial Institutions Issued Guidance for Servicers on March 20, 2020

The Washington Department of Financial Institutions has issued guidance to all mortgage servicers so that they can alleviate the overall impact of COVID-19 on Washington borrowers who demonstrate that they cannot make timely payments. The department is encouraging servicers to:

  1. Forbear mortgage payments for 90 days from their due dates;
  2. Refrain from reporting late payments to credit rating agencies for 90 days;
  3. Offer mortgagors an additional 90-day grace period to complete trial loan modifications, and ensure that late payments during the COVID-19 pandemic do not affect their ability to obtain permanent loan modifications;
  4. Waive late payment fees and any online payment fees for a period of 90 days;
  5. Postpone foreclosures for 90 days;
  6. Ensure that borrowers do not experience a disruption of service if the mortgage servicer closes its office, including making available other avenues for mortgagors to continue to manage their accounts and to make inquiries; and

Proactively reach out to borrowers via app announcements, text, email or otherwise to explain the above-listed assistance being offered to mortgagors.

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Photo of Haydn J. Richards Jr. Haydn J. Richards Jr.

Through his actions and collective experience, Haydn Richards has demonstrated that he is one of the foremost leaders in state financial services law and financial services licensing matters. Haydn is a nationally recognized leader on mortgage and financial services licensing matters, including counseling…

Through his actions and collective experience, Haydn Richards has demonstrated that he is one of the foremost leaders in state financial services law and financial services licensing matters. Haydn is a nationally recognized leader on mortgage and financial services licensing matters, including counseling clients relating to the formation of financial services companies and strategic acquisitions. He regularly interacts on behalf of financial services companies with federal and state regulatory agencies, both in adversarial and non-adversarial matters. Haydn counsels clients on CFPB compliance,federal and state origination-related issues, as well as all aspects of the Secure and Fair Enforcement for Mortgage Licensing (SAFE) Act, financial services licensing matters and the Nationwide Multistate Licensing System & Registry (NMLS). He also supports companies relating to matters involving residential and commercial mortgage lenders, brokers, and servicers in both the forward mortgage and reverse mortgage industries; consumer finance companies; student loan companies; third-party loan fulfillment companies; and debt collectors.

Photo of Michael M. Aphibal Michael M. Aphibal

Michael Aphibal advises on regulatory issues affecting financial institutions, including banks, non-bank lenders, and insurance agencies. His work primarily focuses on issues surrounding the offering of consumer financial products and services, including licensing, employee compensation, loan origination and servicing, customer information sharing and…

Michael Aphibal advises on regulatory issues affecting financial institutions, including banks, non-bank lenders, and insurance agencies. His work primarily focuses on issues surrounding the offering of consumer financial products and services, including licensing, employee compensation, loan origination and servicing, customer information sharing and privacy, consumer disclosures, telemarketing, and the sale of add-on products, particularly debt protection products.

Photo of Robert S. Niemi, CMB Robert S. Niemi, CMB

Bob Niemi is a Senior Advisor* for Financial Services in Bradley’s Charlotte and Washington, D.C. offices. As a mortgage leader and industry advocate for more than 25 years, Bob understands the challenges facing clients in today’s regulatory environment. He has extensive experience in…

Bob Niemi is a Senior Advisor* for Financial Services in Bradley’s Charlotte and Washington, D.C. offices. As a mortgage leader and industry advocate for more than 25 years, Bob understands the challenges facing clients in today’s regulatory environment. He has extensive experience in all facets of the lending industry, including auto finance, consumer and small dollar lending. As a CMB, Bob possesses training-level knowledge of the mortgage process, and has a deep understanding of changing mortgage regulations.