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On October 22, the Tennessee Department of Financial Institutions issued a memorandum to licensed mortgage loan originators suspending its requirement that licensees complete a criminal background check or authorize a credit report if they have not done so in the past three years as a condition to renewal for calendar year 2021, except where the mortgage loan originator has entered into a consent agreement with the department requiring such actions. The memorandum states the requirement will be in effect for licensee renewal for calendar year 2022.
On May 1, the Texas Finance Commission adopted amendments related to application procedures for regulated residential mortgage loan originators (MLO). The amendments are intended to reduce costs for residential MLOs and to ensure consistency with current licensing procedures and processes. Among other things, the amendments lower MLO application and annual renewal fees from $300 to $200, and implement statutory changes from HB 1342 (enacted last year) related to criminal background checks for residential MLOs. Specifically, the amendments (i) repeal a provision that allowed for the “denial, suspension, or revocation for any offense occurring in the five years preceding the application”; (ii) add provisions requiring an agency to consider the correlation between the element of a crime and a licensed occupation’s duties and responsibilities; and (iii) remove language related to letters of recommendation provided on behalf of an MLO applicant. The amendments are effective as of May 7.
On March 25, in response to the Covid-19 pandemic, the NMLS Policy Committee extended the deadline for certain reporting obligations satisfied through NMLS, and the enrollment window for taking the SAFE MLO test.
Companies required to submit financial statements, the Mortgage Call Report, and the Money Services Businesses Call Report will have an additional 60 days from pre-established deadlines to submit such reports. Individuals will have the testing window on their test appointments extended 180 days.
The NMLS Resource Center has been updated with additional resources to provide updates on state agency operating status. In addition, the NMLS Policy Committee is encouraging states to accept documentation electronically that otherwise may have been required in hard copy.
The full announcement can be found on the NMLS Resource Center.
On March 22, the California Department of Business Oversight (DBO) issued guidance directed at escrow agents, finance lenders and servicers, student loan servicers, residential mortgage lenders and servicers, and MLOs whose customers may be suffering from loss of income or other financial hardships as a result of the Covid-19 pandemic. The guidance states that the DBO will not take enforcement action against licensees for operating unlicensed branches if, during the state of emergency, employees conduct activities from home that normally would require a branch license, provided that appropriate measures are taken to protect consumers and their data. The DBO also will not criticize student loan servicers or licensees sponsoring MLOs who permit their respective employees to work from home, provided that certain conditions are met. While the foregoing applies to Escrow Law licensees, the DBO notes that it cannot modify any restrictions that may be imposed by the Fidelity Corporation or the licensee’s surety bond. The DBO offers additional recommendations to licensees, including offering payment accommodations to avoid delinquencies and negative credit bureau reporting, easing terms for new mortgage loans to affected borrowers, and exercising discretion in determining which of their services and transactions are “essential services” for the purposes of “stay-in-place” or “shelter-in-place” orders. The DBO also noted that it will not criticize any late mortgage recordation that result from the closure of a county recorder’s office due to Covid-19.
On March 20, the Texas Department of Savings and Mortgage Lending issued a notice temporarily suspending any requirement that a physical office be open to the public during posted normal business hours. In addition, the notice provided that licensed MLOs 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. However, MLOs are still subject to certain data security requirements and are prohibited from permitting consumers into the MLO’s home.
On March 20, the Indiana Department of Financial Institutions confirmed that because it does not require licenses for mortgage branch locations or require a licensee to work from a specific branch, there are no restrictions on an individual mortgage loan originator (MLO) from working from a home office.
On March 22, the California Department of Business Oversight (Department) issued guidance to escrow agents, finance lenders and servicers, student loan servicers, residential mortgage lenders and servicers, and mortgage loan originators in light of Covid-19 permitting employees of licensees to conduct activities from home that normally would require a branch license, provided that appropriate measures are taken to protect consumers and their data. Further, the Department will not criticize student loan servicers or licensees sponsoring MLOs who permit their respective employees to work from home, provided that certain data security and other conditions are met. Escrow Law licensees may also follow this guidance, however the licensees must still comply with the Fidelity Corporation or the licensee’s surety bond. Additionally, licensees are encouraged to assist consumers including through, among other things, offering payment accommodations.
On March 13, 2020, the South Carolina State Board of Financial Institutions, Consumer Finance Division (division) released guidance for mortgage origination and servicing companies regarding working remotely due to Covid-19. The division’s interim guidance allows licensed mortgage loan originators (MLO) to work from home provided that certain criteria are met including (i) the company establishes temporary supervisory policies and procedures; (ii) the MLO has secure access to the company’s origination system; (iii) the security of the MLO’s computer is maintained; and (iv) the MLO does not keep physical company records at the remote location.
On March 17, Prometric announced that, effective March 18, Prometric Test Centers in the U.S. and Canada will be closed for 30 days. This directly impacts state MLO license applicants as the SAFE MLO test, which individuals must pass to obtain an MLO license, is administered by Prometric.
On March 18, the Maine Bureau of Consumer Credit Protection provided interim guidance to MLOs, allowing employees to work from home as long as data security provisions are in place, and physical business records are stored only at the licensed main office. The guidance will be effective through May 1, 2020.
- Jeffrey P. Naimon to provide “Fair lending update” at the Colorado Mortgage Lenders Association Operational and Compliance Forum
- Jonice Gray Tucker to discuss “Justice for all: Achieving racial equity through fair lending” at CBA Live
- Warren W. Traiger to discuss “On the horizon for CRA modernization” at CBA Live
- APPROVED Webcast: Strategy & Technology: A dynamic duo for successful regulatory exams
- Daniel R. Alonso to discuss “Primer on cross-border prosecutions in Argentina, Brazil, Colombia, and Mexico for U.S. criminal lawyers” at a New York City Bar Association webinar
- Jonice Gray Tucker to discuss "Fair lending" at the Mortgage Bankers Association Regulatory Compliance Conference
- Michelle L. Rogers to discuss “State law regulatory and enforcement trends” at the Mortgage Bankers Association Regulatory Compliance Conference
- Jonice Gray Tucker to discuss “Government investigations, and compliance 2021 trends” at the Corporate Counsel Women of Color Career Strategies Conference
- Max Bonici to discuss “BSA/AML trends: What to expect with the implementation of the AML Act of 2020” at the American Bar Association Banking Law Fall Meeting
- H Joshua Kotin to discuss “Modifications and exiting forbearance” at the National Association of Federal Credit Unions Regulatory Compliance Seminar
- Jonice Gray Tucker to discuss “Fintech trends” at the BIHC Network Elevating Black Excellence Regional Summit
- Jonice Gray Tucker to discuss "Consumer financial services" at the Practising Law Institute Banking Law Institute