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On July 6, the Nationwide Multistate Licensing System & Registry (NMLS) published a notice announcing the rescission of the Vermont Department of Financial Regulation’s “Combination of License Types” option. Between July 1 and September 30, companies that hold a combination license must transition back to the following appropriate licenses in order to conduct business in the state: lender license, mortgage broker license, loan solicitation license, and/or loan servicer license. Companies will need to file a company form application (MU1) and an individual form (MU2) for each of their control persons, and electronic surety bonds will need to be obtained for each new license to pass NMLS’s completeness check. However, companies will only need to update their MU1 and MU2s, and not need to re-enter information that has already been provided. Additionally, companies are required to complete the transition process for each branch that holds a combination license. NMLS reminds companies that this transition is not optional.
On May 12, the Vermont governor signed SB 88, which amends various provisions related to insurance, banking, and securities, including those related to licensing applications and the annual renewal process. Among other things, the act (i) repeals certain licensing fees related to mortgage broker applications and loan servicer license renewals; (ii) increases the fee that licensees who do not timely file annual reports will be charged from $100 to $1,000 for each month or part of a month that the report is past due; (iii) specifies that mortgage loan originators and a licensee’s employees may work remotely provided they are assigned to a licensed location, are “adequately supervised by the licensee,” and meet any addition required conditions; and (iv) repeals certain provisions related to the surrender of a license in the event it is suspended, revoked, or terminated. The licensing amendments take effect immediately.
On May 4, the Vermont legislature passed SB 88 (now known as Act 25), which among other things, permits mortgage loan activity to be conducted outside of an entity’s main place of business or branches. Act 25 allows a mortgage originator, broker, or servicer’s employees to work from their residence, assuming the individual is adequately supervised by the employer.
On July 10, the Vermont Department of Financial Regulation issued an industry alert highlighting the Vermont Covid Emergency Assistance Program, which makes available $5,000,000 to qualifying Vermont homeowners who have missed mortgage payments due to the Covid-19 emergency. Payments from the program will be made directly to mortgage servicers on behalf of qualifying consumer applicants. Upon payment, the mortgagor will no longer be considered to be liable with respect to those payments. Servicers are requested to provide a contact name for the company that the Vermont House Finance Agency may use in connection with the program.
On May 14, the Vermont governor signed S.B. 333, which imposes a moratorium on ejectment and foreclosure actions until 30 days after the governor terminates the Covid-19 state of emergency. While a residential mortgage lender may commence a foreclosure action, the court must stay the action as of the date of filing until the end of the emergency period. The act also places limitations on writs of possession not yet issued as well as writs of possession already issued. The act took effect immediately upon passage.
On April 23 and 21, nine states announced a multi-state initiative to provide student loan relief options for borrowers with privately held student loans not covered by the CARES Act. California, Colorado, Connecticut, Illinois, Massachusetts, New Jersey, Vermont, and Washington outlined within their announcements specific measures for borrowers with commercially-owned Federal Family Education Loan Program loans and borrowers with private student loans who are struggling to make payments due to the Covid-19 pandemic. The announcements also noted that Virginia is participating in the initiative as well. These relief options, offered in conjunction with the listed private student loan servicers, include (i) a minimum 90-days of forbearance relief; (ii) a waiver of late fees; (iii) no negative credit reporting; (iv) a 90-day moratorium on collection lawsuits; and (v) enrollment in applicable borrower assistance programs, such as income-based repayment. The states cautioned that enrollment in these relief options is not automatic, and recommended borrowers contact their student loan servicer to see what options best suit their needs.
In addition, California, Colorado, Connecticut, New Jersey, Vermont, and Washington recommended that regulated student loan servicers with limited ability to take these actions due to investor restrictions or contractual obligations “should instead proactively work with loan holders whenever possible to relax those restrictions or obligations.”
On April 21, Vermont’s attorney general issued a directive to debt collectors, creditors, and financial institutions declaring that CARES Act stimulus payments are exempt from garnishment or collection under Vermont law. In addition, the directive asks banking institutions to voluntarily suspend any set-offs or other collection activity for overdrafts and fees that could impact the stimulus payments.
On March 25, Governor Scott issued an executive order directing all citizens to stay at home, leaving only for essential reasons. All businesses and not-for-profit entities must suspend in-person business operations, with limited exceptions, and are encouraged to develop on-line, telephone and web-based strategies. Banks and financial institutions are considered essential, but the order limits routine retail banking operations to transactions conducted through automated teller machines, drive-through services and online and telephone services order . The order is effective on March 25 at 5pm ET, and is in place until April 15.
On March 13, the Vermont Department of Financial Regulation issued a memorandum advising licensees and sponsoring companies that the Department will not take action against licensed mortgage loan originators and their sponsoring company if the MLO works from home so long as certain requirements are met.
Vermont Department of Financial Regulation issues guidance to Vermont chartered banks and credit unions
On March 16, the Vermont Department of Financial Regulation issued guidance to Vermont chartered banks and credit unions regarding working with affected customers. Financial institutions are encouraged to, among other things, waive certain fees (e.g., ATM, overdraft, late payment fees), ease restrictions on cashing out-of-state and non-member checks, increase credit card limits for credit worthy borrowers, and offer payment accommodations. Prudent efforts to modify the terms on existing loans for affected customers will not be subject to examiner criticism and, generally, the department supports and will not criticize efforts to accommodate customers in a safe and sound manner. The guidance also addresses: (i) financial condition review, supervisory response, and regulatory relief; (ii) regulatory reporting requirements; and (iii) alternative service options.
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