On March 26, 2023, the governor of Virginia signed HB 2389 into law, which permits mortgage brokers to conduct business remotely, subject to specific requirements
This bill was initially proposed on January 17, 2023, and it involves reenacting sections 6.2-1600 (Definitions) and 6.200-1607 (Licenses; places of business; changes) of the Code of Virginia. Additionally, the bill permits licensed mortgage lenders to operate in unlicensed remote locations, subject to specific conditions.
The recent signing of HB 2389 into law in Virginia aims to offer more flexibility to mortgage brokers and lenders by permitting them to conduct their business remotely. However, this option comes with specific conditions that employers must meet to qualify for remote work. It is vital that mortgage brokers and lenders understand the requirements to comply with the new legislation.
To qualify for remote work, employers must adhere to the following conditions:
- Employers must have written policies and procedures for supervising employees or exclusive agents working remotely. These written policies and procedures must include all the requirements of this subsection.
- Employers must provide access to their platforms and customer information in line with their comprehensive written information security plan.
- Employers must employ appropriate risk-based monitoring and oversight processes. In addition, any employee or exclusive agent working from a remote location must comply with the employer’s established practice.
- Employers must ensure that no in-person customer interaction occurs at an employee’s or exclusive agent’s residence. However, exceptions require the residence to count as an approved office.
- Employers must not maintain physical records at a remote location.
- Employers must ensure that customer interactions and conversations about consumers comply with federal and state information security requirements. For example, applicable provisions under the Gramm-Leach-Bliley Act and the Safeguards Rule established by the Federal Trade Commission, set forth at 16 C.F.R. Part 314. It is important to note that requirements may see amendments from time to time.
- Employees or exclusive agents working at a remote location must access the licensee’s secure systems directly from an out-of-office device, including a laptop, phone, desktop computer, or tablet, via a virtual private network (VPN) or comparable system that ensures secure connectivity and requires a password or other forms of authentication to access.
- Employers must ensure that appropriate security updates, patches, or other alterations to the security of all devices used at remote locations are installed and maintained.
- Employers must be able to remotely lock or erase company-related contents of any device or otherwise remotely limit access to a licensee’s secure systems.
- The Nationwide Mortgage Licensing System and Registry record of a mortgage loan originator working from a remote location designate the principal place of business as the mortgage loan originator’s registered location unless such mortgage loan originator elects an office as a registered location.
These conditions are intended to ensure that mortgage brokers and lenders can operate remotely in a secure and controlled environment. It is important that employers comply with the requirements to avoid any legal issues and maintain customer trust.
Information provided here is for educational and informational purposes only and should not constitute as legal advice. We recommend you contact your own legal counsel for any questions regarding your specific practices and compliance with applicable laws.