State regulators in Washington and Connecticut the financial services industries are beginning to issue guidance to address questions about licensees working at home due to the coronavirus (COVID-19) outbreak. State laws generally require licensable activity to take place only at licensed locations, such as a main office or branch office. However, Washington State and Connecticut have taken no-action positions for certain employees and individuals who conduct licensable activities at home.

Given the declared state of emergency in Washington State, the Washington State Department of Financial Institutions has issued Interim Guidance to temporarily allow licensed mortgage loan originators (MLO) to work from home, whether located in Washington State or another state, even if the home is not a licensed branch, provided certain data security conditions are met. These conditions are: 1. the licensed MLO must be able to access the company’s secure origination system directly using a virtual privacy network (VPN) or similar system; 2. all security updates, patches, or other alterations to the devices security must be maintained; and 3. the licensed MLO must not keep any physical business records at any location other than the licensed main office. The Department will not take action against such licensed MLO or the sponsoring licensed company. The Interim Guidance is effective immediately through June 5, 2020.

As part of an effort to contain the spread of the coronavirus and minimize its impact on Connecticut businesses, the Connecticut Department of Banking has issued a memorandum to formalize its no-action position regarding individuals who temporarily work from home due to the outbreak of the disease. Licensees regulated by the Department, such as mortgage lenders, mortgage servicers, and mortgage brokers, are required to have a branch office location license to conduct licensable activity at a location other than the licensed main office. However, the Department will not take action against employees of licensees who work from home and meet the following requirements: 1. working from home is related to the coronavirus; 2. the individual maintains all necessary licenses to conduct licensable activity; 3. no activity will be conducted with the public at the home location; and 4. the licensee must continue to exercise reasonable supervision over the employee. The Department’s no-action position is effective immediately through April 30, 2020.