Pending Legislation Alert from MBA Eastern Pennsylvania:
Important Update to PA Mortgage Licensing Act on Governors Desk
Governor Wolf is about to sign amendments to Pennsylvania’s Mortgage Licensing Act (the “MLA”) that will make permanent the temporary emergency flexibility for mortgage loan originators to work from home (the “MLA Amendments”).
The genesis of this legislation was action taken in 2020 by the Department of Banking & Securities in response to the Covid-19 pandemic to give mortgage loan originators the flexibility to work from home. The Department posted the following statement on its website: “The Department of Banking and Securities (“PADOBS”) will not take exception to licensees and registrants working from alternate site locations, whether licensed or not, until further notice.”
This statement was deemed necessary at the time because the pandemic made it essential for employees in many industries, including the mortgage loan origination industry, to be able to work remotely, while the MLA required most mortgage originators to be assigned to and work out of a licensed office located not more than 100 miles from their home.
With this new legislation, the 100 mile limitation is now gone. The MLA Amendments allow mortgage originators to either work out of a licensed location or from a “remote location” (that need not be licensed) wherever located. This is the key change to the MLA.
A “remote location” is a place where a mortgage originator may engage in licensed activities on behalf of its licensee as long as (i) those activities are supervised by the licensee, (ii) the licensee has written policies and procedures for such supervised activity, (iii) access to customer information is protected consistent with the licensee’s “comprehensive written information plan,” (iv) in-person customer interaction does not occur there, (v) physical records are not maintained there, (vi) the location is not advertised as one of the licensee’s established places of business, and (vii) the location is not owned or controlled by the licensee.
Thus, thanks to the MLA Amendments, a mortgage originator is authorized by statute to work from home (or at any other remote location) wherever located as long as the procedures above are followed.
These changes will take effect upon signing by the Governor.
In helping to secure this positive result on behalf of the MBA of PA, we are grateful for the constructive input of other industry advocates, the DOBS and legislators from both sides of the aisle.
Thank you to Holland and Knight who represented the Mortgage Bankers Association of PA in testifying in Harrisburg and advocating for the enactment of House Bill 1588
The MBA of PA will host a webinar very soon in coordination with the Department of Banking. Look for an announcement soon, or check the website here.