Kentucky Statutes 286.8-295 – Mortgage loan company and mortgage loan broker to exercise control over operations, employees, and company affairs — Requirements for alternate work location
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(1) As used in this section, “employee” shall include a mortgage loan originator engaged as an independent contractor.
(2) (a) Every mortgage loan company and mortgage loan broker shall exercise proper supervision and control over the operations, employees, and affairs of its company.
(b) A mortgage loan company or mortgage loan broker shall supervise and control all employees acting as a mortgage loan originator on behalf of the mortgage loan company or mortgage loan broker.
(3) A licensee that allows employees to engage in the mortgage lending process from an alternate work location shall:
(a) Exercise proper supervision and control over the employees;
(b) Have written policies and procedures in place that ensure a safe, secure system for the mortgage lending process;
(c) Oversee compliance, and require all employees to comply, with the policies and procedures referenced in paragraph (b) of this subsection;
(d) Employ appropriate risk-based monitoring and oversight processes; (e) Ensure that:
1. Customer interactions and communications about consumer accounts are in compliance with federal and state information security requirements, including applicable provisions of:
a. The Gramm-Leach-Bliley Act of 1999, Pub. L. No. 106-102, as amended; and
b. The Federal Trade Commission’s Safeguards Rule, set forth in 16
C.F.R. pt. 314;
2. Any employee that engages in the mortgage lending process at an alternate work location accesses the company’s secure systems, including a cloud-based system, directly from any out-of-office device via a virtual private network (VPN) or a comparable system that ensures secure connectivity and requires passwords or other forms of authentication to access;
3. Appropriate security updates, patches, or other alterations to the security of all devices used at an alternate work location are installed and maintained;
4. Any employee that engages in the mortgage lending process at an alternate work location agrees to comply with the licensee’s processes established under paragraph (d) of this subsection; and
5. The Nationwide Multistate Licensing System and Registry record of a mortgage loan originator that works from an alternate work location designates a properly licensed location as the mortgage loan originator’s
official work station; (f) Have the ability to:
1. Remotely lock or erase company-related contents of any device; or
2. Otherwise remotely limit all access to the company’s secure systems; and
(g) At least annually:
1. Certify that all employees engaged in the mortgage lending process at alternate work locations meet the appropriate standards and safeguards to continue engaging in the mortgage lending process from the alternate work locations; and
2. Review each alternate work location and provide proof of the documented review to the department upon request.
(4) Notwithstanding any provision to the contrary, nothing in this section shall prohibit mortgage loan companies from utilizing the services of a mortgage loan broker and its employees.
Effective: July 14, 2022
History: Amended 2022 Ky. Acts ch. 125, sec. 4, effective July 14, 2022. — Created
2009 Ky. Acts ch. 104, sec. 21, effective June 25, 2009.
(2) (a) Every mortgage loan company and mortgage loan broker shall exercise proper supervision and control over the operations, employees, and affairs of its company.
Terms Used In Kentucky Statutes 286.8-295
- Company: may extend and be applied to any corporation, company, person, partnership, joint stock company, or association. See Kentucky Statutes 446.010
- Control: means the power, directly or indirectly, to direct the management or policies of a company, whether through ownership of securities, by contract, or otherwise. See Kentucky Statutes 286.8-010
- Department: means the Department of Financial Institutions. See Kentucky Statutes 286.1-010
- Federal: refers to the United States. See Kentucky Statutes 446.010
- Licensee: means a person to whom a license has been issued. See Kentucky Statutes 286.8-010
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Mortgage loan: means any loan primarily for personal, family, or household use that is secured by a mortgage, deed of trust, or other equivalent consensual security interest on residential real property or any loan primarily for personal, family, or household use that is secured by collateral that has a mortgage lien interest in residential real property. See Kentucky Statutes 286.8-010
- Mortgage loan: A loan made by a lender to a borrower for the financing of real property. Source: OCC
- Mortgage loan broker: means any person who for compensation or gain, or in the expectation of compensation or other gain, received directly or indirectly, serves as an agent for any borrower in an attempt to obtain a mortgage loan, or holds oneself out as being able to do so. See Kentucky Statutes 286.8-010
- Mortgage loan company: means any person who directly or indirectly:
(a) Makes, purchases, or sells mortgage loans, or holds oneself out as being able to do so. See Kentucky Statutes 286.8-010 - Mortgage loan originator: means a natural person who:
(a) 1. See Kentucky Statutes 286.8-010 - Oversight: Committee review of the activities of a Federal agency or program.
- Record: means any books of account or other books, papers, journals, ledgers, statements, instruments, documents, files, messages, writings, correspondence, or other internal data or information, made or received in the regular course of business or otherwise, regardless of the mode in which it is recorded. See Kentucky Statutes 286.8-010
- State: when applied to a part of the United States, includes territories, outlying possessions, and the District of Columbia. See Kentucky Statutes 446.010
(b) A mortgage loan company or mortgage loan broker shall supervise and control all employees acting as a mortgage loan originator on behalf of the mortgage loan company or mortgage loan broker.
(3) A licensee that allows employees to engage in the mortgage lending process from an alternate work location shall:
(a) Exercise proper supervision and control over the employees;
(b) Have written policies and procedures in place that ensure a safe, secure system for the mortgage lending process;
(c) Oversee compliance, and require all employees to comply, with the policies and procedures referenced in paragraph (b) of this subsection;
(d) Employ appropriate risk-based monitoring and oversight processes; (e) Ensure that:
1. Customer interactions and communications about consumer accounts are in compliance with federal and state information security requirements, including applicable provisions of:
a. The Gramm-Leach-Bliley Act of 1999, Pub. L. No. 106-102, as amended; and
b. The Federal Trade Commission’s Safeguards Rule, set forth in 16
C.F.R. pt. 314;
2. Any employee that engages in the mortgage lending process at an alternate work location accesses the company’s secure systems, including a cloud-based system, directly from any out-of-office device via a virtual private network (VPN) or a comparable system that ensures secure connectivity and requires passwords or other forms of authentication to access;
3. Appropriate security updates, patches, or other alterations to the security of all devices used at an alternate work location are installed and maintained;
4. Any employee that engages in the mortgage lending process at an alternate work location agrees to comply with the licensee’s processes established under paragraph (d) of this subsection; and
5. The Nationwide Multistate Licensing System and Registry record of a mortgage loan originator that works from an alternate work location designates a properly licensed location as the mortgage loan originator’s
official work station; (f) Have the ability to:
1. Remotely lock or erase company-related contents of any device; or
2. Otherwise remotely limit all access to the company’s secure systems; and
(g) At least annually:
1. Certify that all employees engaged in the mortgage lending process at alternate work locations meet the appropriate standards and safeguards to continue engaging in the mortgage lending process from the alternate work locations; and
2. Review each alternate work location and provide proof of the documented review to the department upon request.
(4) Notwithstanding any provision to the contrary, nothing in this section shall prohibit mortgage loan companies from utilizing the services of a mortgage loan broker and its employees.
Effective: July 14, 2022
History: Amended 2022 Ky. Acts ch. 125, sec. 4, effective July 14, 2022. — Created
2009 Ky. Acts ch. 104, sec. 21, effective June 25, 2009.