Nevada, which has taken a bold approach to collections during the COVID-19 pandemic, took yet another step that may add difficulty for collection agencies. Despite its moratorium on debt collection—which has since expired—Nevada's Department of Business and Industry gave some leeway by allowing mortgage company employees to telework in order to prevent the spread of COVID-19. In a letter to the American Financial Services Association dated July 28, 2020, the Department confirms that the waiver allowing telework outside of a licensed location has expired.
Nevada gave clear instructions about the debt collection moratorium. In March, Nevada officially ordered all non-essential businesses to close. Around the same time, the Financial Institutions Division confirmed that collection agencies are deemed non-essential. While initially the moratorium was set to extend until June 30, Nevada allowed collection agencies to re-open in one of its phased reopening declarations in early June.
The guidance regarding work-from-home is a little less clear as it relates to financial institutions other than mortgage services, but it can be inferred that it applied to other financial institutions. In mid-March, the Division of Mortgage Lending issued a memorandum that provided provisional guidance to allow mortgage companies to work from home. This provision was set to expire on May 31, 2020, but according to the most recent letter was extended until the end of August. The letter seems to indicate that a similar provision was made for financial institutions that fall under the umbrella of the Financial Institutions Division, but insideARM was not able to locate a similar memorandum on Nevada's COVID-19 notices page. The closest connection found was that the expiration of the Financial Institutions Division provision is the same as the original expiration date of the Department of Mortgage Lending provision.
The letter states:
As of current date, Nevada requires in-state principal brick and mortar office requirements, in addition to any business addresses outside of this state, as well as mortgage loan originators, and other operational staff be associated with respective offices. As you can imagine, earlier in the year at start of health crisis Divisions cooperatively with other state agencies, Divisions leadership, and Nevada stakeholders determined that clearance was needed in order to aid in efforts of preventing spreading of disease, and therefore granted approval for telecommuting work. However, the Financial Institution Division’s temporary waiver for telecommuting outside of the authorized licensed location expired May 31, 2020 and has not been extended. The Mortgage Lending Division’s provision for telecommuting was extended till 8/31/2020.
The phrasing of the letter—which is, admittedly, not very clear—seems to state that employees of licensees must be "associated" with a brick-and-mortar office, even if it is out-of-state. This could cause a problem with using work-from-home agents to collect debts in Nevada as many agencies have transitioned to a primarily remote workforce. Taking into account the wide range of regulatory requirements for businesses across all states, the layers of complexity continue. Some states are slowly opening up again, while others remain stringent with their closure requirements. An agency with a physical location in a certain area might not have the option of returning employees to their office location—does that mean that collecting in Nevada is out of the picture for them?
Nevada seems to ignore certain realities. Many employees, especially those who are high risk or live with others who are high risk, feel unsafe returning to a physical work location. Some employees may not have the option to return to a physical office due to childcare and schooling needs as many schools have opted for virtual learning to begin this school year. Opening and operating a business today looks very different than before, with requirements for sanitation, protective equipment, and social distancing.
This issue is a great one to run by your legal counsel. It's also a great one to communicate with Nevada's regulators about. Sometimes, education is needed. If regulators don't hear about the adverse impacts of their opinions and guidance, they may not realize what the issues are.