Banking, Commerce and Insurance Committee
February 18, 2025
Committee Chair: Sen. Mike Jacobson | Bills Heard: 4 | Full Transcript (PDF)
LB474: Modernize the Installment Loan Act and Installment Sales Act
Introduced by: Sen. Mike Jacobson | Testimony: 1 proponents, 0 opponents, 1 neutral | Read bill text (PDF)
Nebraska modernizes consumer lending regulation by merging two oversight systems. LB474 combines the Installment Loan Act and Installment Sales Act into a single coordinated framework, eliminating redundant processes that have hindered the industry for years.
Why it matters: The bill removes more than 50 outdated statutes and eliminates costly publication and hearing requirements that currently delay loan company applications. It authorizes branch licensing, allowing regulators to examine multiple offices under one license rather than separately—a change that will free up examiner time and reduce costs for both the industry and the state.
What they're saying: - Director Kelly Lammers: "Over the last 4 years, we've received zero objections from the public on any of the application notices that we have published on the installment loan licenses." - Sen. Jacobson: "This is really more about streamlining what's already out there."
By the numbers: As of year-end 2024, Nebraska licensed 139 installment loan companies, up from just 2 in 2019. The department currently examines these licensees individually; the bill would allow consolidated examinations.
What's next: No vote was taken. The committee received one neutral letter and no opponent testimony. The bill includes AM307, which clarifies that loans originated by out-of-state financial institutions retain their original interest rates when serviced by Nebraska-licensed parties.
Committee sentiment: Supportive: Sen. Bob Hallstrom, Sen. Matt Dungan
Sentiment estimated from questions and comments — not stated positions.
LB473: Update the Nebraska Money Transmitters Act based on model law
Introduced by: Sen. Mike Jacobson | Testimony: 1 proponents, 0 opponents, 1 neutral | Read bill text (PDF)
Nebraska adopts nationwide model law to regulate money transmitters more efficiently. LB473 updates the Money Transmitters Act to harmonize with 27 other states that have already adopted the model law, streamlining regulation of an industry that has more than doubled in size over the past decade.
Why it matters: Money transmitter licensing in Nebraska has exploded from 73 companies in 2015 to 190 as of February 2025. The model law approach allows the state to regulate this rapidly growing payments industry more efficiently while maintaining consumer protections. The bill also increases licensing fees modestly—from $1,000 to $1,500 for initial applications and from $250 to $750 for renewals—bringing Nebraska in line with other states.
What they're saying: - Director Kelly Lammers: "LB473 addresses a substantial increase in the volume of oversight required as this industry continues to expand." - John Lindsay, Independent Payroll Providers Association: Small payroll processors with 20 or fewer employees would face closure if forced to register in all states adopting the model law.
By the numbers: Money transmitter licensing has more than doubled in 10 years. As of February 5, 2025, Nebraska licensed 190 money transmitters. The bill carries an October 1, 2025 effective date to align with the 2026 renewal period.
What's next: No vote was taken. The committee received one proponent letter and no opponent letters. One neutral testifier raised concerns about small payroll processors, but the department indicated willingness to continue conversations.
Committee sentiment: Supportive: Sen. Bob Hallstrom, Sen. Brad von Gillern, Sen. Merv Riepe
Sentiment estimated from questions and comments — not stated positions.
LB201: Impose a fee on remittances sent outside the United States
Introduced by: Sen. Kathleen Kauth | Testimony: 4 proponents, 3 opponents, 0 neutral | Read bill text (PDF)
Senator Kauth proposes fee on international money transfers, drawing sharp committee skepticism. LB201 would impose a $5 fee on remittances under $500 and 1% on larger transfers sent outside the U.S., modeled after Oklahoma's 16-year-old law. The bill aims to keep money earned in Nebraska circulating in the state economy and generate $3.5-$4 million annually.
Why it matters: Nebraska transmitted $376 million through money transmitters in the first three quarters of 2024. Proponents argue that remittances represent lost tax revenue and economic activity, while also potentially funding cartel operations. However, the bill faces significant opposition from the money services industry, immigrant advocacy groups, and committee members concerned about unintended consequences.
What they're saying: - Shari Rendall, FAIR: "Up to 10% of all Mexican-bound remittances, $4.4 billion may be drug money moved by cartels." - Burke Harr, Money Services Round Table: "The tax would only be imposed on licensed money transmitters and not on other financial institutions in Nebraska that provide similar cross-border fund transfers." - Sen. Dungan: "We're penalizing people who are trying to help out their family."
By the numbers: In 2024, the U.S. sent $29.92 billion in remittances globally. Oklahoma's similar law, in effect since 2009, raises approximately $13 million annually. Implementation costs estimated at $700,000-$800,000.
What's next: No vote was taken. The committee received 1 proponent letter and 15 opponent letters. Sen. Kauth did not close, having chosen to testify in another committee. Significant concerns remain about constitutional issues, unintended consequences for military members and students abroad, and whether the fee effectively targets cartels or simply penalizes legitimate family remittances.
Committee sentiment: Skeptical: Sen. Matt Dungan, Sen. Merv Riepe, Sen. Dave Wordekemper, Sen. Brad von Gillern, Sen. Bob Hallstrom
Sentiment estimated from questions and comments — not stated positions.
LB591: Clarify and streamline Installment Loan Act licensing and examination requirements
Introduced by: Sen. Beau Ballard | Testimony: 1 proponents, 0 opponents, 1 neutral | Read bill text (PDF)
Bill seeks to clarify passive investor rules and streamline loan company examinations. LB591 addresses two issues created by recent expansions to the Installment Loan Act: it clarifies that passive investors in loan entities should not require licensing, and it allows consolidated examinations for affiliated companies controlled by the same parent.
Why it matters: Recent amendments to the Installment Loan Act significantly expanded licensing requirements, creating regulatory burdens with limited consumer benefits in some cases. The bill aims to reduce unnecessary compliance costs while maintaining robust consumer protections. For companies like Nelnet that hold loan portfolios in different affiliates for tax or business reasons, separate examinations of each affiliate are redundant and costly.
What they're saying: - Ben Kiser, Nelnet: "When loans are securitized, there could be a dozen or more investors buying bonds secured by the loans. Investors don't own or manage the loans and have no interaction with the consumer." - Director Kelly Lammers: "The department has been in meetings with stakeholders of LB591 for sometime...in an attempt to resolve everyone's concerns and we're willing to continue such conversations."
By the numbers: The department noted that the multistate licensing system has been in place since 2008 and already allows some consolidated authority.
What's next: No vote was taken. The committee received one proponent letter and no opponent letters. The department testified in neutral capacity, indicating concerns are primarily definitional. Sen. Ballard indicated the parties are "fairly close" to an agreement and committed to working with the Department of Banking and the committee.
Committee sentiment: Supportive: Sen. Bob Hallstrom, Sen. Mike Jacobson, Sen. Brad von Gillern
Sentiment estimated from questions and comments — not stated positions.
Session Notes
Committee Chair Sen. Mike Jacobson opened the hearing with standard procedural announcements regarding testifier sheets, time limits (3-minute green light system), and written position letter submission deadlines. The committee heard four bills. No votes were taken on any bills. The committee did not executive on any bills, as Sen. Hardin was unavailable. Committee members present included Sen. Merv Riepe, Sen. Brad von Gillern, Sen. Bob Hallstrom, and Sen. Dave Wordekemper. Legal counsel Joshua Christolear and committee clerk Laurie assisted the committee.
Generated by NE Wire Service | Source: Nebraska Legislature Transcribers Office This is an AI-generated summary. Verify all claims against the official transcript.