Summary — LB 251 (2025)
Title: Adopt changes to federal law regarding banking and finance and change provisions regarding loan limits, branch banking, failing financial institutions, credit unions, surety bonds, and interest rates for damages payable to irrigation districts
Introduced by: Sen. Mike Jacobson
Status: Approved by Governor (signed March 11, 2025). Emergency clause — effective on signature.
Purpose and intent
LB 251, requested by the Nebraska Department of Banking and Finance, updates and harmonizes Nebraska banking, finance, insurance, and Uniform Commercial Code (UCC) statutes with recent federal law and regulatory changes. The bill also modernizes and clarifies multiple state provisions governing use of the word “bank,” lending limits, branch application procedures, failing/failed financial institution processes, mortgage lender bonds, loan-broker exemptions, treatment of digital asset depositories, and interest for condemnation damages payable to irrigation districts.
Key provisions (by topic)
- Adoption of federal updates and UCC changes: Amends several statutory provisions (including UCC section 4A-108) to conform state law to federal statutes/regulations affecting electronic funds transfers, payments, and related commercial provisions.
- Use of the word “bank”: Revises section 8-113 to address usage exceptions and expressly accommodates digital asset depository institutions (including limits on use when applications are pending and a 30‑day cessation requirement if denied).
- Loans and lending limits: Amends statutes governing single‑borrower loan limits and related restrictions (e.g., section 8-141 and others) to harmonize with updated regulatory standards (textual clarifications and cross‑references).
- Branching and public notice: Updates publication/notice requirements tied to bank and credit union branch applications and harmonizes branch‑related procedural language.
- Failing and out‑of‑state institutions: Modifies statutory language governing emergency acquisitions and failing‑institution procedures to reflect federal practice and allow appropriate state coordination.
- Securities, broker‑dealer, and funding agreements: Clarifies definitions (e.g., securities under 8-1101) and clarifies regulation of insurers’ funding agreements (section 44-708) — giving the Director of Insurance sole authority to regulate issuance and sale of funding agreements.
- Loan Broker Act and surety bonds: Adjusts exemptions and bond requirements for mortgage lenders, loan brokers, and related licensees.
- Interest for irrigation district damages: Changes how interest is calculated/paid for condemnation damages payable to irrigation districts (statutory update; no new numeric rate printed in summary text).
- Interest‑rate exceptions: Updates section 45-101.04 to clarify categories of loans and transactions exempt from state rate limitations (e.g., certain institutional loans, loans ≥ $25,000, government‑backed loans, specified collateralized loans).
Who is affected
- State‑chartered and federally chartered banks, bank holding companies, savings institutions, credit unions, mortgage lenders, loan brokers, insurers, and digital asset depository entities.
- Consumers and borrowers (through clarified lending limits, exemptions, and notice procedures).
- Irrigation districts (through changes to condemnation damage interest).
- Department of Banking and Finance and the Director of Insurance (regulatory authority and implementation responsibilities).
Procedural timeline & effective date
- Introduced: Jan 14, 2025; Referred to Banking, Commerce & Insurance Committee; hearing Jan 28, 2025.
- Advanced from committee to General File (committee roll call recorded; proponents included the Department and industry groups).
- Enrollment and Review amendments (ER9 and ST6) adopted during legislative process.
- Passed Final Reading with emergency clause (legislative vote 47–1–1). Presented and signed by legislative leaders March 6, 2025. Approved by Governor March 11, 2025.
- Emergency clause: statute effective immediately upon signature (March 11, 2025).
Potential impacts
- Brings Nebraska statutes into closer alignment with federal payment, banking, and securities laws — reducing legal ambiguity and easing compliance for regulated entities.
- Clarifies treatment of digital asset depositories and funding agreements, potentially facilitating fintech innovation while preserving regulatory oversight.
- Alters regulatory and consumer frameworks (lending limits, notice requirements, bond/exemption standards) that could affect bank and nonbank lending practices and licensing requirements.
- Immediate effect due to emergency clause — regulated entities and supervisors should review and implement changes without delay.
Selected statutes amended (highlights)
Reissue Revised Statutes of Nebraska: 8-113, 8-157, 8-226, 8-305, 8-1506, 21-1725.01, 21-1728, 44-708, 45-101.04, 45-190, 45-724, 59-1715, 76-710.02.
Revised Statutes Cumulative Supplement, 2024: 8-135, 8-141, 8-143.01, 8-157.01, 8-183.04, 8-1,140, 8-318, 8-355, 8-1101, 8-1101.01, 8-1704, 8-1707, 8-2724, 8-2903, 8-3005, 8-3007, 21-17,102, 21-17,115, 59-1722, 69-2103, 69-2104, 69-2112.
Uniform Commercial Code (Revised Statutes Cumulative Supplement, 2024): section 4A-108.
If you want, I can produce a side‑by‑side comparison of the former vs. new text for any specific section (for example, section 8-113 or 45-101.04).
