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LB 474

Change and eliminate provisions relating to installment sales and installment loans and the Nebraska Money Transmitters Act, rename the Nebraska Installment Sales Act, transfer provisions of and eliminate the Nebraska Installment Loan Act, and change provisions of the Medicaid Access and Quality Act

109th Legislature (2025-2026)

LB 474 consolidates Nebraska's installment lending and money transmitters rules, tightens licensing and trust rules, and funds Medicaid Access/Quality with a 6% HMO premium tax.

Provisions/portions of LB232 amended into LB474 by AM669
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WeVote Research Nonpartisan
Bill Summary · LB 474

Summary — LB 474 (2025)

Status: Enacted — approved by Governor May 20, 2025
Introduced: Jan 21, 2025 (Banking, Commerce & Insurance Committee)
Operative date (majority of provisions): October 1, 2025
Additional effective date: certain tax provisions effective January 1, 2026

Purpose

LB 474, requested by the Nebraska Department of Banking and Finance, reorganizes and modernizes state law governing small-dollar lending and consumer installment transactions and substantially revises the Nebraska Money Transmitters Act. The bill also incorporates provisions from other bills (including portions of LB232, LB278, LB473 by amendment AM669) and makes limited changes to the Medicaid Access and Quality Act (tax provisions related to health maintenance organizations).

Key provisions

  • Rename and consolidate installment statutes

    • Renames the Nebraska Installment Sales Act to the “Nebraska Installment Loan and Sales Act.”
    • Transfers language and regulatory framework from the separate Nebraska Installment Loan Act into the Installment Sales Act, consolidating licensing, application, bond, branch-licensure, renewal, examinations, prohibited/unlicensed activity, change of control, and related provisions.
    • Repeals the standalone Nebraska Installment Loan Act and repeals or reorganizes many now-duplicative statutory sections.

  • Revisions to the Nebraska Money Transmitters Act

    • Redefines/eliminates certain terms and updates applicability and exemptions.
    • Clarifies licensure requirements, powers and duties of the Director of Banking and Finance, confidentiality, enforcement tools, required reports and audits, recordkeeping, authorized delegates, prohibited activities, and money transmission procedures (including refunds and receipts).
    • Strengthens oversight of authorized delegates: licensees must adopt written policies, perform reasonable risk-based background checks, and enter written contracts with delegates. Contracts must (at minimum) define scope, require compliance with applicable state and federal law (e.g., BSA, USA PATRIOT Act), impose trust requirements on funds, provide for examinations, and prohibit sub-delegation.
    • Establishes trust/segregation rules for funds received by authorized delegates and requires notification/cessation when a license is suspended, surrendered, or expired.
    • Updates solvency, surety bond, permissible investment, discipline, cease-and-desist, consent order, penalties, fees, and enforcement mechanics.

  • Medicaid Access and Quality Act (incorporated language)

    • Adds authority to collect a tax of up to 6% on gross non‑Medicare HMO direct-writing premiums (to the extent not preempted by federal law). The tax is to be effective Jan 1, 2026 and proceeds credited to the Medicaid Access and Quality Fund.
    • Directs DHHS to amend the Medicaid state plan (and take necessary federal steps) by specified deadlines (example language requires action by Aug 1, 2025 in amendments).

Who is affected

  • Installment lenders and sellers operating in Nebraska (existing licensees, applicants, and those previously regulated under the Installment Loan Act)
  • Financial institutions and building & loan associations (cross-references updated; certain licensing interactions clarified)
  • Money transmitters, their licensees and authorized delegates (new/clarified obligations and contractual requirements)
  • Consumers who obtain installment loans or use money transmission services in Nebraska
  • Health maintenance organizations (HMO premiums may be subject to the added tax beginning 2026)
  • Nebraska Department of Banking and Finance and Department of Health and Human Services (administration, enforcement, and state-plan changes)

Procedural/timeline highlights

  • Committee hearing: Feb 18, 2025 (Banking, Commerce & Insurance) — advanced with amendments.
  • Multiple committee and floor amendments adopted (notably AM307, AM669, AM1080, ER48). Portions of other bills were merged in by AM669.
  • Passed Legislature on Final Reading 49–0–0 (May 14, 2025).
  • Presented to Governor May 14, 2025; approved May 20, 2025.
  • Most sections become operative Oct 1, 2025; tax provisions effective Jan 1, 2026 (subject to federal preemption and required state plan amendments).

Fiscal/administrative notes

  • Multiple fiscal notes were filed (dates listed in the record), reflecting potential administrative costs to the Department of Banking and Finance, DHHS, and revenue impacts tied to the HMO premium tax. Readers should consult the fiscal notes for dollar estimates and budgetary impacts.

Practical effect

LB 474 consolidates and modernizes Nebraska’s regulation of consumer installment lending, tightens oversight of money transmission (especially the use of authorized delegates), and creates a funding mechanism for Medicaid access/quality via a targeted premium tax. The law increases regulatory clarity for licensees but also imposes new compliance, contract, and trust/segregation requirements on licensees and their delegates.

Compiled from official sources — confirm details with the bill’s official record.

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