AB 500 — Nevada Payments Bank Act (BDR 55‑999) — Summary
Status: Introduced Feb 10, 2025. Passed Assembly (3/23–5/23/2025) with amendments; advanced to the Senate where it was referred to committees and ultimately held under submission (last legislative action: 08/29/2025). Final: No further action taken.
Main purpose
Create a new Nevada state‑chartered “payments bank” — a narrowly scoped, non‑lending depository institution designed to facilitate payment activity (merchant acquiring, money transmission, deposit accounts and direct access to payment rails) — and establish licensing, supervision, operational limits, and liquidation procedures under the Commissioner of Financial Institutions.
Key provisions and structure
Definition and scope
- Establishes “payments banks” as a new charter category; defines permitted activities (e.g., merchant acquiring, money transmission, deposit account maintenance) and expressly prohibits making loans or engaging in loan‑related activities.
- Authorizes payments banks to establish and maintain offices in Nevada and conduct merchant acquiring (as defined in the bill).
Licensing and supervision
- Licenses and ongoing regulation by the Commissioner of Financial Institutions (extensive supervisory powers, examination authority, auditing and reporting requirements).
- Commissioner may require letters of credit, holding company guarantees, capital thresholds, bond coverage, and other conditions tailored to payment risks.
Deposit protection options
- Deposits must be insured by the FDIC or by a private insurer approved by both the Commissioner and the Commissioner of Insurance; alternatively, a payments bank may request approval to operate without such insurance only if it posts an approved surety bond or pledges qualifying assets.
- Investments of deposits are limited to high‑quality, liquid instruments (e.g., U.S. Treasuries, deposits at FDIC‑insured institutions).
Safety and operational limits
- Tailored capital and liquidity requirements (designed to address operational/transaction risks such as chargebacks).
- Aggregate borrowing limits tied to deposit insurance status.
- Restrictions on advertising, business names, board composition and governance duties; criminal/administrative penalties for specified misconduct.
- Procedures for voluntary and involuntary liquidation, including when FDIC is involved.
Fees and funding
- Transaction fee for supervision in reprints/amendments: 0.025% of each transaction effected through merchant acquiring (amendments adjusted this rate and other fee and filing amounts).
- Amendments and fiscal notes add an appropriation; debate over whether Financial Institutions Division (FID) or State should fund implementation.
Special provisions
- Exempts participants in the state’s Regulatory Experimentation Program for Product Innovation from the payments bank requirements.
- Proposed amendments authorize the Nevada Secretary of State to obtain a payments bank license to serve only governmental entities.
Who would be affected
- Fintechs, money transmitters, remittance businesses and payment processors seeking direct access to national payment rails (ACH, Fedwire, RTP, FedNow).
- Merchants and consumers potentially benefiting from increased competition and lower merchant fees.
- Nevada Financial Institutions Division (regulatory workload and funding implications) and state government (supervision and potential fiscal impacts).
- Traditional banks and sponsor bank relationships (may shift relationships and market dynamics).
Potential impacts and issues raised
Supporters argue:
- Creates state pathway for non‑bank payment firms to access payment infrastructure directly, increase competition, lower costs, and foster innovation (letters from Viamericas, Hey Zoe).
Opponents and concerns:
- FID raised capacity and funding concerns — argues Division may lack resources and statutory safeguards to supervise a depository that accepts deposits and invests them.
- Risk to depositors if reliance on surety bonds or private insurance replaces FDIC coverage; concerns about state exposure in liquidation scenarios.
- Nevada Bankers Association opposed until the Division’s implementation costs are formally allocated away from supervised banks.
Legislative history & key actions
- Introduced Feb 10, 2025; multiple committee referrals and amendments (notable Assembly Amendments No. 890 and 966).
- Passed Assembly May 23, 2025 (Ayes 73–0); subsequent reprints and amendments changed fee language, added appropriation language, and altered the supermajority requirement in different drafts.
- In the Senate, referred to Rules and Appropriations committees; last noted as held under submission (08/29/2025). The bill’s recorded status here is “No further action taken.”
Notable amendments considered
- Increased transaction fee from 0.0025% to 0.025% (assembly amendment).
- Conceptual amendments proposed to raise filing fees, require private insurance equivalence to FDIC, allow Secretary of State to operate a payments bank for governments, require Commissioner rulemaking and reporting, and to set supervision/examination rates for payments banks separately.
- Debate over whether the bill requires a two‑thirds vote for final passage was modified across reprints.
This summary captures the bill’s intent to create a regulated, non‑lending payments bank charter in Nevada, the main statutory mechanisms proposed to supervise them, stakeholders’ positions, and the bill’s procedural progression through the 2025 legislative session.
