Comprehensive banking law updates amended, advanced

A comprehensive update of Nebraska’s banking laws was amended and advanced from select file March 16.

<a href='' target='_blank' title='Link to the website of Sen. Matt Williams'>Sen. Matt Williams</a>
Sen. Matt Williams

Gothenburg Sen. Matt Williams, sponsor of LB140, said the bill is the first comprehensive update of the state’s banking laws since 1963.

Williams offered an amendment that incorporated provisions of three additional bills.

LB196, introduced by Omaha Sen. Joni Craighead, would provide an annual update of statutory reference dates to align state financial institutions with their federal counterparts.

LB454, introduced by Omaha Sen. Brett Lindstrom, would allow credit unions in Nebraska to opt out of licensing of its executive officers by the state Department of Banking and Finance.

LB341, also introduced by Lindstrom, would clarify provisions relating to the license suspension or revocation of an executive officer who is acting in an unsafe or unauthorized manner or endangering the interests of stockholders or depositors.

The director of the state Department of Banking and Finance could levy a maximum $10,000 personal civil penalty against an executive officer whose license is suspended or revoked. An individual whose authority has been revoked or suspended with prejudice could not act as an executive officer at any other bank without authorization from the department.

The amendment was adopted on a 35-0 vote.

Among other provisions, LB140 would:
• allow a minor to open and maintain a safe deposit box;
• allow electronic filing of bank fidelity bonds with the department;
• require banks that employ a mortgage loan originator to register that employee with the Nationwide Mortgage Licensing System;
• allow a bank to acquire the stock of another financial institution if the transaction is part of the merger, consolidation or acquisition of assets of the other institution;
• authorize an increase in the maximum number of a bank board of directors from 15 to 25 and require that a bank president be a member of the board;
• prohibit bank-affiliated individuals from being paid a higher rate of interest on deposits than paid by the bank for similar deposits and provide that a violation is a Class IV felony; and
• allow a bank, in a state of emergency, to open a temporary office to conduct business for up to 30 months, or allow a mobile branch to serve as a temporary emergency branch office.

The bill also would repeal obsolete sections of the state’s banking laws. LB140 was advanced to final reading by voice vote.

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