Comprehensive banking law updates advanced

A comprehensive update of Nebraska’s banking laws received first-round approval Feb. 24.

Gothenburg Sen. Matt Williams, sponsor of LB140, said the bill is the result of a year of work by state senators, banking industry representatives and the state Department of Banking and Finance.

Stakeholders met monthly, he said, in order to review existing laws and suggest changes that would reduce regulatory complexity while still protecting consumers and preserving public confidence in Nebraska’s banking industry.

“To our knowledge, no comprehensive review or update to the current Nebraska Banking Act has occurred since its enactment in 1963,” Williams said.

Norfolk Sen. Jim Scheer, former chairperson of the Banking, Commerce and Insurance Committee, spoke in support of the bill, saying it was created through a process that included all interested parties.

“Nothing was brought forward in this bill that there was not unanimous approval on from all the stakeholders,” Scheer said.

Among other provisions, the bill would:
• allow a minor to open and maintain a safe deposit box;
• allow electronic filing of bank fidelity bonds with the state Department of Banking;
• 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 advanced to select file on a 35-0 vote.