LB674 LB674
2023 2023
LEGISLATURE OF NEBRASKA
ONE HUNDRED EIGHTH LEGISLATURE
FIRST SESSION
LEGISLATIVE BILL 674
Introduced by Jacobson, 42.
Read first time January 18, 2023
Committee: Banking, Commerce and Insurance
1 A BILL FOR AN ACT relating to banking and finance; to amend sections
2 8-101.03, 8-115, 8-602, 8-3002, 8-3003, 8-3004, 8-3005, 8-3007,
3 8-3008, 8-3011, 8-3012, 8-3013, 8-3014, 8-3015, 8-3016, 8-3017,
4 8-3018, 8-3019, 8-3020, 8-3021, 8-3022, 8-3023, 8-3025, 8-3026,
5 8-3028, and 8-3030, Reissue Revised Statutes of Nebraska; to
6 redefine terms; to change and eliminate provisions relating to
7 appeals, digital asset depositories, digital asset depository
8 accounts, charters, conditions to commence business, customers,
9 required reports, surety bonds, voluntary dissolution, financial
10 institutions, legislative findings and declarations, and powers and
11 duties of the Director of Banking and Finance; to adopt updates to
12 federal law relating to digital asset depositories and digital asset
13 depository customers; to harmonize provisions; to repeal the
14 original sections; and to declare an emergency.
15 Be it enacted by the people of the State of Nebraska,
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1 Section 1. Section 8-101.03, Reissue Revised Statutes of Nebraska,
2 is amended to read:
3 8-101.03 For purposes of the Nebraska Banking Act, unless the
4 context otherwise requires:
5 (1) Access device means a code, a transaction card, or any other
6 means of access to a customer's account, or any combination thereof, that
7 may be used by a customer for the purpose of initiating an electronic
8 funds transfer at an automatic teller machine or a point-of-sale
9 terminal;
10 (2) Acquiring financial institution means any financial institution
11 establishing a point-of-sale terminal;
12 (3) Automatic teller machine means a machine established and located
13 in the State of Nebraska, whether attended or unattended, which utilizes
14 electronic, sound, or mechanical signals or impulses, or any combination
15 thereof, and from which electronic funds transfers may be initiated and
16 at which banking transactions as defined in section 8-157.01 may be
17 conducted. An unattended automatic teller machine shall not be deemed to
18 be a branch operated by a financial institution;
19 (4) Automatic teller machine surcharge means a fee that an operator
20 of an automatic teller machine imposes upon a consumer for an electronic
21 funds transfer, if such operator is not the financial institution that
22 holds an account of such consumer from which the electronic funds
23 transfer is to be made;
24 (5) Bank or banking corporation means any incorporated banking
25 institution which was incorporated under the laws of this state as they
26 existed prior to May 9, 1933, and any corporation duly organized under
27 the laws of this state for the purpose of conducting a bank within this
28 state under the act. Bank means any such banking institution which is, in
29 addition to the exercise of other powers, following the practice of
30 repaying deposits upon check, draft, or order and of making loans. Bank
31 or banking corporation includes a digital asset depository institution as
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1 defined in section 8-3003. Notwithstanding the provisions of this
2 subdivision, a digital asset depository institution is subject to the
3 provisions of subdivision (2)(b) of section 8-3005;
4 (6)(a) Bank subsidiary means a corporation or limited liability
5 company that:
6 (i) Has a bank as a shareholder, member, or investor; and
7 (ii) Is organized for purposes of engaging in activities which are
8 part of the business of banking or incidental to such business except for
9 the receipt of deposits.
10 (b) A bank subsidiary may include a corporation organized under the
11 Nebraska Financial Innovation Act.
12 (c) A bank subsidiary is not to be considered a branch of its bank
13 shareholder;
14 (7) Capital or capital stock means capital stock;
15 (8) Data processing center means a facility, wherever located, at
16 which electronic impulses or other indicia of a transaction originating
17 at an automatic teller machine are received and either authorized or
18 routed to a switch or other data processing center in order to enable the
19 automatic teller machine to perform any function for which it is
20 designed;
21 (9) Department means the Department of Banking and Finance;
22 (10) Digital asset depository means a financial institution that
23 securely holds liquid assets when such assets are in the form of
24 controllable electronic records, either as a corporation organized,
25 chartered, and operated pursuant to the Nebraska Financial Innovation Act
26 as a digital asset depository institution, or a financial institution
27 operating a digital asset depository business as a digital asset
28 depository department under a charter granted grant of authority by the
29 director;
30 (11) Director means the Director of Banking and Finance;
31 (12) Financial institution means a bank, savings bank, building and
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1 loan association, savings and loan association, or credit union, whether
2 chartered by the United States, the department, or a foreign state
3 agency; any other similar organization which is covered by federal
4 deposit insurance; a trust company; or a digital asset depository that is
5 not a digital asset depository institution;
6 (13) Financial institution employees includes parent holding company
7 and affiliate employees;
8 (14) Foreign state agency means any duly constituted regulatory or
9 supervisory agency which has authority over financial institutions and
10 which is created under the laws of any other state, any territory of the
11 United States, Puerto Rico, Guam, American Samoa, the Trust Territory of
12 the Pacific Islands, or the Virgin Islands or which is operating under
13 the code of law for the District of Columbia;
14 (15) Impulse means an electronic, sound, or mechanical impulse, or
15 any combination thereof;
16 (16) Insolvent means a condition in which (a) the actual cash market
17 value of the assets of a bank is insufficient to pay its liabilities to
18 its depositors, (b) a bank is unable to meet the demands of its creditors
19 in the usual and customary manner, (c) a bank, after demand in writing by
20 the director, fails to make good any deficiency in its reserves as
21 required by law, or (d) the stockholders of a bank, after written demand
22 by the director, fail to make good an impairment of its capital or
23 surplus;
24 (17) Making loans includes advances or credits that are initiated by
25 means of credit card or other transaction card. Transaction card and
26 other transactions, including transactions made pursuant to prior
27 agreements, may be brought about and transmitted by means of an
28 electronic impulse. Such loan transactions including transactions made
29 pursuant to prior agreements shall be subject to sections 8-815 to 8-829
30 and shall be deemed loans made at the place of business of the financial
31 institution;
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1 (18) Order includes orders transmitted by electronic transmission;
2 (19) Point-of-sale terminal means an information processing terminal
3 which utilizes electronic, sound, or mechanical signals or impulses, or
4 any combination thereof, which are transmitted to a financial institution
5 or which are recorded for later transmission to effectuate electronic
6 funds transfer transactions for the purchase or payment of goods and
7 services and which are initiated by an access device. A point-of-sale
8 terminal is not a branch operated by a financial institution. Any
9 terminal owned or operated by a seller of goods and services shall be
10 connected directly or indirectly to an acquiring financial institution;
11 and
12 (20) Switch means any facility where electronic impulses or other
13 indicia of a transaction originating at an automatic teller machine are
14 received and are routed and transmitted to a financial institution or
15 data processing center, wherever located. A switch may also be a data
16 processing center.
17 Sec. 2. Section 8-115, Reissue Revised Statutes of Nebraska, is
18 amended to read:
19 8-115 No corporation shall conduct a bank or digital asset
20 depository in this state without having first obtained a charter or under
21 a grant of authority in the case of a digital asset depository in the
22 manner provided in the Nebraska Banking Act or the Nebraska Financial
23 Innovation Act, respectively.
24 Sec. 3. Section 8-602, Reissue Revised Statutes of Nebraska, is
25 amended to read:
26 8-602 The Director of Banking and Finance shall charge and collect
27 fees for certain services rendered by the Department of Banking and
28 Finance according to the following schedule:
29 (1) For filing and examining articles of incorporation, articles of
30 association, and bylaws, except credit unions, one hundred dollars, and
31 for credit unions, fifty dollars;
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1 (2) For filing and examining an amendment to articles of
2 incorporation, articles of association, and bylaws, except credit unions,
3 fifty dollars, and for credit unions, fifteen dollars;
4 (3) For issuing to banks, credit card banks, trust companies, and
5 building and loan associations a charter, authority, or license to do
6 business in this state, a sum which shall be determined on the basis of
7 one dollar and fifty cents for each one thousand dollars of authorized
8 capital, except that the minimum fee in each case shall be two hundred
9 twenty-five dollars;
10 (4) For issuing to digital asset depositories under the Nebraska
11 Financial Innovation Act a charter, an authority, or a license to do
12 business in this state, the sum of fifty thousand dollars;
13 (5) For issuing an executive officer's or loan officer's license,
14 fifty dollars at the time of the initial license, except credit unions
15 for which the fee shall be twenty-five dollars at the time of the initial
16 license;
17 (6) For affixing certificate and seal, five dollars;
18 (7) For making substitution of securities held by it and issuing a
19 receipt, fifteen dollars;
20 (8) For issuing a certificate of approval to a credit union, ten
21 dollars;
22 (9) For investigating the applications required by sections 8-117,
23 8-120, 8-331, and 8-2402 and the documents required by section 8-201, the
24 cost of such examination, investigation, and inspection, including all
25 legal expenses and the cost of any hearing transcript, with a minimum fee
26 under (a) sections 8-117, 8-120, and 8-2402 of two thousand five hundred
27 dollars, (b) section 8-331 of two thousand dollars, and (c) section 8-201
28 of one thousand dollars. The department may require the applicant to
29 procure and give a surety bond in such principal amount as the department
30 may determine and conditioned for the payment of the fees provided in
31 this subdivision;
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1 (10) For the handling of pledged securities as provided in sections
2 8-210, and 8-2727, and 8-3022 at the time of the initial deposit of such
3 securities, one dollar and fifty cents for each thousand dollars of
4 securities deposited and a like amount on or before January 15 each year
5 thereafter. The fees shall be paid by the entity pledging the securities;
6 (11) For investigating an application to move its location within
7 the city or village limits of its original license or charter for banks,
8 trust companies, and building and loan associations, two hundred fifty
9 dollars;
10 (12) For investigating an application under subdivision (6) of
11 section 8-115.01, five hundred dollars;
12 (13) For investigating an application for approval to establish or
13 acquire a branch pursuant to section 8-157 or 8-2103 or to establish a
14 mobile branch pursuant to section 8-157, two hundred fifty dollars;
15 (14) For investigating a notice of acquisition of control under
16 subsection (1) of section 8-1502, five hundred dollars;
17 (15) For investigating an application for a cross-industry merger
18 under section 8-1510, five hundred dollars;
19 (16) For investigating an application for a merger of two state
20 banks, a merger of a state bank and a national bank in which the state
21 bank is the surviving entity, or an interstate merger application in
22 which the Nebraska state chartered bank is the resulting bank, five
23 hundred dollars;
24 (17) For investigating an application or a notice to establish a
25 branch trust office, five hundred dollars;
26 (18) For investigating an application or a notice to establish a
27 representative trust office, five hundred dollars;
28 (19) For investigating an application to establish a credit union
29 branch under section 21-1725.01, two hundred fifty dollars;
30 (20) For investigating an applicant under section 8-1513, five
31 thousand dollars;
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1 (21) For investigating a request to extend a conditional bank
2 charter under section 8-117, one thousand dollars; and
3 (22) For investigating an application to establish a branch office,
4 for a merger or an acquisition of control, or for a request to extend a
5 conditional charter for a digital asset depository, five hundred dollars.
6 Sec. 4. Section 8-3002, Reissue Revised Statutes of Nebraska, is
7 amended to read:
8 8-3002 The Legislature finds and declares that:
9 (1) Economic development initiatives demand buy-in and input from
10 community stakeholders across multiple industries. The Legislature should
11 send a strong message that Nebraska wants to bring high-tech jobs and
12 digital asset operations to our state. Nebraska has an incredible
13 opportunity to be a leader in this emerging technology;
14 (2) Nebraska desires to create an entrepreneurial ecosystem where
15 young talent can be paired with private investors in order to create
16 jobs, enhance our quality of life, and prevent the brain drain that is
17 particularly acute in rural Nebraska. If Nebraska does not make
18 intentional and meaningful changes to how it recruits and retains young
19 people, Nebraska will be left behind;
20 (3) The rapid innovation of blockchain and digital ledger
21 technology, including the growing use of virtual currency, digital
22 assets, and other controllable electronic records has complicated the
23 development of blockchain services and products in the marketplace;
24 (4) Blockchain innovators are able and willing to address banking
25 compliance challenges such as federal customer identification, anti-money
26