LB1075 LB1075
2024 2024
LEGISLATURE OF NEBRASKA
ONE HUNDRED EIGHTH LEGISLATURE
SECOND SESSION
LEGISLATIVE BILL 1075
Introduced by Slama, 1.
Read first time January 09, 2024
Committee: Banking, Commerce and Insurance
1 A BILL FOR AN ACT relating to banking and finance; to amend sections
2 8-2729, 8-2730, 8-2735, 45-346, 45-346.01, 45-354, 45-737,
3 45-905.01, 45-912, 45-1005, 45-1018, and 45-1033.01, Reissue Revised
4 Statutes of Nebraska; to change provisions relating to applications,
5 background checks, registrations, and required notices under the
6 Nebraska Money Transmitters Act, the Nebraska Installment Sales Act,
7 and the Nebraska Installment Loan Act, registrations and background
8 checks under the Delayed Deposit Services Licensing Act, and
9 required notices under the Residential Mortgage Licensing Act; and
10 to repeal the original sections.
11 Be it enacted by the people of the State of Nebraska,
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1 Section 1. Section 8-2729, Reissue Revised Statutes of Nebraska, is
2 amended to read:
3 8-2729 Each application for a license under the Nebraska Money
4 Transmitters Act shall be made in writing and in a form prescribed by the
5 director. Each application shall state or contain:
6 (1) For all applicants:
7 (a) The exact name of the applicant, the applicant's principal
8 address, any fictitious or trade name used by the applicant in the
9 conduct of its business, and the location of the applicant's business
10 records;
11 (b) The history of the applicant's criminal convictions and material
12 litigation for the five-year period before the date of the application;
13 (c) A description of the activities conducted by the applicant and a
14 history of operations;
15 (d) A description of the business activities in which the applicant
16 seeks to be engaged in this state;
17 (e) A list identifying the applicant's proposed authorized delegates
18 in this state, if any, at the time of the filing of the application;
19 (f) A sample authorized delegate contract, if applicable;
20 (g) A sample form of payment instrument, if applicable;
21 (h) The locations at which the applicant and its authorized
22 delegates, if any, propose to conduct money transmission in this state;
23 and
24 (i) The name, address, and account information of each clearing bank
25 or banks, which shall be covered by federal deposit insurance, on which
26 the applicant's payment instruments and funds received for transmission
27 or otherwise will be drawn or through which the payment instruments or
28 other funds will be payable;
29 (2) If the applicant is a corporation, the applicant shall also
30 provide:
31 (a) The date of the applicant's incorporation and state of
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1 incorporation;
2 (b) A certificate of good standing from the state in which the
3 applicant was incorporated;
4 (c) A certificate of authority from the Secretary of State to
5 conduct business in this state;
6 (d) A description of the corporate structure of the applicant,
7 including the identity of any parent or subsidiary of the applicant, and
8 a disclosure of whether any parent or subsidiary is publicly traded on
9 any stock exchange;
10 (e) The name, business and residence addresses, and employment
11 history for the five-year period immediately before the date of the
12 application of the applicant's executive officers and the officers or
13 managers who will be in charge of the applicant's activities to be
14 licensed under the act;
15 (f) The name, business and residence addresses, and employment
16 history for the five-year period immediately before the date of the
17 application and the most recent personal financial statement of any key
18 shareholder of the applicant;
19 (g) The history of criminal convictions and material litigation for
20 the five-year period immediately before the date of the application of
21 every executive officer or key shareholder of the applicant;
22 (h) Background checks as provided in section 8-2730;
23 (i) (h) A copy of the applicant's most recent audited financial
24 statement including balance sheet, statement of income or loss, statement
25 of changes in shareholder equity, and statement of changes in financial
26 position and, if available, the applicant's audited financial statements
27 for the immediately preceding two-year period. However, if the applicant
28 is a wholly owned subsidiary of another corporation, the applicant may
29 submit either the parent corporation's consolidated audited financial
30 statements for the current year and for the immediately preceding two-
31 year period or the parent corporation's Form 10-K reports filed with the
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1 United States Securities and Exchange Commission for the prior three
2 years in lieu of the applicant's financial statements. If the applicant
3 is a wholly owned subsidiary of a corporation having its principal place
4 of business outside the United States, similar documentation filed with
5 the parent corporation's non-United States regulator may be submitted to
6 satisfy this subdivision; and
7 (j) (i) Copies of all filings, if any, made by the applicant with
8 the United States Securities and Exchange Commission or with a similar
9 regulator in a country other than the United States, within the year
10 preceding the date of filing of the application; and
11 (3) If the applicant is not a corporation, the applicant shall also
12 provide:
13 (a) The name, business and residence addresses, personal financial
14 statement, and employment history, for the five-year period immediately
15 before the date of the application, of each principal of the applicant
16 and the name, business and residence addresses, and employment history
17 for the five-year period immediately before the date of the application
18 of any other person or persons who will be in charge of the applicant's
19 money transmission activities;
20 (b) A copy of the applicant's registration or qualification to do
21 business in this state;
22 (c) The history of criminal convictions and material litigation for
23 the five-year period immediately before the date of the application for
24 each individual having any ownership interest in the applicant and each
25 individual who exercises supervisory responsibility with respect to the
26 applicant's activities; and
27 (d) Background checks as provided in section 8-2730; and
28 (e) (d) Copies of the applicant's audited financial statements
29 including balance sheet, statement of income or loss, and statement of
30 changes in financial position for the current year and, if available, for
31 the immediately preceding two-year period.
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1 Sec. 2. Section 8-2730, Reissue Revised Statutes of Nebraska, is
2 amended to read:
3 8-2730 (1) Effective July 1, 2014, the department shall require
4 licensees under the Nebraska Money Transmitters Act to be licensed and
5 registered through the Nationwide Mortgage Licensing System and Registry.
6 In order to carry out this requirement, the department is authorized to
7 participate in the Nationwide Mortgage Licensing System and Registry. For
8 this purpose, the department may establish, by adopting and promulgating
9 rules and regulations or by order, requirements as necessary. The
10 requirements may include, but are not limited to:
11 (a) Background checks of applicants and licensees, including, but
12 not limited to:
13 (i) Fingerprints of every executive officer, director, partner,
14 member, sole proprietor, or shareholder submitted to the Federal Bureau
15 of Investigation and any other governmental agency or entity authorized
16 to receive such information for a state, national, and international
17 criminal history record information check (i) Checks of an applicant's or
18 a licensee's criminal history through fingerprint or other databases,
19 except that the department shall not require the submission of
20 fingerprints by (A) an executive officer or director of an applicant or
21 licensee which is either a publicly traded company or a wholly owned
22 subsidiary of a publicly traded company or (B) an applicant or licensee
23 who has previously submitted the fingerprints of an executive officer, or
24 director, partner, member, sole proprietor, or shareholder directly to
25 the Nationwide Mortgage Licensing System and Registry and the Federal
26 Bureau of Investigation will accept such fingerprints for a criminal
27 background check;
28 (ii) Checks of civil or administrative records;
29 (iii) Checks of an applicant's or a licensee's credit history; or
30 (iv) Any other information as deemed necessary by the Nationwide
31 Mortgage Licensing System and Registry;
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1 (b) The payment of fees to apply for or renew a license through the
2 Nationwide Mortgage Licensing System and Registry;
3 (c) The setting or resetting, as necessary, of renewal processing or
4 reporting dates;
5 (d) Information and reports pertaining to authorized delegates; and
6 (e) Amending or surrendering a license or any other such activities
7 as the director deems necessary for participation in the Nationwide
8 Mortgage Licensing System and Registry.
9 (2) In order to fulfill the purposes of the act, the department is
10 authorized to establish relationships or contracts with the Nationwide
11 Mortgage Licensing System and Registry or other entities designated by
12 the Nationwide Mortgage Licensing System and Registry to collect and
13 maintain records and process transaction fees or other fees related to
14 licensees or other persons subject to the act. The department may allow
15 such system to collect licensing fees on behalf of the department and
16 allow such system to collect a processing fee for the services of the
17 system directly from each licensee or applicant for a license.
18 (3) The director is required to regularly report enforcement actions
19 and other relevant information to the Nationwide Mortgage Licensing
20 System and Registry subject to the provisions contained in section
21 8-2731.
22 (4) The director shall establish a process whereby applicants and
23 licensees may challenge information entered into the Nationwide Mortgage
24 Licensing System and Registry by the director.
25 (5) The department shall ensure that the Nationwide Mortgage
26 Licensing System and Registry adopts a privacy, data security, and breach
27 of security of the system notification policy. The director shall make
28 available upon written request a copy of the contract between the
29 department and the Nationwide Mortgage Licensing System and Registry
30 pertaining to the breach of security of the system provisions.
31 (6) The department shall upon written request provide the most
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1 recently available audited financial report of the Nationwide Mortgage
2 Licensing System and Registry.
3 (7) The director may use the Nationwide Mortgage Licensing System
4 and Registry as a channeling agent for requesting information from and
5 distributing information to the United States Department of Justice or
6 any other governmental agency in order to reduce the points of contact
7 which the Federal Bureau of Investigation may have to maintain for
8 purposes of subsection (1) of this section.
9 Sec. 3. Section 8-2735, Reissue Revised Statutes of Nebraska, is
10 amended to read:
11 8-2735 (1) A licensee shall file notice with the director within
12 thirty calendar days after any material change in information provided in
13 a licensee's application as prescribed by the director.
14 (2) A licensee shall file a report with the director within five
15 business days after the licensee has reason to know of the occurrence of
16 any of the following events:
17 (a) The filing of a petition by or against the licensee under any
18 bankruptcy law of the United States for liquidation or reorganization;
19 (b) The filing of a petition by or against the licensee for
20 receivership, the commencement of any other judicial or administrative
21 proceeding for its dissolution or reorganization, or the making of a
22 general assignment for the benefit of its creditors;
23 (c) The filing of an action to revoke or suspend the licensee's
24 license in a state or country in which the licensee engages in business
25 or is licensed;
26 (d) The cancellation or other impairment of the licensee's bond or
27 other security;
28 (e) A charge or conviction of the licensee or of an executive
29 officer, manager, or director of, or controlling person of, the licensee,
30 for a felony; or
31 (f) A charge or conviction of an authorized delegate for a felony.
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1 (3)(a) Except as provided in subdivisions (b) and (c) of this
2 subsection, a licensee shall notify the director in writing or through
3 the Nationwide Mortgage Licensing System and Registry within three
4 business days from the time that the licensee becomes aware of any breach
5 of security of the system of computerized data owned or licensed by the
6 licensee, which contains personal information about a Nebraska resident,
7 or the unauthorized access to or use of such information about a Nebraska
8 resident as a result of the breach.
9 (b) If a licensee would be required under Nebraska law to provide
10 notification to a Nebraska resident regarding such incident, then the
11 licensee shall provide a copy of such notification to the department
12 prior to or simultaneously with the licensee's notification to the
13 Nebraska resident.
14 (c) Notice required by this subsection may be delayed if a law
15 enforcement agency determines that the notice will impede a criminal
16 investigation. Notice shall be made in good faith, without unreasonable
17 delay, and as soon as possible after the law enforcement agency
18 determines that notification will no longer impede the investigation.
19 (d) For purposes of this subsection, the terms breach of the
20 security of the system and personal information have the same meaning as
21 in section 87-802.
22 Sec. 4. Section 45-346, Reissue Revised Statutes of Nebraska, is
23 amended to read:
24 45-346 (1) A license issued under the Nebraska Installment Sales Act
25 is nontransferable and nonassignable. The same person may obtain
26 additional licenses for each place of business operating as a sales
27 finance company in this state upon compliance with the act as to each
28 license, except that on or after January 1, 2020, a person is no longer
29 required to obtain a new license for each place of business and may
30 maintain a branch office or offices upon compliance with the act.
31 (2) Application for a license shall be on a form prescribed and
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