Assembly committee hears long debate on Nevada Payments Bank Act creating new state charter for payments firms

Assemblymember Steve Yeager, sponsor of Assembly Bill 500, told the Assembly Commerce and Labor Committee the measure would establish a new Nevada payments bank charter to regulate companies that focus on processing payments rather than making loans.

Yeager (Assembly District 9) said the Nevada Payments Bank Act would create a specialized state banking charter for firms that “move money” and would allow qualified companies to apply for direct access to core payment systems such as ACH, Fedwire and FedNow. “This is legislation that puts Nevada at the cutting edge of financial innovation,” Yeager said.

Supporters argued the charter would cut costs and reduce dependence on traditional full‑service banks. Brian Wachter, senior vice president of the Retail Association of Nevada, said merchants pay multiple layers of fees today and that new entrants under the charter would “simplify everything for businesses” by reducing middlemen and lowering processing costs. Paul Dwyer, co‑founder and CEO of Via Americas, and Adam Shapiro, partner at Claros Group, told the committee state charters for payment‑focused firms have worked in other countries and in several U.S. states as a way to align regulation with activity.

Proponents described guardrails in the bill. Adam Shapiro said the charter limits risks that payment banks can take, notably by prohibiting lending and requiring investments in high‑quality liquid assets; he said protections such as standards for customer due diligence, suspicious activity reporting and treatment of unauthorized transactions would mirror bank‑grade controls where applicable. Simon McLoughlin, CEO of Uphold, said the charter would give fintech firms greater certainty of access to U.S. payment rails.

Opponents and skeptical stakeholders raised implementation and oversight concerns. Connor Kane of the Nevada Bankers Association said regulators must apply “the same high standards” as to other institutions and warned the Financial Institutions Division (FID) will need resources to supervise the new charter. Kane said the association remained open to conversations but was opposed to the bill in its current form.

Committee members pressed witnesses about FDIC insurance and alternatives. Brian Wachter said the bill allows applicants to meet deposit protection requirements through FDIC insurance or alternatives such as private insurance, surety bonding and other guarantees acceptable to the commissioner. Greg Kidd, a former Federal Reserve staffer who now invests in fintech, said the federal regulators determine access to the Fed’s payment rails and that institutions without FDIC insurance would typically need to obtain permission or operate through correspondent arrangements.

Committee questions also focused on consumer impact, business continuity and job creation. Witnesses said the charter could create compliance, risk and technology jobs in Nevada and that lower merchant acquiring costs could translate to savings for businesses and — indirectly — consumers. Greg Kidd illustrated price differences in transaction processing, saying, “I know what we charge for a bank to do an ACH transaction, and I know what we pay for that transaction when we're doing bill pay. We pay 25¢, and the Federal Reserve charges a quarter of a cent.” Advocates said better access and competition could reduce such markups over time.

Regulatory next steps and amendments were discussed. Proponents told the committee they have been negotiating language with the Nevada Bankers Association and FID to ensure the division has resources to oversee new licensees. Brian Wachter said an amendment addressing funding for FID was under development and that proponents were willing to refine statutory language on licensing, consumer protections and deposit safeguards.

No formal committee action was taken on AB 500 during the hearing; committee members and sponsors said they plan further stakeholder work on amendments and regulatory implementation if the bill advances.

Ending

Assembly Bill 500 generated extensive technical testimony and sharp disagreements about how best to regulate payment‑focused firms. Supporters argued the charter would modernize payments and lower costs for Nevada businesses; regulators, bankers and some credit unions sought clarified oversight, funding and explicit consumer protections before supporting a final measure. The committee left the hearing open for additional stakeholder negotiations.