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Supporters tell Commerce and Labor bill would modernize Nevada lending rules, legal-aid urges application of Nevada law
Summary
SB 437 would allow internet consumer lenders to operate in Nevada without a brick-and-mortar office while remaining subject to Nevada licensing and oversight. Industry backers said it expands access to credit; Legal Aid urged retaining Nevada law as governing law for loans.
Carson City — Proponents of Senate Bill 437 told the Senate Commerce and Labor Committee that modernizing Nevada's installment-loan statutes to permit internet consumer lenders to apply for licensure without a physical office would expand access to credit while leaving state regulatory oversight in place.
Ben Kiekeffer of BRK Nevada, representing technology-based lenders, said the bill creates a definition for “internet consumer lender” and extends to those lenders an exemption from the state's current brick-and-mortar licensing requirement. He told the committee the change would not remove licensing or supervisory authority from the Nevada Division of Financial Institutions.
Gilberto Soria Mendoza, manager of government relations at Upstart, described Upstart's platform and underwriting approach and said the company helps community banks and credit unions find and serve customers. “By partnering with Upstart, lenders can approve more borrowers at lower rates while delivering the exceptional digital-first experience customers demand,” Mendoza said.
Mendoza and Kiekeffer said the bill would let online lending marketplaces and fintech partners apply for a Nevada license and operate subject to the Division of Financial Institutions' oversight. Kiekeffer noted FID had suggested including solicitation in the bill's definition and the sponsors said they would accommodate that input.
Peter Aldis, a staff attorney at Legal Aid Center of Southern Nevada, testified in support but emphasized that Nevada law should govern loans made to Nevada residents: “Nevada has several strong consumer protection laws and it's crucial that all lenders are required to follow those rules,” he said, supporting a bill provision that any loan issued by an internet consumer lender be governed by Nevada law to the extent federal law does not preempt state law.
Several committee members questioned company witnesses about the types of loans offered and consumer protections. Mendoza said Upstart's average loan is about $10,000 and that the company generally does not make short-term payday-style loans; he also said Upstart does not make loans above 36 percent APR as a company practice.
Committee members asked staff and sponsors to ensure that the bill's definitions and licensing language are aligned with existing chapters on installment loans. No opponents were recorded on the broadcast lines; several stakeholders including the Chamber of Progress and Legal Aid offered support during the hearing.
The hearing closed with the committee taking no immediate vote; sponsors said they would work with the Division of Financial Institutions on technical drafting.
