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Nebraska committee reviews Department of Banking omnibus bill to harmonize lending and licensing rules
Summary
LB 251, introduced at the request of the Nebraska Department of Banking and Finance, would update multiple banking statutes — including clarifying the bank lending limit (requiring livestock/warehouse receipts to equal at least 115% of excess loans), revising branch application publication, and adjusting mortgage surety bond calculations — to align state law with federal standards and modernize regulatory references to Jan. 1, 2025.
Senator Mike Jacobson told the Banking, Commerce and Insurance Committee that LB 251 was brought by the Nebraska Department of Banking and Finance to update and clarify statutes under the department’s jurisdiction.
"LB 251 is a bill that was brought to me by the Nebraska Department of Banking and Finance," Jacobson said, summarizing the bill’s scope and the department’s request that the committee consider a package of statutory updates.
The bill makes several targeted changes across state banking law. Key provisions described by the department’s director would: clarify the bank lending limit statute (section 8‑141) by aligning an exception for loans secured by livestock or warehouse receipts with the national bank lending limit — requiring those receipts to equal at least 115% of the portion of a loan that exceeds a bank’s general lending limit; permit entities with pending charter applications to use restricted charter terms during the application process (with removal requirements if the application is denied or withdrawn); provide a process for emergency acquisitions by Nebraska institutions of failing out‑of‑state financial institutions; shift the responsibility for publishing branch‑application notices from the department to the applicant institution; exempt credit unions and bank subsidiaries from coverage under the loan broker act; and add serviced loans into supplemental mortgage banker surety bond calculations.
"The bill is 64 pages long," Kelly Lammers, director of the Nebraska Department of Banking and Finance, said in testimony, and she told the committee the measure harmonizes state law with federal standards in several areas and updates cross‑reference dates to January 1, 2025.
Lammers said the contemplated amendment to the bank lending statute would allow a bank to loan up to 10% over its general limit when the excess is secured by livestock or warehouse receipts that equal at least 115% of the excess. She also explained that mortgage banker licensees would continue to carry a $100,000 base bond, while the supplemental bond scale would be adjusted to include serviced loans so that large servicers carry commensurate bond coverage.
Industry groups representing banks, community bankers and credit unions spoke in support. Ryan McIntosh, representing the Nebraska Bankers Association, and Dexter Schroedt, president and CEO of the Nebraska Independent Community Bankers, both thanked the department for outreach and asked the committee to advance the bill. Brandon Lukenhaus of the Nebraska Credit Union League noted that state‑chartered credit unions would have the option to adopt the changes and that the measure helps align state charters with federal counterparts.
No opponents appeared at the hearing and the committee did not take a final vote on LB 251 during this session. Committee members asked clarifying questions about the bill’s origins and scope; Jacobson said the department undertook a broad review of outdated provisions and that the bill is intended to clean up and modernize multiple statutes.
The committee concluded the public testimony and moved on to the next bill on the agenda; LB 251 will return for further consideration according to the committee’s schedule.
