Nebraska Amends Various Finance Laws

Nebraska enacted LB 717 on February 25, 2026, amending multiple aspects of Nebraska consumer finance law. Among other changes, the bill expands the scope of loans covered under the Nebraska Installment Loan and Sales Act (“NILSA”) and establishes net tangible benefit disclosure requirements for Installment Loan Companies and Mortgage Bankers.

Changes are scheduled to become operative three calendar months after the adjournment of the legislative session. The projected adjournment date is April 17, 2026, which would make the estimated compliance date around July 18, 2026.

Scope of the Installment Loan Law

The installment loan law has been amended to increase the scope of the law to now regulate loans of up to $100,000, up from the $25,000 limitation previously incorporated into the law.    

The law generally continues to be required for any non-exempt person: (a) engaging in the business of making loans; (b) that holds or acquires any rights of ownership, servicing, or other forms of participation in a loan or that engages with, or conducts loan activity with, an installment loan borrower in connection with a loan; or (c) that is not a financial institution who, at or after the time a loan is made by a financial institution, markets, owns in whole or in part, holds, acquires, services, or otherwise participates in a loan.

However, loans subject to the act were previously defined as a loan or any extension of credit to a consumer originated or made with an interest rate greater than the maximum interest rate allowed under Nebraska’s Interest Law, with a minimum loan term of six months, and a principal balance of less than $25,000.

The maximum rate of interest under the Interest Law was and remains 16% per annum. Previously, loans of $25,000 or more were exempted from the usury limit and thus there was no need for the license to assess a higher rate of interest for loans above $25,000. The amendment in LB 717:

1. Removed the $25,000 cap on the loan amount under the NILSA, and 
2. Increased the exempted transaction amount under the Interest law from loans above $25,000 to loans above $100,000.

As a result, upon the operative date of the amendment, the NILSA will cover loans of up to $100,000 with rates greater than 16%.

Current Nebraska Installment Loan Company Licensees will need to adjust their processes and reporting to reflect any newly captured loans in the scope of the NILSA. Companies who do not currently hold a Nebraska Installment Loan License based upon the current $25,000 threshold should assess whether the amendments affect their Nebraska licensing posture and may require a license moving forward.

Net Tangible Benefits

Amendments enacted by LB 717 also established net tangible benefits disclosure requirements for refinancing loans by either a licensed Mortgage Banker or an Installment Loan Licensee. While such requirements are common for mortgage loan licensees, we are not aware of similar requirements for non-mortgage consumer loans.

Installment Loans

As of the effective date, every Installment Loan Company licensee must disclose to the borrower, in connection with any refinance of an existing installment loan, whether or not the borrower will receive a net tangible benefit through such refinance. Such disclosure must be on a worksheet prescribed by the Nebraska Department of Banking and Finance or on a form prescribed by the Department substantially similar to such worksheet.

“Net tangible benefit” means a benefit of a refinance that will be in the financial interests of the borrower. Net tangible benefit includes, but is not limited to:

(i) Obtaining a lower interest rate;
(ii) Obtaining a lower monthly payment, including principal, interest, taxes, and insurance;
(iii) Obtaining a shorter amortization schedule;
(iv) Changing from an adjustable interest rate to a fixed interest rate;
(v) Eliminating a negative amortization feature;
(vi) Eliminating a balloon payment feature;
(vii) Receiving cash out from the new loan in an amount greater than all closing costs incurred in connection with such loan;
(viii) Avoiding foreclosure;
(ix) Eliminating private insurance; and
(x) Consolidating other existing loans into a new loan.

Mortgage Loans

Under the new requirements, as of the operative date of the amendment, a Mortgage Banker licensee must disclose to the borrower, in connection with any refinance of an existing residential mortgage loan, whether or not the borrower will receive a net tangible benefit through such refinance. The definition of “net tangible benefit” is substantially similar as to the definition under the NILSA.

Other Amendments

Nebraska Bill 717 also amended a number of different provisions throughout the state’s banking and finance laws beyond the scope of this alert. For instance, the bill authorizes financial institutions (i.e. depositories) to institute an emergency closure in the event of cybersecurity breach; clarifies that certain small-scale “payroll processing services” are exempt from regulation under the Nebraska Money Transmitters Act; and amends various provisions related to digital assets (e.g. cryptocurrency). If you have any questions regarding these provisions, please reach out to our team.