Nebraska Enacts Changes to Installment Loan Laws
On May 20, 2025, Nebraska Governor Jim Pillen signed Legislative Bill 474 (LB 474) into law, enacting the Nebraska Installment Loan and Sales Act, which merges the state’s Installment Loan Act and Installment Sales Act into a single updated framework. LB 474 streamlines regulations for certain small loans and installment sale contracts, expands upon consumer protections, and clarifies licensing and compliance requirements under the oversight of the Department of Banking and Finance to address modern lending practices. LB 474 also includes amendments to the Nebraska Money Transmitters Act to modernize its provisions.
Key changes in LB 474 include:
- Consolidated Framework: Amends and transfers provisions of the Nebraska Installment Loan Act into the Nebraska Installment Sales Act, renames the act the Nebraska Installment Loan and Sales Act, and repeals the Nebraska Installment Loan Act;
- Expanded Licensing: Requires licenses for applicable lenders, sales finance companies, sellers, and persons purchasing interests in certain small loans or installment sales contracts, broadening the prior scope;
- Consumer Protections: Revises interest rate caps, permissible fees, loan and insurance requirements, and maintains prohibitions on wage assignments and excessive charges;
- Broadens Oversight: Expands Department of Banking and Finance enforcement by replacing limited oversight provisions; and
- Money Transmitter Act Amendments: Updates definitions and exemptions in line with the new changes and removes ambiguous terms.
These changes become effective October 1, 2025.
