Nebraska Payday Loan Law and Legislation

Nebraska Payday Loan Regulations
Legal Status
Legal
Interest Rate (APR)
460%*
Minimum Loan Amount
Not Specified
Maximum Loan Amount
$500
Minimum Loan Term
Not Specifie
Maximum Loan Term
34 days
Finance Charges
Not more than $15 per $100

Payday lending is legal in Nebraska.

Nebraska has a $500 limit on payday loans offered in the state. The maximum loan term is 34 days. The finance charges should no exceed $15 per $100. Real APR is 460%*. Rollovers are not allowed. Criminal actions against borrowers are prohibited.

Payday lending story in Nebraska dates back to 1994. However, the Delayed Deposit Services Licensing Act that was passed at that time didn’t stay the same. It had lived through several changes, with the most recent amendment being LB 194 (2018). Though the major terms of the loan weren’t altered, several regulatory limits and requirements were added. It is also highly likely that those were not the last ones.

Nebraska Payday Lending Statutes

All the laws concerning payday lending are contained in the Nebraska Stat. Ann. § 45-901, or the Delayed Deposit Services Licensing Act. Payday loans are officially called “delayed deposit services”.

It is required that lenders wishing to operate in the state must be physically located there. All the lenders operating online are considered illegal.

It is also required by the Nebraska law that lenders should have a license in order to provide their services. Moreover, to start a lending business, a $50,000 bond is needed and $25,000 more for each location that a lender is supposed to open. Nebraska license for payday lenders costs $500 and every additional branch – $125. All the lenders must renew their licenses every year.

A written agreement is required for every single payday lending transaction with all the information about the terms and fees. In Nebraska, however, lenders are not obliged to provide a Truth in Lending Act disclosure.

Loan Amount in Nebraska

  • The maximum amount of a payday loan is Nebraska is $500 from one lender.

Rates, fees and other charges in Nebraska

“(1) No licensee shall charge as a fee a total amount in excess of fifteen dollars per one hundred dollars or pro rata for any part thereof on the face amount of a check for services provided by the licensee.” (45-918)

Real APR for payday loans in Nebraska can reach 460% (*According to the Center for Responsible Lending 2019: “Typical APR based on average rate for a $300 loan advertised by largest payday chains or as determined by state regulator, where applicable.”).

Maximum term for a payday in Nebraska

  • According to the Nebraska legislation, payday loans in the state are allowed for a period of no more than 30 days.
  • Loans cannot be renewed or somehow refinanced or consolidated. When the time is due, a loan should be repaid in full.
  •  “1) A maker shall have the right to rescind a delayed deposit transaction before 5 p.m. the next business day following the delayed deposit transaction. (45-918.03)

Consumer Information

  • A lender is allowed to charge one NSF fee in the amount of $15 in case there is not enough money in the borrower’s account to repay.
  • Any criminal actions against default payments are prohibited.

More information about payday loans in Nebraska can be found on the official website of the Nebraska Department of Banking & Finance.

The History of Payday Loans in Nebraska

  • 1994 – First time when payday loans were introduced in the state.
  • 2000LB 932 allowed lenders to hold checks longer than 31 days in case they were “not negotiable” (couldn’t be cashed).
  • 2006LB 876 was passed. It extended the loan terms to 34 days. It also prohibited roll-overs.
  • 2006 – The Military Lending Act effectively capped payday loans offered to the military at 36% APR. This federal law has no exceptions, thus, no lender in Nebraska is now allowed to offer loans to the military in excess of 36% APR.
  • June 2, 2016 – The Consumer Financial Protection Bureau (CFPB) proposed a Payday Loan Rule that hasn’t yet fully come into effect (expected in November 2020).
  • 2016 – There was an attempt (LB 1036) to set a limit to the payday loan APR to 36%; however, this effort came to nothing.
  • April 19, 2018LB 194 passed unanimously by the state Legislature and was approved by the Governor. It didn’t restrict either the loan amount or rates, however, it closed a loophole that payday lenders used to get around regulatory limits, imposed reporting requirements on payday lenders, and also imposed a requirement to provide a short payment plan for borrowers.
  • Taking into account that the Nebraska Department of Banking and Commerce had to deal with more than 300 enforcement actions against payday lenders for various violations since 2006, it is likely that LB 194 will be followed by other restrictive laws in the nearest future.

(As of May 2019)

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