LB 717 created a new Net Tangible Benefit Disclosure requirement for certain refinance transactions, and we wanted to provide clarification regarding who is required to provide this disclosure.

The new requirement was added to Nebraska’s Residential Mortgage Licensing Act and Nebraska Installment Loan and Sales Act. For residential mortgage refinances, the disclosure requirement applies to entities licensed under the Residential Mortgage Licensing Act, including licensed mortgage bankers. It also applies to certain lenders operating under the Nebraska Installment Loan and Sales Act.

Nebraska banks are not required to provide the Net Tangible Benefit Disclosure. Nebraska law specifically exempts depository institutions, including banks and wholly owned bank subsidiaries, from the Residential Mortgage Licensing Act. Because banks are exempt from the Act, they are not licensed mortgage bankers and are not subject to the disclosure requirement added to Neb. Rev. Stat. § 45-737 by LB 717.

In practical terms, if a residential mortgage refinance is being originated by a Nebraska state-chartered bank, national bank, or other exempt depository institution under its banking authority, the Net Tangible Benefit Disclosure is not required. If the refinance is being originated by a licensed mortgage banker or another entity subject to the licensing statutes amended by LB 717, the disclosure requirement applies.

Banks that conduct mortgage lending through a separately licensed mortgage banker entity should review the requirements applicable to that licensed entity, as the exemption available to the bank may not extend to a separately licensed company.

You can access LB 717, which includes the provisions listed above, here.

You can access Neb. Rev. Stat. § 45-737 here and the exemption statute, Neb. Rev. Stat. § 45-703, here.

Hopefully this clears up any confusion. CCI suggests sharing this update with your management team. If you have any questions regarding this information, you can contact us via inquiries@completecompli.com.

Sarah Smith, CRCM, CAFP