The second session of Nebraska’s 108th Legislature adjourned on April 18, drawing the 60-day session to a close. During this short session, Gov. Jim Pillen signed into law four bills that passed through the Committee on Banking, Commerce and Insurance, which will impact Nebraska banks and financial institutions. The following is a brief explanation of the legislative bills introduced and the impacts they will have on Nebraska’s statutory framework. LB94 Legislative Bill 94 (LB94) was introduced on Jan. 23, 2023, by Sen. Julie Slama to amend several sections of the Uniform Commercial Code (UCC). The bill was prepared by representatives of the Uniform Law Commission and Nebraska banks and comes on the heels of Nebraska’s passage of legislation allowing for the deposit of cryptocurrency or other digital assets into financial institutions. LB94 was carried over to the second session and signed into law by Gov. Jim Pillen on Feb. 14, 2024. The UCC governs commercial transactions in Nebraska and other adopting states and requires periodic updates to stay current with new forms of personal property and evolving markets. LB94 seeks to adopt a new Article 12 of the UCC to replace the current language and implement accompanying amendments to UCC Article 9, which would create a new category of asset, “controllable electronic records.” Controllable electronic record (CER) will be defined in the updated language of Nebraska Uniform Commercial Code § 12102(a) as “a record stored in an electronic medium that can be subjected to control.” The Committee on Banking, Commerce and Insurance noted in their LB94 Committee Statement that the definition will cover many forms of property created through the use of blockchain technology that exist today or that may exist in the future. Examples of such property would include virtual currency like Bitcoin, non-fungible tokens (NFTs) and digital assets with embedded payment rights.1 Updated language to Nebraska Uniform Commercial Code § 12-105 will now govern control of a CER. The Committee on Banking, Commerce and Insurance has summarized the definition of control found in § 12-105 to include: (1) the nonexclusive power to enjoy substantially all the benefits of the CER; (2) the exclusive power to prevent others from enjoying substantially all the benefits of the CER; (3) the exclusive power to transfer control or to cause another person to get control of the CER; and (4) the ability of the person in control to identify itself to a third-party as the person having control (can be accomplished through the use of the cryptographic key or account number).2 The updated language will also direct how a security interest attaches to CERs and how to perfect security interests. LB94 looks to replace the current language in UCC Article 12, put in place on July 1, 2022. Importantly, LB94 contains a “Special Transitional Rule” that applies the current UCC Article 12 language to any transaction involving a CER that arose on or after July 21, 2022, and before the operative date of LB94. This rule also states that transactions involving a CER arising before July 1, 2022, will be carried out under the laws existing before July 1, 2022, and the transaction may be terminated, completed, consummated or enforced under that pre-existing statute, treating the current version of UCC Article 12 as if it had not existed. LB279 Legislative Bill 279 (LB279) was introduced on Jan. 31, 2023, by Sen. Kathleen Kauth, seeking to change and eliminate provisions relating to reporting requirements of executive officers of banks at a state level, explicitly amending Neb. Rev. Stat. § 8-143.01. LB279 was carried over to the second session and signed into law by Gov. Jim Pillen on Feb. 14, 2024. LB279 amends Neb. Rev. Stat. § 8-143.01 to eliminate provisions relating to the report of loans, indebtedness and credit of executive officers of banks and to adopt federal updates MORE FACE TIME. LESS WAIT TIME. Visit NebraskaBlue.com/Telehealth to learn more. Health benefits that give you access to virtual visits with doctors and specialists, even if you’re out of state. So you can get the care you need — wherever you are, whenever you need it. An independent licensee of the Blue Cross and Blue Shield Association. 19 NEBRASKA BANKER
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