(b) Breach of security of the system means unauthorized acquisition of data that compromises the security, confidentiality, or integrity of the information maintained by the Nationwide Mortgage Licensing System and Registry, its affiliates, or its subsidiaries;

(c) Consumer means an individual who is a resident of Nebraska and who seeks to obtain, obtains, or has obtained a loan that is to be used primarily for personal, family, or household purposes;

(e) Debt cancellation contract means a loan term or contractual arrangement modifying loan terms under which a financial institution or licensee agrees to cancel all or part of a borrower's obligation to repay an extension of credit from the financial institution or licensee upon the occurrence of a specified event. The debt cancellation contract may be separate from or a part of other loan documents. The term debt cancellation contract does not include loan payment deferral arrangements in which the triggering event is the borrower's unilateral election to defer repayment or the financial institution's or licensee's unilateral decision to allow a deferral of repayment;

(f) Debt suspension contract means a loan term or contractual arrangement modifying loan terms under which a financial institution or licensee agrees to suspend all or part of a borrower's obligation to repay an extension of credit from the financial institution or licensee upon the occurrence of a specified event. The debt suspension contract may be separate from or a part of other loan documents. The term debt suspension contract does not include loan payment deferral arrangements in which the triggering event is the borrower's unilateral election to defer repayment or the financial institution's or licensee's unilateral decision to allow a deferral of repayment;

(i) Guaranteed asset protection waiver means a waiver that is offered, sold, or provided in accordance with the Guaranteed Asset Protection Waiver Act;

(j) Licensee means any person who obtains a license under the Nebraska Installment Loan Act;

(k) Loan means 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 section 45-101.03 and a principal balance of less than twenty-five thousand dollars;

(l)(i) Mortgage loan originator means an individual who for compensation or gain (A) takes a residential mortgage loan application or (B) offers or negotiates terms of a residential mortgage loan.

(ii) Mortgage loan originator does not include (A) any individual who is not otherwise described in subdivision (i)(A) of this subdivision and who performs purely administrative or clerical tasks on behalf of a person who is described in subdivision (i) of this subdivision, (B) a person or entity that only performs real estate brokerage activities and is licensed or registered in accordance with applicable state law, unless the person or entity is compensated by a lender, a mortgage broker, or other mortgage loan originator or by any agent of such lender, mortgage broker, or other mortgage loan originator, or (C) a person or entity solely involved in extensions of credit relating to time-share programs as defined in section 76-1702;

(m) Nationwide Mortgage Licensing System and Registry means a licensing system developed and maintained by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators for the licensing and registration of mortgage loan originators, mortgage bankers, installment loan companies, and other state-regulated financial services entities and industries;

(n) Person means individual, partnership, limited liability company, association, financial institution, trust, corporation, and any other legal entity; and

(o) Real property means an owner-occupied single-family, two-family, three-family, or four-family dwelling which is located in this state, which is occupied, used, or intended to be occupied or used for residential purposes, and which is, or is intended to be, permanently affixed to the land.

(2) Except as provided in subsection (3) of section 45-1017 and subsection (4) of section 45-1019, no revenue arising under the Nebraska Installment Loan Act shall inure to any school fund of the State of Nebraska or any of its governmental subdivisions.

(3) Nothing in the Nebraska Installment Loan Act applies to any loan made by a person who is not a licensee if the interest on the loan does not exceed the maximum rate permitted by section 45-101.03.

Annotations

1. Transactions

2. Constitutionality

3. Recovery denied

4. Miscellaneous

1. Transactions

The Installment Loan Act comprehensibly regulates and limits all loans made by a licensee to small borrowers. Gruenemeier v. Commonwealth Co., 178 Neb. 66, 131 N.W.2d 713 (1964).

A loan of money by a nonlicensee, which does not exact interest in excess of nine percent per annum, is not within the inhibitory provisions of the Installment Loan Act. Moffitt-Harrison Builders, Inc. v. Sandman, 177 Neb. 425, 129 N.W.2d 524 (1964).

A loan of money by a nonlicensee which does not exact interest and charges in excess of nine percent per annum is not usurious. Pattavina v. Pignotti, 177 Neb. 217, 128 N.W.2d 817 (1964).

If a purported time sale is in fact a loan and the loan is made in violation of the Installment Loan Act, the penalties of the act apply to it. Lloyd v. Gutgsell, 175 Neb. 775, 124 N.W.2d 198 (1963).

Inhibitory provisions of Installment Loan Act apply alike to licensees and nonlicensees. Robertson v. Burnett, 172 Neb. 385, 109 N.W.2d 716 (1961).

Permissive provisions of Installment Loan Act apply to licensees, but inhibitory provisions apply alike to licensees and nonlicensees. Curtis v. Securities Acceptance Corp., 166 Neb. 815, 91 N.W.2d 19 (1958).

Design of the law was to license and control the business of making installment loans. A-1 Finance Co., Inc. v. Nelson, 165 Neb. 296, 85 N.W.2d 687 (1957).

Notwithstanding limitations on interest rates imposed on state banks by Nebraska law, national bank in Nebraska can charge, with respect to credit card transactions, rates allowed by Nebraska law for "small loan companies". Fisher v. First Nat. Bank of Omaha, 548 F.2d 255 (8th Cir. 1977).

2. Constitutionality

Amendments made to Installment Loan Act in 1963 Special Session by Legislative Bill 11 were unconstitutional as special legislation. State Securities Co. v. Ley, 177 Neb. 251, 128 N.W.2d 766 (1964).

Installment Loan Act sustained as constitutional. State ex rel. Beck v. Associates Discount Corp., 162 Neb. 683, 77 N.W.2d 215 (1956).

3. Recovery denied

An installment sales contract which exacts interest in excess of nine percent per annum and where the seller is a nonlicensee violates the Small Loan Act. Elder v. Doerr, 175 Neb. 483, 122 N.W.2d 528 (1963).

Recovery on note payable in installments was properly denied where excessive interest was charged. Powell v. Edwards, 162 Neb. 11, 75 N.W.2d 122 (1956).

Violation of Installment Loan Act by lender makes loan void and uncollectible. Grand Island Finance Co. v. Eacker, 155 Neb. 546, 52 N.W.2d 805 (1952).

4. Miscellaneous

The Installment Loan Act applies primarily to those licensed under the act but its inhibitory provisions apply also to nonlicensees. Seldin v. Northland Mortgage Co., 189 Neb. 175, 202 N.W.2d 174 (1972).

It is a question of fact as to whether a transaction is a bona fide time sale or an installment loan. Berg v. Midwest Laundry Equipment Corp., 175 Neb. 423, 122 N.W.2d 250 (1963).

None of defendants were licensed to engage in business under Installment Loan Act. Hills v. Burnett, 172 Neb. 370, 109 N.W.2d 739 (1961).

In the absence of a bill of exceptions, dismissal of action to recover under Installment Loan Act was proper. Brierly v. Federated Finance Co., 168 Neb. 725, 97 N.W.2d 253 (1959).

Suit against national bank to have installment note and conditional sale contract adjudged void was controlled as to venue by federal statute. Michigan Nat. Bank v. Robertson, 372 U.S. 591 (1963).

In suit to declare lender's interest charge usurious where borrower paid maximum legal loan rate plus one hundred dollars, court found the latter charge only "incidental" to the extension of credit where borrower received other monetary consideration in addition to a loan. Campbell v. Liberty Financial Planning, Inc., 422 F.Supp. 1386 (D. Neb. 1976).