Nebraska Department of Banking and Finance

Securities Rules Amendments Adopted

Publication Date: October 08, 2024

Securities Rules Amendments Adopted

Lincoln, Neb., October 8, 2024 – The Nebraska Department of Banking and Finance is pleased to announce that amendments to the Securities Rules, Title 48, Chapters 6, 7, 9, and 12 of the Nebraska Administrative Code became effective September 18, 2024, following notice, hearing, approval by Governor Pillen, and filing with the Nebraska Secretary of State. The Title 48 Rules are available at https://rules.nebraska.gov/rules?agencyId=9&titleId=28. The amended chapters include the following provisions:

48 NAC 6-Agents of Broker-Dealers: The revisions to Title 48, Chapter 6 adopt the North American Securities Administrators Association (“NASAA”) “Examination Requirements for Broker-Dealer Agents Model Rule.” This rule allows agents who have elected to participate in the Financial Industry Regulatory Authority’s (“FINRA”) Maintaining Qualifications Program to extend the validity of their state examinations from two to five years.

48 NAC 7-Investment Advisers: The revisions to Title 48, Chapter 7 adopt NASAA’s “Model Rule for Investment Adviser Written Policies and Procedures Under the Uniform Securities Act of 1956 and 2002.” This rule requires investment advisers to adopt policies and procedures to ensure compliance with the Securities Act of Nebraska. The model rule replaces prior provisions in Chapter 7 that required investment advisers to adopt similar policies and procedures.

48 NAC 9-Investment Adviser Representatives: The revisions to Title 48, Chapter 7 adopt two NASAA model rules. The first model rule, the NASAA “Investment Adviser Representative Examination Validity Program Model Rule” allows investment adviser representatives who participate in NASAA’s Exam Validity Extension Program and complete continuing education to extend the validity of their state examinations from two to five years. The second model rule, NASAA’s “Model Rule on Investment Adviser Representative Continuing Education” implements continuing education requirements for investment adviser representatives.

48 NAC 12-Fraudulent, Dishonest and Unethical Business Practices: The revisions to Title 48, Chapter 12 adopt NASAA’s “Unpaid Arbitration Awards Under the Uniform Securities Acts of 1956 and 2022 Model Rule.” This rule provides that the failure to pay arbitration awards, court judgments, and regulator fines is an unethical business practice.

The Department will be providing additional information to the affected industries concerning the exam validity extension program and investment adviser continuing education in the near future.

Website Rule Announcements 100824.pdf

Importance of Completing Continuing Education Properly and Compliance with the SAFE Act

Publication Date: September 26, 2024

As part of our ongoing commitment to maintaining high standards within the mortgage industry, we want to remind all Mortgage Loan Originators (MLOs) of the critical importance of adhering to the continuing education (CE) requirements as set forth by the federal Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act).

Under the SAFE Act, MLOs are required to complete a minimum number of continuing education hours each year to maintain their licensing. This education is designed to ensure that MLOs stay current with industry practices, regulations, and ethical standards. It is imperative that these educational requirements are met in accordance with the SAFE Act to uphold the integrity of our profession.

Improperly completing CE, including but not limited to engaging in inappropriate practices or allowing others to complete your CE on your behalf, constitutes a violation of the SAFE Act. Such violations can result in action taken by your regulator against your license, including the lapse or suspension of your license. These actions undermine the trust placed in our industry by consumers and regulators alike and can have long-lasting repercussions on your professional standing.

The Conference of State Bank Supervisors (CSBS) has implemented advanced technologies to ensure CE requirements are fulfilled by the appropriate individuals. These systems are designed to verify the identity of MLOs and confirm that they are personally completing their required education. Non-compliant activities are identified and addressed with enforcement measures.

The recent multi-state enforcement action, involving multiple MLOs and Real Estate Educational Services (REES) serves as a reminder of the seriousness with which CE compliance is treated. In this case, fraudulent activities related to CE were met with legal and regulatory consequences. The severity of the penalties imposed underscores the collective commitment to ensuring that all MLOs adhere to the prescribed educational standards and conduct themselves with the highest level of professionalism.

As MLOs, you are responsible for completing your CE requirements personally and in accordance with all relevant regulations. We urge you to take all necessary steps to ensure your CE activities are conducted ethically and in full compliance with the SAFE Act.

If you have any questions or require assistance with your continuing education, please contact your state regulatory agency or the appropriate licensing authority.

Thank you for your attention to this important matter and for your ongoing dedication to maintaining the highest standards of professionalism in the mortgage industry.

Completing Continuing Education Properly and Compliance with the SAFE Act.pdf

NOTICE OF APPLICATION FOR A DIGITAL ASSET DEPOSITORY CHARTER

Publication Date: September 23, 2024

NOTICE OF APPLICATION FOR A DIGITAL ASSET DEPOSITORY CHARTER

Notice is hereby given that Telcoin, Inc., 2200 Taylor Avenue, Suite 200, Norfolk, Nebraska, in accordance with the provisions of Neb. Rev. Stat. § 8-3015 of the Nebraska Financial Innovation Act, filed an application with the Nebraska Department of Banking and Finance for a charter of authority to conduct a digital asset depository business as defined in the Nebraska Financial Innovation Act.

A hearing on the charter application has been scheduled for December 5, 2024, commencing at 9:00 a.m. CST, at the First Nebraska Administrative Building, 1526 K Street, Lower LevelDevelopment Center, Lincoln, Nebraska. 68508.

Formal objections to the charter application must be submitted to the Department of Banking and Finance no later than the thirtieth day prior to the scheduled hearing date. A copy of the Department’s Rules of Procedures is available upon request from the Department, or may be found on the Department’s website, www.ndbf.ne.gov.

Written comments regarding the charter application may also be submitted to the Nebraska Department of Banking and Finance, 1526 K Street, Suite 300, PO Box 95006, Lincoln, Nebraska, 68508. Such comments must be received by the Department prior to the start of the hearing in order to be considered.

If auxiliary aids or reasonable accommodations are needed for attendance at this hearing, please call the Nebraska Department of Banking and Finance at (402) 471-2171, or for persons with hearing impairments, please call the Nebraska Relay System at (800) 833-7352 TDD. This contact should be made at least seven (7) days prior to the hearing.

Telcoin Publication

Statements of Policy for Digital Asset Depositories

Publication Date: August 01, 2024

Contact: Melissa Berglund, Public Information Officer Phone: 402-471-2171 Email: Melissa.Berglund@nebraska.gov

Nebraska Financial Innovation Act and Statements of Policy Update

Nebraska Financial Innovation Act and Statements of Policy Update Thursday, August 1, 2024 (LINCOLN, NE) – The Nebraska Department of Banking and Finance (“Department”), as the state agency responsible for enforcing and administering the Nebraska Financial Innovation Act (“NFIA” or “Act), has now published Statements of Policy, specific to the operation and supervision of Charters under the Act. In considering and crafting these pieces of guidance, the Department relied heavily on existing frameworks of law, rule, guidance, and regulation from within Nebraska, and from the state banking system and our federal counterparts. These important building blocks provided the fundamentals for ensuring that our regulation and supervision of these new and innovative Charters puts them in the best possible position to be able to operate safely and soundly within our financial industries here in Nebraska.

The Statements of Policy, along with the Act and our existing rules, regulations, and other forms, can all be found on the Department’s website at: https://ndbf.nebraska.gov/industries/digital-assets.

The Statements of Policy that are now effective are:

• Statement of Policy 1 – Books and Records

• Statement of Policy 2 – Safety and Soundness

• Statement of Policy 3 – Capital Requirements

• Statement of Policy 4 – Prompt Corrective Action

• Statement of Policy 5 – Liquidity Programs

• Statement of Policy 6 – Technology Protocols, Information Security, and Distributed Ledger Activity

• Statement of Policy 7 – Formal and Informal Actions

The Department will be continuously providing information and materials surrounding the NFIA to better inform industry, the public, and any interested parties. Please bookmark our website and follow the Department’s social media pages on LinkedIn, Facebook, and YouTube to stay up-to-date and current on our activities and publications in this space.

To inquire about the NFIA, our team, our or chartering process, please send an email to the team at dob.digitalassets@nebraska.gov.

Industry advisory regarding the publication of Statements of Policy for Digital Asset Depositories

Updates to Nebraska Consumer Financial Services Laws - LB 1074

Publication Date: June 20, 2024

Updates to Nebraska Consumer Financial Services Laws - LB 1074.pdf

June 17, 2024

RE: Updates to Nebraska Consumer Financial Services Laws

All Delayed Deposit Services, Installment Loan, Installment Sales, Money Transmitter, and Mortgage Banker Licensees and Applicants:

As the Nebraska Department of Banking and Finance (“Department”) is the state agency responsible for the regulation and supervision of the Nebraska Delayed Deposit Services License, the Nebraska Installment Loan License, the Nebraska Installment Sales License, the Nebraska Money Transmitter License, and the Nebraska Mortgage Banker License (collectively, the “Consumer Financial Services” or “CFS Licenses”), the Department is issuing this update to provide notice of upcoming changes to the statutes governing the CFS Licenses.

Effective July 19, 2024, the CFS Licenses will be subject to two key changes: an update to background check procedures and a notification requirement for data breaches.

The first of these updates, the change in background check procedures, provides that the Department will solely utilize NMLS-based background checks for all CFS Licenses. Prior to this update, only the Nebraska Mortgage Banker License and Nebraska Delayed Deposit Services License utilized the NMLSbased background check procedures. This update will provide uniformity of the process throughout all of the CFS Licenses. For control persons for Money Transmitter licensees or applicants who have lived or worked outside of the United States in the last three years, the Department will still require an independent background check.

The second of these updates implements a requirement that all companies with a CFS License must notify the Department within three business days from the date that they become aware that they have suffered a data breach involving the personal information of a Nebraska resident. Such notice is required to be made to the Department in writing, or through the NMLS. There is an exception to the three-day notice requirement, where a law enforcement agency determines that such notice could impede a criminal investigation.

These changes were contained within LB 1074 (2024). The text of LB 1074 is available on the Nebraska Legislature’s website at: https://nebraskalegislature.gov/FloorDocs/108/PDF/Slip/LB1074.pdf. If you have any questions, please contact the Department by phone at 402-471-2171 or by email to: William.Lawrence@nebraska.gov.

Nebraska Financial Innovation Act and Title 47 Rules Update

Publication Date: June 07, 2024

Contact: Christopher German, Money Transmitters & Digital Assets Counsel; Melissa Berglund, Public Information Officer Phone: 402-471-2171 Email: Christopher.German@nebraska.gov; Melissa.Berglund@nebraska.gov

Nebraska Financial Innovation Act and Title 47 Rules Update

Thursday, June 6, 2024 (LINCOLN, NE) – The Nebraska Department of Banking and Finance (“Department”) is responsible for enforcing and administering the Nebraska Financial Innovation Act (“NFIA” or “Act). The Act authorizes new charters for digital asset banks and puts the state of Nebraska on the forefront of financial innovation and regulation of the blockchain/digital asset industry. While many companies provide digital asset services using a money transmitter license, the NFIA charter provides a different track for companies seeking to provide digital asset custody services, issue stablecoins, and use independent node verification networks while leveraging standards for safety and soundness based on state law and federal guidance.

The Department is pleased to announce that Title 47 of the Nebraska Administrative Code governing this emerging industry became effective May 29, 2024, following notice, hearing, approval by Governor Pillen and filing with the Nebraska Secretary of State. The Title 47 Rules are available at https://rules.nebraska.gov/rules?agencyId=9&titleId=250 and include these provisions:

1. 47 NAC 1 – Adopts requirements for applicants of digital asset depository charters. Upon determination an application is substantially complete, the Director shall provide notice and schedule a public hearing in accordance with the Nebraska Financial Innovation Act and Administrative Procedure Act. Requires prior approval before a digital asset depository may conduct business in foreign markets or expand activities beyond what is disclosed in initial application. Provides guidance on filing fees, computation of time, and additional review of applications. 2. 47 NAC

2 – Sets surety bond and insurance requirements of digital asset depositories in case of potential liquidation, conservatorship, or receivership and to protect applicants by ensuring sufficient coverage to protect safety and soundness of business operations against insurable risk.

3. 47 NAC 3 – Harmonizes capital requirements for digital asset depository departments and digital asset depository institutions. Identifies examples Department of Banking and Finance Industry Advisory of operating expenses to meet the three-year operating expense requirements provided for in the Nebraska Financial Innovation Act.

4. 47 NAC 4 – Allows state banks to amend existing financial institution charter with application to the Department of Banking and Finance to operate a digital asset depository department. Mandates separation of operations between digital asset depository department and other bank operations. A bank’s capital structure will be evaluated using a risk-based analysis of the proposed digital asset depository department. Separation of FDIC-insured activities and non-insured digital asset activities and products to prevent customer confusion.

5. 47 NAC 5 – Provides standards and penalties for required reporting to the Department of Banking and Finance. Provides for digital signatures under Nebraska law. Defines a call report. Requires digital asset depositories to comply with federal reporting and notice requirements. Provides for computation of time to fulfill report timing requirements.

6. 47 NAC 6 – Sets requirements for digital asset depositories to have a documented system for addressing customer complaints. Provides for administrative proceedings in the case of failure to acknowledge and respond to complaints.

7. 47 NAC 7 – Provides that digital asset depositories must provide notice that digital asset products are not FDIC-insured and that it can provide notice that traditional banking products are FDIC-insured.

8. 47 NAC 8 – Establishes that digital asset depositories must have a written response program with detailed methods for handling data breaches or other cybersecurity events. Requires immediate notification to the Department of Banking and Finance of such incident at the time of awareness of occurrence and reviews of the Financial Data Protection and Consumer Notification of Data Security Breach Act of 2006 to determine further necessary notifications. Requires reporting to the Department of Banking and Finance where incident occurrence is reported federally. The Department is further implementing the NFIA and will post periodic updates of rules, regulations, and other guidance documents for the digital assets banking industry. All rules will have a formal rulemaking process with opportunity for public comment. The materials presented are to provide industry and interested parties with greater accessibility to the ongoing process. To inquire about the chartering process, please send an email to the team at dob.digitalassets@nebraska.gov.

Nebraska Financial Innovation Act and Title 47 Rules Update

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NDBF Orders Internet “Investment” Company to Stop Soliciting Investors

Publication Date: May 17, 2024

FOR IMMEDIATE RELEASE Contact: Melissa Berglund, Public Information Officer Phone: 402-471-2171 Email: melissa.berglund@nebraska.gov

NDBF Orders Internet “Investment” Company to Stop Soliciting Investors May 17, 2024 (LINCOLN, NE) – The Nebraska Department of Banking and Finance (“NDBF”) has issued a Cease-and-Desist Order (“Order”) against an entity and associated individual that claimed to offer investments via the Internet.

On April 19, 2024, NDBF issued the Order to Trustfuturesnum.com and Jack Lineker (“Lineker”). The Order became final on May 14, 2024. The Order prohibits the website and Lineker from offering or selling securities in Nebraska until the securities have been registered with NDBF. The Order also prohibits the Trustfuturesnum.com and Lineker from offering or selling securities in Nebraska until they are registered as broker-dealers or agents of a broker-dealer with NDBF.

A Nebraska investor met Lineker in an online dating website. Lineker claimed to be a resident of Omaha, Nebraska, and claimed to be a certified financial planner who owned his own firm. Lineker encouraged the investor to invest with him because he would be able to make money for her in Bitcoin options. Lineker claimed to utilize artificial intelligence to predict short-term movements in the price of Bitcoin which made trading in short-term Bitcoin options very profitable. Lineker assisted the investor with purchasing $4,300.00 in Bitcoin and transferring it to a wallet purportedly controlled by Trustfuturesnum.com. Shortly thereafter, the investor decided to not pursue a romantic relationship with Lineker. The investor’s subsequent attempts to contact Lineker and the website have been unsuccessful.

A copy of the Order is available on NDBF’s website, ndbf.nebraska.gov.

NDBF strongly cautions investors on conducting business over the Internet with financial companies with whom they are unfamiliar. In many cases, the investor is told to wire money or send a prepaid card, often to a location outside the United States. In other cases, the investors are instructed to send Bitcoin to fund their investment. Investors never receive the promised return and cannot recover their money. Furthermore, these investors may be asked to provide personal information, such as social security numbers and bank account numbers to the Internet company, which makes them prime targets for identity theft. Department of Banking and Finance Media Advisory More information about the laws governing the financial industries in Nebraska can be found on NDBF’s website. If you have questions about any investment matters, call NDBF at (402) 471- 2171.

NDBF Orders Internet “Investment” Company to Stop Soliciting Investors

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NDBF Celebrates Financial Awareness Month with Nebraska Colleges

Publication Date: April 08, 2024

FINAL Film Screening Press Release

FOR IMMEDIATE RELEASE CONTACT Melissa Berglund, Public Information Officer Phone 402-471-2171 Email Melissa.Berglund@nebraska.gov

NDBF Celebrates Financial Awareness Month with Nebraska Colleges Tuesday, April 9, 2024 — In honor of Nebraska’s Financial Awareness Month, the Nebraska Department of Banking and Finance (NDBF) announced today that it is participating in a series of film screenings to talk with college students at four Nebraska campuses about the risks and rewards of investing in the age of social media. NDBF will be working with working with the Financial Industry Regulatory Authority (FINRA) on its New Investor Initiative. FINRA has partnered with Optimist, a non-profit documentary film production company, and will screen Optimist’s award-winning documentary, “This is Not Financial Advice” on college campuses, starting in Nebraska. The film will be followed by a panel discussion with the film’s director, representatives from NDBF and FINRA, the Nebraska Council on Economic Education (NCEE), and other participants. The documentary exposes the startling risks and rewards of today’s market through expert commentary and the anxiety-inducing stories of real people trying to make millions. “Investors today are making investment decisions under the pressure of social media, finfluencers, cryptocurrency, and FOMO – fear of missing out – all while trading is available at the tip of your fingers on your smartphone,” said NDBF Deputy Director Claire McHenry. “The documentary, ‘This is Not Financial Advice’ and panel discussion will provide an engaging way to explore these themes and how college students can protect themselves as investors.” Screenings will be at the University of Nebraska at Kearney on April 17, Southeast Community College – Lincoln on April 18, University of Nebraska – Lincoln on April 18, and the University of Nebraska at Omaha on April 19. Department of Banking and Finance Media Advisory NDBF encourages everyone to ask questions and do your homework before making any financial decision. Additional information about licensing and registration in the securities industry, investor alerts and advisories, and how to make a complaint can be found at ndbf.nebraska.gov.

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NDBF Financial Awareness Month 2024 Press Release

Publication Date: April 05, 2024

NDBF Financial Awareness Month 2024 Press Release

FOR IMMEDIATE RELEASE

CONTACT Melissa Berglund, Public Information Officer

Phone 402-471-2171

Email melissa.berglund@nebraska.gov

Governor Pillen Proclaims April as Financial Awareness Month

April 05, 2024 (LINCOLN, NE) – On April 4^th, Gov. Jim Pillen proclaimed the month of April as Financial Awareness Month in Nebraska. The proclamation recognizes the importance of financial awareness to Nebraskans and Nebraska’s status as a leader in financial innovation, financial literacy education, and consumer and vulnerable adult protection.

The month-long financial awareness campaign is an initiative from the Nebraska Council on Economic Education (NCEE) and the Nebraska Department of Banking and Finance (NDBF). Working together, the chartered and licensed financial industries, NCEE, and NDBF will be conducting a variety of educational activities in schools, workplaces, and communities this month, and throughout the year, to educate Nebraskans about the importance of setting goals, making wise financial decisions, and protecting yourself and your financial future.

“Financial awareness is worthy of celebration. The concept of having options when saving, investing, and spending time and resources is exciting. We all make choices with our money that make a difference to our community, as well as to our personal financial health. Your decisions today will impact on your spending and quality of life tomorrow. Today is a great day to celebrate Financial Awareness,” NDBF Director Kelly Lammers said. “Financial awareness isn’t necessarily studying, it’s thinking about your future, your non-profit, and your community with a consideration as what could you do to make a difference. Nebraska’s communities have inspired visionary lawmakers to pass legislation such as Protecting Vulnerable Adults from Financial Exploitation Act and the Nebraska Financial Innovation Act. With financial literacy in mind, these laws are enabling people to make decisions today to plan for tomorrow.”

One of NCEE’s signature programs is the Nebraska In-School Savings Program. These programs give select upper elementary students an opportunity to gain job skills working as school branch tellers. Student tellers from several Nebraska in-school savings programs joined in the proclamation signing celebration. All students in schools with a savings programs are given the opportunity to participate and save weekly. Students are rewarded with incentives for frequency of saving (not amounts), as the program is designed to reward and instill the habit of saving.

“Financial literacy is not just about managing money; it’s about empowering individuals to make informed decisions about their finances, paving the way for a brighter future. The return on investment is huge. Research shows that individuals who receive financial education have higher savings rates, reduced debt levels, and improved credit scores,” said Dr. Jennifer Davidson, President of NCEE.

“Teaching our kids about the value of money, including how to save and how to spend, are skills that last a lifetime,” said Governor Jim Pillen. “That kind of knowledge creates possibility and opportunity. It also provides security. The power of financial awareness can’t be undersold.”

Governor Pillen, Director Lammers, and Dr. Davidson encourage all Nebraskans to take part in financial awareness efforts offered by NCEE, NDBF, and other organizations, including:

The Nebraska Council on Economic Education is the premiere organization providing economic and financial education and resources to Nebraska. NCEE programming and resources can be found at http://nebraskacouncil.unl.edu and http://nceefinance.org.
NDBF has information on financial education topics at https://ndbf.nebraska.gov/consumers/consumer-resources.
The Office of the Nebraska Attorney General has information on how to protect yourself from identity theft and scams at https://ProtectTheGoodLife.Nebraska.gov.
The Nebraska State Treasurer’s Office, in partnership with NCEE, has a robust and personalized financial education learning center, Enrich. https://nast.enrich.org/landing/nast-start-nebraska

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NDBF Orders Sigue Corporation to Cease Money Transmission Activities

Publication Date: March 22, 2024

FOR IMMEDIATE RELEASE

CONTACT Christopher German, Money Transmitters & Digital Assets Counsel

Phone 402-471-2171

Email dob.consumerfinance@nebraska.gov

_____________________________________________________________________________________

NDBF Orders Sigue Corporation to Cease Money Transmission Activities

Sigue Corporation Failed to Satisfy Outstanding Money Transmission Liabilities, Violating State Law

March 22, 2024 (Lincoln, NE) – Today, the Nebraska Department of Banking and Finance (“Department”) ordered Sigue Corporation to cease engaging in money transmission activities in Nebraska as the company can no longer responsibly serve customers due to its declining financial position. Thirty-nine states, Puerto Rico, and the District of Columbia coordinated to issue this consent order.

Sigue is a state-regulated money transmission company which was formerly licensed in Nebraska and 48 other states (NMLS ID 915912). Over the past several months, Sigue experienced significant financial deterioration. The company failed to complete multiple money orders and transmissions and to maintain adequate net worth and permissible investments to cover outstanding liabilities, both violations of state money transmission law. Many customers are still waiting for their funds.

The consent order requires the company to preserve and provide access to all books and records, including information on impacted customers. Consumers who have been impacted or believe they may have been impacted should contact the Department. For additional information, contact the Nebraska Department of Banking and Finance at 402-471-2171 or via the Department’s website, https://ndbf.nebraska.gov/ in the Complaints section.

Sigue-Interim-Consent-Order-FE032224.pdf

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Hearing notice

Publication Date: February 29, 2024

Hearing Notice

NOTICE OF RULEMAKING HEARING

NEBRASKA DEPARTMENT OF BANKING AND FINANCE

Notice is hereby given that the Nebraska Department of Banking and Finance will hold a rulemaking hearing on March 1, 2024, commencing at 10:00 a.m., at the offices of the Department of Banking and Finance, 1526 K Street, Suite 300, Lincoln, Nebraska 68508.

The purpose of the hearing is to take testimony and evidence concerning the following changes to the Rules and Regulations of the Department:

1) The proposed revisions to Title 48, Chapter 6

2) The proposed revisions to Title 48, Chapter 7

3) The proposed revisions to Title 48, Chapter 9

4) The proposed revisions to Title 48,

Chapter 12 48 NAC 6-Agents of Broker-Dealers: The purpose of the proposed revisions to Title 48, Chapter 6 is to adopt the North American Securities Administrators Association (“NASAA”) “Examination Requirements for Broker-Dealer Agents Model Rule.” This rule will allow agents who have elected to participate in the Financial Industry Regulatory Authority’s (“FINRA”) Maintaining Qualifications Program to extend the validity of their state examinations from two to five years.

48 NAC 7-Investment Advisers: The purpose of the proposed revisions to Title 48, Chapter 7 is to adopt NASAA’s “Model Rule for Investment Adviser Written Policies and Procedures Under the Uniform Securities Act of 1956 and 2002.” This rule requires investment advisers to adopt policies and procedures to ensure compliance with the Securities Act of Nebraska. The model rule will replace existing provisions in Chapter 7 that require investment advisers to adopt similar policies and procedures.

48 NAC 9-Investment Adviser Representatives: The purpose of the proposed revisions to Title 48, Chapter 7 is to adopt two NASAA model rules. The first model rule, the NASAA “Investment Adviser Representative Examination Validity Program Model Rule” will allow investment adviser representatives who participated in NASAA’s Exam Validity Extension Program and complete continuing education to extend the validity of their state examinations from two to five years. The second model rule, NASAA’s “Model Rule on Investment Adviser Representative Continuing Education” implements continuing education requirements for investment adviser representatives.

48 NAC 12-Fraudulent, Dishonest and Unethical Business Practices: The purpose of the proposed revision is to adopt NASAA’s “Unpaid Arbitration Awards Under the Uniform Securities Acts of 1956 and 2022.” This rule provides that the failure to pay arbitration awards, court judgments, and regulator fines is an unethical practice.

The rulemaking hearing is being conducted under and by virtue of the provisions of Section 84- 907, R.R.S 1943, as amended, which provides that COPIES OF THE PROPOSED RULES ARE AVAILABLE FOR PUBLIC EXAMINATION at the Office of the Department of Banking and Finance, 1526 K Street, Suite 300, Lincoln, Nebraska 68508, and at the Office of the Secretary of State, Regulations Division, 1201 N Street, Suite 120, Lincoln, Nebraska 68509. In addition, the proposed rules are available on the Department of Banking and Finance’s website at https://ndbf.nebraska.gov, and the Secretary of State’s website www.sos.ne.gov.

A copy of the Fiscal Impact Statement is available at the Office of the Department of Banking and Finance and on the Department’s website.

All interested persons are invited to attend and testify at the hearing. Interested persons may also submit written comments to the Department of Banking and Finance prior to the hearing, which comments will be made part of the hearing record at the time of the hearing.

If auxiliary aids or reasonable accommodations are needed for attendance at this hearing, please call the Nebraska Department of Banking and Finance at (402) 471-2171, or, for persons with hearing impairments, please call the Nebraska Relay System, (800) 833-7352 TDD. This contact should be made at least seven (7) days prior to the hearing.

Dated at Lincoln, Nebraska, this 12th day of January, 2024.

Kelly Lammers, Director

Nebraska Department of Banking and Finance

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Fiscal Impact Statement

Romance Scams

Publication Date: February 13, 2024

Romance Scams

Are you an Informed Investor?

Don’t Get Swept Away by a Romance Scam

February 14, 2024 — Government agencies across North America are seeing an increase in investment-focused romance scams. Sometimes these scams are referred to as “financial grooming,” or “pig butchering.”

In March 2023, the Federal Bureau of Investigation (FBI) released a report that said its Internet Crime Complaint Center (IC3) identified more than 19,000 victims of confidence or romance scams resulting in losses greater $735 million. In a similar report, the Federal Trade Commission (FTC) showed that romance scammers cost nearly 70,000 consumers $1.3 billion in 2022.

Investments tied to cryptocurrencies and digital assets topped the North American Securities Administrators Association’s (NASAA) 2023 list of investor threats. Some of these threats may be tied to romance scams. Finally, the Canadian Securities Administrators (CSA) has also warned of fraudsters using social media, messaging apps, and online dating sites to lure people into investment scams.

Romance Scams Are Real; Know the Warning Signs

Romance scammers set online traps and use technology and social media platforms to profile targets. They also spend time getting to know people before asking for money or introducing an investment opportunity. Here are some common tactics and warning signs to look out for:

• Reluctance to meet in-person or by video: Most scammers avoid meeting face-to-face because often they aren’t who they say there are. They pretend to be anyone they think you would be attracted to. They will make excuses not to meet, like being too busy with work, or not being able to get away from family or community obligations. “In-person” may include refusing a video chat with the victim while they groom them for the scam. Scammers may use video filters or Artificial Intelligence (AI) technology to disguise their identities, sometimes referred to as “deep fakes.”

• Wanting a long-distance relationship: Once you enter a “relationship” with an online romance scammer, they might tell you that they live far away, travel a lot for work, or have a job outside the country or area you live. They won’t offer to visit you and may discourage you from trying to visit them.

• Discussing wealth or business success: In order to interest you in investing, romance scammers may brag about how successful they are. They may flaunt their supposed wealth, using photos of luxury items, real estate, expensive cars, etc. They may offer to help you make money or become wealthy, often offering access to supposed inside information or trading secrets for trendy or complex investments, like cryptocurrencies or non-fungible tokens (NFTs).

• Pressuring you to give them money: At some point, the romance scammer will likely ask you point blank to provide them with a sum of money. They will likely try to show you that your investment has grown quickly and substantially to hook you into giving larger and larger amounts. If you show reluctance, they may put pressure on you by saying manipulative things, such as that they are considering breaking off the relationship or they are offended that you can’t trust them.

• Introducing an app or website: When you show a willingness to invest, a romance scammer may steer you to an investing app that they say they are using or a website that offers investments. The website or app may be controlled by the scammer or a criminal organization they are associated with. The scammer may also offer to teach you how to invest or trade, and then ask for remote access to your computer or request your online banking information.

How to Protect Yourself from Romance Scams

When we’re smitten with someone, we tend to lead with our heart instead of our head. A romance scammer depends on this, encouraging you not to look too deeply into their background or the type of scheme they are promoting. Protect yourself by following these steps:

• Keep your guard up: If a new romantic interest suddenly starts asking for money or encourages you to start investing, be cautious. A potential partner should be focused on your developing relationship, not your money or investing interests.

• Do your research: Online searches may provide a better idea about the person you are dealing with and what they do. Most people have an online presence these days, which includes personal and professional information. Fake online profiles tend to lack information about an individual, and the images used in an activity feed may feel impersonal or staged. Scammers often use stolen images from real people or stock images, so it’s good to do online image searches to check the origin and use of the image.

• Check registration: Firms that provide investment advisory services in the U.S. are typically registered with the U.S. Securities and Exchange Commission (SEC) or one or more state securities regulators. In Canada, firms and individuals must be registered with the securities regulators in the provinces in which they operate. Check the SEC’s Investment Adviser Public Disclosure database or FINRA’s BrokerCheck to verify registered individuals or firms. In Canada, use the CSA’s National Registration Search. To find your state or provincial securities regulator, visit the NASAA website.

• Suggest meeting in-person: To determine if a person is who they say they are, you can try and meet in-person in a public place. Make sure to meet in a safe, busy, and public place. Bring a friend or family member. This person doesn’t need to stick around if things go well, but it will give you a witness and an easy excuse to leave if you feel uncomfortable.

• Research websites and apps: Scammers create a custom online platform and direct you to it in order to take your money and hide from authorities. Building a custom app or website that can accept money or crypto assets is surprisingly easy. If a person encourages you to invest and recommends an investing website or app, make sure it is registered to do business in your state or province before investing. When dealing with registered investing platforms, do business directly with the platform, don’t allow someone to act as an intermediary or access your computer.

• Look for red flags: Scammers might attempt to make the investment look safe by convincing you that they are investing and taking risks too. Alternatively, they may say the investment is low risk or no risk, while offering guarantees that your money will be safe. This is a red flag of investment fraud. Review NASAA’s Warning Signs of Fraud to better understand common tactics fraudsters use to scam people.

The Bottom Line

Be careful when you meet new people online, especially when you are looking for romance. Seeking a romantic partner is a complex and emotional experience at the best of times – so it’s a good idea not to mix business with romance. Don’t get swept away – make sure you are in a relationship with a real person who cares about you before even considering sharing financial information, making an investment, or loaning a person money.

Also, reach out to your local state or provincial securities regulator before making any investment or if you ever suspect fraud may be involved. Go to ndbf.nebraska.gov for more information on what Nebraska resources are available for victims. If you or someone you know has been scammed, report it to Nebraska Department of Banking and Finance at 402-471-2171 or via our website in the Complaints section.

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ACI Payment

Publication Date: October 19, 2023

State Regulators Settle with ACI Payments, Inc. for Unauthorized Withdrawals from Mr. Cooper Customer Accounts

State regulators and state attorneys general levy combined fines of $20 million for data misuse impacting 480,000 consumers nationwide

Wednesday, October 18, 2023 (Lincoln) — The Nebraska Department of Banking and Finance and 43 other state financial agencies have reached settlements with ACI Payments, Inc., for erroneously initiating electronic transactions totaling $2.3 billion from the accounts of 480,000 mortgage-holders serviced by Mr. Cooper (formerly known as Nationstar Mortgage, LLC). State regulators levied $10 million in fines through a multistate enforcement action led by regulators from Arkansas, Connecticut, Maryland and Texas with support from the Conference of State Bank Supervisors. Additionally, 50 attorneys general, including the attorney general of Nebraska, levied $10 million in fines to ACI, in coordination with state regulators. Together these fines totaled $20 million.

ACI Payments, a subsidiary of ACI Worldwide Corp., is a state-regulated money services business licensed in Nebraska and nearly all other U.S. states (NMLS ID 936777). Mr. Cooper offered ACI’s Speedpay product for its customers to schedule their monthly mortgage payments, enabling automatic transfers of authorized mortgage payments from their personal bank accounts to Mr. Cooper. The violations occurred when ACI Payments erroneously used live customer data in a test of its Speedpay platform, causing unexpected and sometimes multiple mortgage payments from customer accounts. In some cases, these transactions exposed consumers to overdraft or insufficient funds fees.

Upon notification of the incident from ACI Payments, state regulators commenced a multistate money transmission investigation reviewing all aspects of the event, including investigating the facts and circumstances surrounding the erroneous transactions, evaluating consumer impact, analyzing the root cause of the incident, and evaluating the remedial steps taken by the company.

This enforcement action orders the following of ACI Payments, Inc.:

Risk and Compliance Programs – Maintain a comprehensive Enterprise Risk Management Program and a Third-Party Risk Management Program tailored to the nature, size, complexity and risk profile of ACI.
Agreement Monitoring – Regular reporting (for two years) to a state regulator monitoring committee to ensure both the adequacy of the risk management programs and compliance with the order.
Administrative Costs and Penalties – Payment of $10 million in fines for administrative costs and penalties.

State financial regulators license and supervise over 33,000 nonbank financial services companies through the Nationwide Multistate Licensing System (NMLS), including mortgage companies, money services businesses, consumer finance providers and debt collectors. Nebraska consumers can submit complaints about nonbank financial services companies through its website at Complaints | Nebraska Banking and Finance or by calling NDBF at 402-471-2171. Consumers can also verify that a company is licensed to do business in their state, and view past enforcement actions, by visiting NMLS Consumer Access.

Click HERE to read the enforcement action which includes the list of participating states.

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Consumer Advisory

Publication Date: October 18, 2023

Fort Calhoun Man Ordered to Stop Conducting Misleading and Unlicensed Mortgage Activity

October 17, 2023 (LINCOLN, NEB.) – The Nebraska Department of Banking and Finance (NDBF) issued a Cease and Desist Order against a Fort Calhoun, Nebraska man, Jeff Rothlisberger (“Rothlisberger”), in connection with residential mortgage loan activities being conducted without a license.

According to the Order, Rothlisberger solicited Nebraska residents to enter into reverse mortgages and other types of residential mortgage loan products without obtaining and maintaining a Nebraska Mortgage Loan Originator License. Further, the Order states that Rothlisberger engaged in activities that were false, misleading, and conducted in bad faith.

The Order prohibits Rothlisberger from conducting any and all unlicensed mortgage loan origination activities, which includes offering residential mortgage loans and soliciting Nebraska residents to apply for a residential mortgage loan.

Individuals who are offered such loans, or solicited to apply for such loans, by Rothlisberger are asked to contact the Department.

More information about the laws governing financial institutions in Nebraska can be found on NDBF’s website at ndbf.nebraska.gov. If you have questions about the legitimacy of a residential mortgage loan product or the validity or status of an individual or company’s license to conduct mortgage business in Nebraska, call NDBF at (402) 471-2171 in Nebraska, or at (877) 471-3445 if you are out of state.

NASAA President Claire McHenry

Publication Date: September 14, 2023

NDBF Deputy Director Claire McHenry announced as NASAA President

September 12, 2023 (Lincoln, NE)

Claire McHenry, Deputy Director of the Nebraska Department of Banking and Finance (NDBF), and head of the Department’s Bureau of Securities, begins her one-year tenure today as President of the North American Securities Administrators Association (NASAA). McHenry gave her inaugural address during the annual NASAA conference, held this year in San Diego, California.

McHenry has over fifteen years of state securities regulation experience. Prior to joining NDBF in May 2016, she was an examiner with the Securities Bureau of the DC Department of Insurance, Securities and Banking where she led examinations of complex investment advisers and broker-dealers, investigated unlicensed activities and unregistered securities offerings, and developed enforcement cases. McHenry is a member of the NASAA Broker-Dealer Section and is a NASAA Spring Conference Chair. McHenry has been a speaker at NASAA training conferences presenting on audit findings and effective private fund examinations. She earned her Bachelor of Science and Business Administration from Washington University in St. Louis and her Juris Doctorate from American University – Washington College of Law.

“Nebraska has greatly benefited from having McHenry’s leadership as the Deputy Director of the Securities Bureau,” said Kelly Lammers, NDBF Director. “She has a calm passion in the promotion of the securities industry, recognition of consumer protection, and is a proven leader in policy, moving forward the Nebraska Protection of Vulnerable Adults from Financial Exploitation Act, with a commitment to keeping the Securities Rules current. The Department is both proud of McHenry’s accomplishments and looking forward to our continued strong working relationship with NASAA and with President McHenry leading North American securities policy as NASAA President.”

Organized in 1919, NASAA is the oldest international organization devoted to investor protection. It is a voluntary association whose membership consists of 67 state, provincial, and territorial securities administrators in the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Canada, and Mexico.

NASAA President Claire McHenry