Opinion No. (1990)

REQUESTED BY: Cynthia Milligan, Director of Department of Banking and Finance QUESTION:

Does a state chartered bank violate Nebraska branch banking laws when it has an insurance company not only act as a loan production office (LPO), but also handle bank notes and bank drafts of proceeds from that note?

CONCLUSION:

Yes.

For purposes of this opinion, the following facts have been assumed. An insurance company (Insurance Company) has agreed to assist in processing automobile loans for a state chartered bank (Bank) at locations throughout eastern Nebraska and western Iowa. Contact with the insurance…