Nurses and bank officers to see upcoming licensing reform

The Platte Institute’s fight to remove barriers to better job opportunities continues with hearings on the licensing of nurses (LB342) and executive bank officers (LB341). 

The hearing for LB342 will discuss updating the national nursing licensure compact.  This agreement allows Nebraska’s nurses to have one multistate license with the ability to practice in both their home state and other compact states.

The hearing for LB341 will focus on licensing for Executive Bank Officers.  Member banks of the Nebraska Bankers Association have suggested for many years that this license does not serve a meaningful purpose and should be eliminated. 

In this article, let’s look at the banking license. Under current law, any person who directly or indirectly makes loans or investments for a state-chartered financial institution, or who is involved in management functions or substantial employee supervision is required to obtain an Executive Officer’s License.

Nebraska is the only state in the country that has an Executive Officer’s License, and it only applies to state-chartered banks.  National banks operating in Nebraska are not subject to this licensing law because the Department of Banking does not regulate national financial institutions. This means that in many cases, this license is required of one bank branch while another bank branch on the same street or in the same town isn’t required to comply. 

This legislation would allow a bank to have an opt-out provision so its executive officers could be exempt from the requirement to apply for and obtain a license from the Department of Banking. 

Nebraska is home to 166 state-chartered banks and 24 federally chartered banks (these numbers reflect the banks as a whole organization, not branches).  That does not include the national banks not headquartered in Nebraska, but located in the state, such as Wells Fargo, U.S. Bank, Great Western Bank, or Bank of the West.  The 166 state-chartered banks are operating at a competitive disadvantage because they must comply with more regulations than the other banks located in our state.

Over the past 20 years, very few individuals have been denied the right to obtain this license of have faced infractions.  As a result, state-chartered banks have had to comply with a licensing requirement that far outweighs any benefits derived from its existence.

Occupational licenses are meant to protect the public and keep incompetent individuals from working in roles where they are not properly trained.  In this situation, the executive bank officer’s license is a barrier to entry, and a tax for employing people, but provides no meaningful public safety benefits.