The Nebraska Personal Loan Law (Neb.Rev.Stat. § 8-820) provides for “reasonable loan service costs” and that such costs not be construed as interest. The following paragraph is the text of Section 8-820. Note that the language printed in bold contains the relevant provisions of law allowing for reasonable loan service costs.
Subject to the provisions of Sections 8-815 to 8-829, any registered bank may contract for and receive, on any personal loan, charges at a rate not exceeding nineteen percent simple interest per year. In the case of loans initiated by credit card or other type of transaction card, the rate may be any amount agreed to by the parties. Any registered bank or bank acquired pursuant to Sections 8-1512 and 8-1513 may also charge commercially reasonable fees for service and use of a credit card or other type of transaction card on a per transaction and monthly or annual basis. Such charges shall not be construed as interest. Notwithstanding the provisions of this section, in the case of loans not initiated by credit card or other type of transaction card, a bank may charge a minimum fee of up to seven dollars and fifty cents in lieu of interest on personal loans and reasonable loan service costs as defined in subdivision (2) of Section 45-101.02. Such loan service costs shall not be construed as interest.
Such reasonable loan service costs found in subdivision (2) of § 45-101.02 read as follows:
Loan service costs shall mean reasonable and necessary costs and charges incurred in connection with the making, closing disbursing, servicing, extending, transferring, or renewing of a loan, including but not limited to: (a) prepayment charges; (b) late charges; (c) premiums for hazard, private mortgage, disability, life or title insurance; (d) fees for escrow, appraisal, abstracting, title examination, surveys, inspections, credit reports, and recording of documents; (e) origination fees; (f) interest on interest after default; and (g) costs and charges incurred for determining qualification for the loan proceeds and disbursement of the loan proceeds.
Although the law is clear in providing for loan service costs, there are standards of “reasonableness” and “necessity” in the amount of fees that may be charged by to customers. These standards should be kept in mind if your bank develops a program assessing such fees.