On May 28, Nevada Governor Joe Lombardo approved SB 437, creating a new framework for internet-based consumer lenders that lend to Nevada residents. The law defines an "Internet consumer lender" as any entity that exclusively offers or facilitates consumer loans online and becomes effective on October 1, 2025.
The law aims to modernize Nevada's licensing regime by recognizing online-only lending models and reducing barriers for out-of-state companies. It also imposes safeguards to ensure Nevada residents receive legal protections grounded in state law. The new requirements will apply only to loans entered into on or after October 1.
The legislation introduces several key provisions, including:
- Remote license eligibility. Lenders may apply for a Nevada license tied to an office located outside the state. Unlike traditional lenders, internet consumer lenders are not required to maintain a separate Nevada location to obtain licensure.
- In-state law and venue requirements. Loan agreements with Nevada residents must state that Nevada law governs the agreement and that any legal or arbitration proceedings will take place in Nevada. Any conflicting terms are void and unenforceable.
- Exemption from co-location restrictions. Lenders may operate in a shared office or alongside other businesses, avoiding restrictions that typically prohibit lending operations from sharing space with unrelated commercial activity.
Putting It Into Practice: Nevada's new law comes as state legislatures are increasingly stepping into regulatory gaps left by federal agencies (previously discussed here and here). As states continue to expand their regulatory practices, online lenders should ensure their compliance programs are responsive to emerging state-level licensing and consumer protection rules.
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