Provides for the licensure and regulation of merchant acquirer limited purpose banks. (BDR 55-974)

REQUIRES TWO-THIRDS MAJORITY VOTE
(§§ 39, 58, 66, 75, 81, 85, 88, 105)
S.B. 438

- *SB438*

SENATE BILL NO. 438–COMMITTEE ON COMMERCE AND LABOR

(ON BEHALF OF THE SECRETARY OF STATE)

MARCH 24, 2025
____________

Referred to Committee on Commerce and Labor

SUMMARY—Provides for the licensure and regulation of merchant
acquirer limited purpose banks. (BDR 55-974)

FISCAL NOTE: Effect on Local Government: Increases or Newly
Provides for Term of Imprisonment in County or City
Jail or Detention Facility.
Effect on the State: Yes.

~

EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

AN ACT relating to financial institutions; providing for the
licensure and regulation by the Commissioner of
Financial Institution s of merchant acquirer limited
purpose banks; setting forth various procedures and
requirements for the organization and licensure of
merchant acquirer limited purpose banks; setting forth the
powers and duties of the Commissioner with respect to
merchant a cquirer limited purpose banks; imposing
various requirements and restrictions concerning the
operation of merchant acquirer limited purpose banks;
establishing certain prohibited acts relating to merchant
acquirer limited purpose banks; revising certain
provisions relating to financial institutions; providing
penalties; and providing other matters properly relating
thereto.
Legislative Counsel’s Digest:
Existing law provides for the licensure and regulation of various financial 1
institutions by the Commissi oner of Financial Institutions. (Title 55 of NRS) This 2
bill provides for the licensure and regulation by the Commissioner of Financial 3
Institutions of merchant acquirer limited purpose banks. Under section 66 of this 4
bill, a merchant acquirer limited purpose bank, also known as a merchant bank, is 5
authorized to engage in: (1) certain activities associated with effecting transactions 6
within payment card netwo rks, which section 15 of this bill designates as 7

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“merchant acquiring activities”; (2) certain activities involving the processing of 8
payment card transactions, which section 22 of this bill designates as “settlement 9
activities”; (3) the accepting and holding of certain deposits; and (4) any incidental 10
activity that is approved by the Commissioner in accordance with procedures set 11
forth in section 68 of this bill. Section 71 of this bill sets forth certain restrictions 12
on the accepting and holding of deposits by a merchant bank, including prohibiting 13
a merchant bank from accepting and holding any deposit other than a deposit from 14
a corporation that owns a majority of the shares of the merchant bank. Section 70 15
of this bill prohibits a merchant bank from engaging in any activity that is not 16
authorized by the provisions of this bill, including, among other activities, engaging 17
in the business of banking, money transmission, acting as a fiduciary, making loans 18
and various other prohibited activities. 19
Sections 3-25 of this bill define certain words and terms for the purposes of this 20
bill. 21
Sections 26, 28-31, 33, 35 and 36 of this bill set forth various p owers and 22
duties of the Commissioner with respect to the licensure and regulation of merchant 23
acquirer limited purpose banks. Section 27 of this bill prohi bits an officer or 24
employee of the Division of Financial Institutions from having certain involvement 25
with a merchant bank. Section 32 of this bill sets fo rth certain requirements for the 26
provision of notices required under the provisions of this bill. Sections 34, 38, 39 27
and 41 of this bill set forth procedures and requirements for the organization and 28
licensure of a merchant bank. Section 40 of this bill au thorizes: (1) a state agency 29
to apply for and be issued a license to operate a merchant bank; and (2) the 30
Commissioner to, by regulation, waive or modify any requirement set forth in this 31
bill that the Commissioner determines is not appropriate for a merch ant bank that is 32
operated by a state agency. 33
Section 37 of this bill exempts a participant in the Regulatory Experimentation 34
Program for Product Innovation from the provisions of this bill. 35
Section 42 of this bill requires a merchant bank to provide certain items to the 36
Commissioner before beginning busine ss, including a letter of credit to satisfy the 37
costs and expenses associated with a receivership. Section 43 of this bill sets forth 38
certain requirements for such a letter of credit. Section 45 of this bill authorizes the 39
Commissioner to require a merchant bank to provide an additional letter of credit 40
and the holding company of a merchant bank to provide a certain guaranty. Section 41
44 of this bill requires a merchant bank to maintain bond coverage in amounts and 42
in a form acceptable to the Commissioner. Sections 46 and 72 of this bill require a 43
merchant bank to maintain certain capital. 44
Section 47 of this bill authorizes a merchant bank to establish certain offices in 45
this State. Section 48 of this bill sets forth certain restrictions on advertising by a 46
merchant bank. Section 49 of this bill sets forth certain restrictions on the business 47
name and certain forms used by a merchant bank. Sections 50-57, 59-62 and 64 of 48
this bill set forth certain requirements and restrictions on the operations of the board 49
of directors of a merchant bank. Section 58 of this bill requires a merchant bank to 50
notify the Commissioner of, and the Commissioner to investigate, certain changes 51
or proposed changes in the ownersh ip of a merchant bank. Section 63 of this bill 52
authorizes a merchant bank to indemnify and defend its officers, directors, 53
employees, agents and other parties under certain circumstances. 54
Section 64 authorizes a merchant bank to purchase or lease certain property, 55
subject to certain limitations. Sections 65 and 66 of this bill set forth certain 56
restrictions on the sale of the stock of a merchant bank. Section 67 of this bill sets 57
forth the activities in which a merchant bank may engage. Section 69 of this bill 58
prohibits a merchant bank from engaging in a merchant acquiring activity unless 59
the activity originates in the United States and the merchant with whom the activity 60
is engaged has a physical location in the United States. Section 73 of this bill 61
establishes requirements for the handling of merchant funds by a merchant bank. 62

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Section 74 of this bill prohibits a merchant bank from making any investment other 63
than certain specified investments. 64
Sections 75 and 76 of this bill require a merchant bank to provide certain 65
reports and information to the Commissioner. Sections 77-83 of this bill set forth 66
various powers of the Commissioner with respect to examinations of mercha nt 67
banks and other powers relating to the investigation and enforcement of the 68
provisions of this bill. Sections 77 and 110 of this bill provide for the 69
confidentiality of certain information obtained by the Commissioner. Sections 84 70
and 85 of this bill require a merchant bank to perform certain audits and cooperate 71
with any audits and examinations performed by the Commissioner. Section 85 72
additionally requires a merchant bank to pay an assessment levied by the 73
Commissioner relating to such audits and examinat ions. Sections 86 and 87 of this 74
bill authorize the Commissioner to take certain disciplinary actions against a 75
merchant bank. 76
Section 88 of this bill sets forth certain requirements for the reorganization, 77
merger or consolidation of a merchant bank. Section 89 of this bill sets forth certain 78
requirements for the voluntary liquidation of a merchants bank. 79
Section 71 authorizes a merchant bank to apply to receive deposit insur ance 80
from the Federal Deposit Insurance Corporation. Sections 90-100 of this bill 81
establish procedures and requirements for the liquidation of a merchant bank whose 82
deposit accounts are insured by the Federal Deposit Insurance Corporation. 83
Sections 100 and 101 of this bill establish procedures and requirements for the 84
reorganization of a dissolved merchant bank. 85
Section 102 of this bill makes it a misdemeanor to make certain untrue and 86
derogatory statements concerning a merchant bank, or take certain similar actions, 87
under certain circumstances. Section 103 of this bill imposes certain penalties upon 88
a merchant bank for engaging in certain prohibited acts. 89
Sections 104-109 of this bill add references to merchant ban ks and the 90
provisions of this bill to various provisions of existing law pertaining to financial 91
institutions so that merchant banks are treated similarly to other financial 92
institutions for certain purposes. 93

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

Section 1. Title 55 of NRS is hereby amended by adding 1
thereto a new chapter to consist of the provisions set forth as 2
sections 2 to 103, inclusive, of this act. 3
Sec. 2. As used in this chapter, unless the context otherwise 4
requires, the words and terms defined in sections 3 to 25, 5
inclusive, have the meanings ascribed to them in those sections. 6
Sec. 3. “Chargeback” means a transaction that is returned to 7
a merchant acquirer limited purpose ban k through a payment 8
card network. 9
Sec. 4. “Deposit” means that part of the liability of a 10
merchant bank which is credited to the account of the holder 11
thereof. 12
Sec. 5. “Deposit account” mea ns an account that holds 13
deposits. 14

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Sec. 6. “Depository institution” means any state bank or 1
merchant acquirer limited purpose bank, association, limited -2
liability company, corporation or other person organized for the 3
purpose of conducting a banking business, whether chartered by 4
this State, another state or the Federal Government, which: 5
1. Holds or receives deposits, savings or share accounts; 6
2. Issues certificates of deposit; or 7
3. Provides to its customers other deposit accounts which are 8
subject to withdrawal by checks, drafts or other instruments or by 9
electronic means to effect payment to a third party. 10
Sec. 7. “Director” means the Director of the Department of 11
Business and Industry. 12
Sec. 8. “Division of Financial Institutions” means the 13
Division of Financial Institutions of the Department of Business 14
and Industry. 15
Sec. 9. “Holding company” has the meaning ascribed to it in 16
NRS 666.005. 17
Sec. 10. “Insolvency” or “insolvent” means one or more of 18
the following: 19
1. When a merchant acquirer limited purpose bank cannot 20
meet its deposit liabilities as they become due in the regular course 21
of business. 22
2. When the actual cash market value of the assets of a 23
merchant acquirer limited purpose bank is insufficient to pay its 24
liabilities to depositors and other creditors. 25
3. When the reserves of a merchant acquirer limited purpose 26
bank fall under the amount required by this chapter, and the 27
merchant bank fails to make good such reserve within 30 days 28
after being required to do so by the Commissioner of Financial 29
Institutions. 30
4. When the undivided profits and surplus of a merchant 31
acquirer limited purpose bank are inadequate to cover losses of 32
the merchant bank and the stockholders’ or members’ equity in 33
the merchant bank has been reduced below the requirements of 34
law. 35
Sec. 11. “Leverage capital ratio” means the ratio of the tier 36
one capital of a merchant acquirer limited purpose bank to the 37
average of the total assets of the merchant bank, not including 38
goodwill, intangible assets and money ultimately payable to 39
merchants, at the end of each day during the immediately 40
preceding month. 41
Sec. 12. “Main office” means the office of a merchant 42
acquirer limited purpose bank identified as such in the application 43
submitted pursuant to subsection 4 of section 39 of this act or the 44

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- *SB438*
location to which the main office is changed pursuant to 1
subsection 13 of section 39 of this act or other applicable law. 2
Sec. 13. “Merchant” means a person authorized by a 3
payment card network to accept payments in exchange for goods 4
or services. 5
Sec. 14. “Merchant acquirer limited purpose bank” or 6
“merchant bank” means a depository institution subject to the 7
provisions of this chapter to conduct the business of a merchant 8
acquirer limited purpose bank. 9
Sec. 15. “Merchant acquiring activities” means activities 10
associated with effecting transactions within a payment card 11
network in which a merchant acquirer limited purpose bank is 12
authorized to engage pursuant to subsection 1 of section 67 of this 13
act. 14
Sec. 16. “Merchant funds” means money received by a 15
merchant acquirer limited purpose bank as a result of its 16
performance of the activities authorized by section 67 of this act 17
which is ultimately payable to a merchant. 18
Sec. 17. “Merger” means th e consolidation of corporate 19
structures which results in the uniting of substantially all the 20
assets and liabilities of one merchant acquir er limited purpose 21
bank with those of another merchant bank. 22
Sec. 18. “Payment card” means a credit card, debit card, 23
prepaid card or any other payment device issued to a consumer 24
that enables access to a funding source of the consumer and is 25
used to make a payment to a merchant. 26
Sec. 19. “Payment card network” means any organization, 27
group, system or other collection of persons that is organized to 28
allow participants to accept or make payments. 29
Sec. 20. “Payment volume” means the greater of 1/12 of the 30
total dollar amount of payment transactions: 31
1. Executed by the merchant bank in the immediately 32
preceding 12 months; or 33
2. Forecast by the merchant bank for the immediately 34
following 12 months. 35
Sec. 21. “Risk capital” means the amount of tier one capital 36
required to be maintained by a merchant bank pursuant to 37
paragraph (c) of subsection 1 of section 72 of this act. 38
Sec. 22. “Settlement activities” means the processing of 39
payment card transactions to send to a payment card network for 40
processing, to make payments to a merchant and for the billing of 41
the holder of the payment card. 42
Sec. 23. “State bank” or “commercial bank” means a 43
limited-liability company, corporation or other person organized 44
for the purpose of conducting a banking business that is chartered 45

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- *SB438*
by this State to conduct the business of banking and is organized 1
pursuant to the provisions of chapter 659 of NRS. 2
Sec. 24. “Statutory capital” means the amount of capital 3
stock and paid-in surplus required to be maintained by a merchant 4
acquirer limited purpose bank pursuant to section 46 of this act. 5
Sec. 25. “Tier one capital” means the sum of statutory 6
capital, retained earnings, noncumulative perpetual preferred 7
stock, the secured portion of a guaranty required by section 45 of 8
this act and any letter of credit required by section 45 of this act, 9
less any accounts payable by an affiliate or holding company to 10
the merchant acquirer limited purpose bank, goodwill and 11
intangible assets. 12
Sec. 26. The Commissioner of Financial Institutions shall 13
administer the provisions of this chapter, subject to administrative 14
supervision by the Director. The Commissioner shall make the 15
decisions, determinations and enter the consents and orders 16
necessary or reasonably appropriate to accomplish the purposes of 17
this chapter. 18
Sec. 27. An officer or employee of the Division of Financial 19
Institutions shall not: 20
1. Be directly or indirectly interested in or act on behalf of 21
any merchant acquirer limited purpose bank; 22
2. Receive, directly or indirectly, any payment from a 23
merchant acquirer limited purpose bank; 24
3. Be indebted to any merchant acquirer limited purpose 25
bank; or 26
4. Obtain any services from a merchant acquirer limited 27
purpose bank conditioned upon a fraudulent practice or und ue or 28
unfair preference over other customers. 29
Sec. 28. The Commissioner of Financial Institutions shall: 30
1. Keep in his or her office: 31
(a) For not less than 5 years, every report made by a merchant 32
acquirer limited purpose bank. 33
(b) The original application of every merchant acquirer limited 34
purpose bank in a permanent file. 35
(c) Other administrative documents in the manner provided by 36
law or by appropriate regulations. 37
2. Provide a complete stenographic record of e very hearing 38
and proceeding conducted by his or her office and maintain, for 39
not less than 5 years, a transcript of the hearing or proceeding, 40
together with any regulation, order, decision, determination or 41
consent entered in connection with the hearing or proceeding. 42
Sec. 29. The Commissioner of Financial Institutions shall 43
supervise and make all policy with regard to all foreign and 44
domestic merchant acquirer limited purpose banks, companies 45

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and corporations governed by this chapter and doing business in 1
this State. 2
Sec. 30. The Commis sioner of Financial Institutions may 3
cause appropriate legal action to be taken in the district court of 4
any county to secure an injunction or order restraining a violation 5
of any provision of this chapter. 6
Sec. 31. The Co mmissioner of Financial Institutions may 7
adopt such regulations as may be reasonable or necessary to carry 8
out the purposes of this chapter. 9
Sec. 32. All notices must be in writing. All notices issued or 10
required to be issu ed by the Commissioner of Financial 11
Institutions must be sent by registered or certified mail and 12
become effective upon their deposit in the mail. 13
Sec. 33. The Commissioner of Financial Institutions may, 14
for reasonable cause and upon 15 days’ notice, amend or alter any 15
license issued by him or her, but the merchant acquirer limited 16
purpose bank may appeal the order of the Commissioner in the 17
manner provided in this chapter. 18
Sec. 34. 1. In addition to any other requirements set forth 19
in this chapter, each applicant must submit: 20
(a) Proof satisfactory to the Commissioner of Financial 21
Institutions that the applicant: 22
(1) Has a good reputation for honesty, trustworthin ess and 23
integrity and is competent to transact the business for which the 24
applicant seeks to be licensed in a manner which protects the 25
interests of the general public. 26
(2) Has not made a false statement of material fact on the 27
application for the license. 28
(3) Has not committed any of the acts specified in 29
subsection 2. 30
(4) Has not had a license issued pursuant to this chapter 31
suspended or revoked within the 10 years immediately preceding 32
the date of the application. 33
(5) Has not been convicted o f, or entered a plea of nolo 34
contendere to, a felony or any crime involving fraud, 35
misrepresentation or moral turpitude. 36
(b) A complete set of his or her fingerprints and written 37
permission authorizing the Division of Financial Institutions to 38
forward th e fingerprints to the Central Repository for Nevada 39
Records of Criminal History for submission to the Federal Bureau 40
of Investigation for its report. 41
2. In addition to any other lawful reasons, the Commissioner 42
of Financial Institutions may refuse to is sue a license to an 43
applicant if the applicant: 44

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(a) Has committed or participated in any act which, if 1
committed or done by a holder of a license, would be grounds for 2
the suspension or revocation of the license. 3
(b) Has previously been refused a licens e pursuant to this 4
chapter or has had such a license suspended or revoked. 5
(c) Has participated in any act which was a basis for the 6
refusal or revocation of a license pursuant to this chapter. 7
(d) Has falsified any of the information submitted to the 8
Commissioner in support of the application for the license. 9
Sec. 35. In addition to any other lawful reasons, the 10
Commissioner of Financial Institutions may suspend or revoke a 11
license if the licensee has engaged in any act that would be 12
grounds for denying a license pursuant to this chapter. 13
Sec. 36. The Commissioner of Financial Institutions may 14
issue subpoenas and require the attendance of parties for 15
examination. 16
Sec. 37. Except as otherwise required by the Director 17
pursuant to NRS 657A.430 or 657A.620, the provisions of this 18
chapter do not apply to a participant in the Regulatory 19
Experimentation Program for Product Innovation established and 20
administered pursuant to chapter 657A of NRS. 21
Sec. 38. 1. Merchant acquirer limited purpose banks must 22
be incorporated under the provisions of this chapter. For that 23
purpose all of the provisions of chapter 78 of NRS which are not 24
in co nflict with this chapter are hereby adopted as parts of this 25
chapter, and all the rights, privileges and powers and all the duties 26
and obligations of such domestic corporations and of the officers 27
and stockholders thereof shall be as provided in chapter 78 of 28
NRS except as otherwise provided in this chapter. 29
2. A person, firm, partnership, association or corporation 30
except a merchant bank incorporated under this chapter, an 31
affiliate of a merchant bank or an entity otherwise lawfully 32
conducting business in this State pursuant to this chapter, shall 33
not conduct or carry on the business of soliciting or advertising 34
the products or services of a merchant bank. This subsection does 35
not apply to banks, trust companies, licensed brokers, thrift 36
companies and credit unions. 37
Sec. 39. 1. The Secretary of State shall not issue a 38
certificate to a merchant acquirer limited purpose bank or 39
company authorizing it to do business until the articles of 40
association, agreement or incorporati on are approved by the 41
Commissioner of Financial Institutions. 42
2. The Secretary of State may not file an amendment to the 43
articles of the organization without the written approval of the 44
Commissioner of Financial Institutions. 45

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3. A merchant bank shall not sell, offer for sale, negotiate for 1
the sale of, take subscriptions for or issue any of its common or 2
preferred stock until it has first applied for and secured from the 3
Commissioner of Financial Institutions approval of an application 4
for permission to organize as provided for in this section. 5
4. Persons who desire to organize a merchant bank in 6
accordance with this chapter must first execute in triplicate an 7
application, in the form prescribed by the Commissioner of 8
Financial Institutions , for per mission to organize a merchant 9
bank before taking any other action in connection with the 10
organization. Upon execution of an application for permission to 11
organize, the original application and two copies of the application 12
must be submitted to the Commiss ioner. The applicants shall 13
submit with the application the name and address of each person 14
who is applying, the location of the proposed main office, an 15
itemized account of the financial condition of the proposed 16
merchant bank and of the applicants, the amount and character of 17
the proposed stock, statements, exhibits, maps and such additional 18
information as the Commissioner requires, together with an 19
affidavit that the representations made thereby are consistent with 20
the facts to the best of the applicants ’ information and belief. This 21
data must be sufficiently detailed and comprehensive to enable the 22
Commissioner to pass upon the application as to: 23
(a) The character and responsibility of the applicants; and 24
(b) The reasonable probability of the usefulness and success of 25
the merchant bank. 26
5. If the Commissioner of Financial Institutions approves the 27
application, he or she shall establish as conditions to be met before 28
the issuance of a charter requirements as to: 29
(a) The minimum number of shares of common or preferred 30
stock to be subscribed to the permanent capital of the merchant 31
bank; 32
(b) The minimum amount of paid-in surplus; and 33
(c) Such other requirements as the Commissioner deems 34
necessary or desirable. 35
6. When all the requirements of this chapter and of the 36
Commissioner of Financial Institutions have been fulfilled, the 37
Commissioner shall issue a charter for the merchant bank. Except 38
as otherwise provided in this subsection, the charter expires 12 39
months after issuance unless, within that time, the merchant bank 40
is actively engaging in the business of a merchant bank. The 41
Commissioner may extend the time of the conditional expiration 42
of the charter for an additional period or periods not exceed ing 43
360 days in the aggregate. 44

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7. A merchant bank shall not sell or issue any of its 1
permanent stock until it has first applied for and secured from the 2
Commissioner of Financial Institutions a license authorizing it to 3
operate as a merchant bank pursuant to the l aws of this State and 4
until it has satisfied the requirements of this chapter. 5
8. The Commissioner of Financial Institutions may extend 6
the time for any hearing provided for in this section, to the time 7
agreed upon by the parties. 8
9. The filing fees are: 9
(a) For filing an original application, not more than $4,000 for 10
the main office. The applicant shall also pay such additional 11
expenses incurred in the process of investigation as the 12
Commissioner of Financial Institutions deems necessary. All 13
money received by the Commissioner pursuant to this paragraph 14
must be placed in the Investigative Account for Financial 15
Institutions created by NRS 232.545. 16
(b) If the license is approved for issuance, not more than 17
$2,000 for the main office before issuance. 18
10. The Commissioner of Financial Institutions may impose 19
conditions requiring the impoundment of proceeds from the sale 20
of any stock, limiting the expense in connection with the sale of 21
stock and such other conditions as are reasonable and necessary 22
or advisable to insure the disposition of the proceeds from the sale 23
of the stock in the manner and for the purposes provided in the 24
permission to organize. 25
11. Every permission to organize issued by the Commissioner 26
of Financial Institutions must recite i n bold type that its issuance 27
is permissive only and does not constitute a recommendation or 28
endorsement of the organization or of the stock permitted to be 29
issued. 30
12. Any corporation applying pursuant to this section or 31
authorized to organize or estab lish a merchant bank shall provide 32
for a minimum par value of its permanent capital stock of at least 33
$1 in its articles of incorporation. Par value of permanent capital 34
stock may not be reduced below $1 without written permission of 35
the Commissioner of Financial Institutions. 36
13. The removal of the main office of a merchant bank to any 37
other location from its then existing location requires submission 38
of written notice at least 30 days before relocation to the 39
Commissioner of Financial Institutions and, if the Commissioner 40
determines that his or her approval is necessary, approval of the 41
Commissioner. An application seeking approval, if required by the 42
Commissioner, must be delivered to the Commissioner, together 43
with a fee to cover expenses attendant up on the investigation 44
required for the approval, which must be not less than $200. All 45

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money received by the Commissioner pursuant to this subsection 1
must be placed in the Investigative Account for Financial 2
Institutions created by NRS 232.545. 3
14. A merchant bank shall not pay any commissions or other 4
compensation for the subscription to or sale of the original issue 5
of its stock. 6
15. The Commissioner of Financial Institutions shall adopt 7
regulations establishing the amount of fees required pursuant to 8
this section. 9
16. The Commissioner of Financial Institutions shall 10
consider an application to be withdrawn if the Commissioner has 11
not received all information and fees required to complete the 12
application within 12 months after the date the applicatio n is first 13
submitted to the Commissioner or within such later period as the 14
Commissioner determines in accordance with any existing policies 15
of joint regulatory partners. If an application is deemed to be 16
withdrawn pursuant to this subsection or if the app licant 17
otherwise withdraws the application, the Commissioner may not 18
issue a license to the applicant unless the applicant submits a new 19
application and pays any required fees. 20
Sec. 40. 1. A state agency may apply for and be issued a 21
license to operate a merchant bank. 22
2. The Commissioner of Financial Institutions may, by 23
regulation, waive or modify any requirement set forth in this 24
chapter that the Commissioner determines is not appropriate for a 25
merchant bank that is operated by a state agency. 26
3. As used in this section, “state agency” has the meaning 27
ascribed to it in NRS 223.470. 28
Sec. 41. The powers, privileges, duties and restrictions 29
conferred and imposed upon any merchant acquir er limited 30
purpose bank, company or corporation, whether foreign or 31
domestic, existing or doing business under the laws of this State 32
are hereby abridged, enlarged or modified, as each particular case 33
may require, to conform with the provisions of this cha pter, 34
notwithstanding anything to the contrary in their respective 35
articles of incorporation or charters. 36
Sec. 42. Before a merchant acquirer limited purpose bank 37
begins business, the merchant bank must file with the 38
Commissioner of Financial Institutions: 39
1. A statement, under oath by the president or a manager, 40
containing the names of all the directors, managers and officers, 41
with the date of their election or appointment, terms of office, 42
primary residence and post offi ce address of each, the amount of 43
stock of which each is the owner in good faith and the amount of 44
money paid in on account of the stock, or the contribution made. 45

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Nothing may be received in payment of stock or contribution 1
except money. 2
2. If the mercha nt bank has applied to receive deposit 3
insurance from the Federal Deposit Insurance Corporation or its 4
successor agency pursuant to section 71 of this act, notice of that 5
fact and whether the application the application has been 6
approved. 7
3. The letter of credit required by section 43 of this act. 8
Sec. 43. 1. A merchant acquirer limited purpose bank shall 9
file with the Commissioner of Financial Institutions and 10
continuously maintain an irrevocable letter of credit made payable 11
to the Commissioner to satisfy the costs and expenses associated 12
with a receivership of the merchant bank. The letter of credit must 13
be: 14
(a) In an amount determined by the Commissioner, but in no 15
event in an amount that is less than $100,000; 16
(b) In a form satisfactory to the Commissioner; and 17
(c) Issued by a financial institution authorized to do business 18
in this State that is approved by the Commissioner. 19
2. If the Commissioner of Financial Institutions takes 20
possession of a merchant bank, the Commissioner may use the 21
letter of credit maintained pursuant to subsection 1 to satisfy costs 22
and expenses related to the receivership including, without 23
limitation, the costs and expenses incurred by the receiver or 24
deputy receiver in administering the receivership. 25
Sec. 44. 1. A merchant acquirer limited purpose bank shall 26
maintain bond coverage in such amounts and form which is 27
acceptable to the Commissioner of Financial Institu tions. The 28
bond coverage may allow for a deductible amount or provision 29
adopted under regulations adopted by the Commissioner. 30
2. When requested by the Commissioner of Financial 31
Institutions, the merchant bank shall provide a duplicated copy of 32
the invo ice showing that the bond premium has been paid or 33
satisfied. 34
3. The face amount of the surety bond must comply with the 35
requirements adopted by the Commissioner of Financial 36
Institutions. 37
Sec. 45. 1. The Commissioner of Financial Institutions 38
may require a merchant acquirer limited purpose bank to provide 39
to the Commissioner an irrevocable letter of credit made payable 40
to the Commissioner for the benefit of merchants in the event of 41
the bankruptcy, receivership or inso lvency of the merchant bank. 42
Any letter of credit required pursuant to this section must be: 43
(a) In a form satisfactory to the Commissioner; 44
(b) For a term of not less than 1 year; and 45

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(c) Issued by a financial institution authorized to do business 1
in this State that is approved by the Commissioner. 2
2. The Commissioner of Financial Institutions may require a 3
holding company of a merchant bank to provide to the 4
Commissioner an unlimited, unconditional and continuous 5
guaranty by the holding company to maintain in the merchant 6
bank at least the minimum levels of capital required by the 7
provisions of this chapter and the regulations adopted pursuant 8
thereto. The Commissioner may require any portion of the 9
guaranty to be secured by collateral of a type app roved by the 10
Commissioner. 11
Sec. 46. A merchant acquirer limited purpose bank shall at 12
all times maintain capital stock and paid -in surplus as required by 13
the Commissioner of Financial Institutions, but in no event in an 14
amount that is less than $3,000,000. 15
Sec. 47. 1. In addition to the main office, a merchant 16
acquirer limited purpose bank organized under this chapter may 17
establish and maintain one or more other offices within this State. 18
2. A merchant bank shall notify the Commissioner of 19
Financial Institutions in writing of any change in the location of 20
any office established and maintained pursuant to subsection 1 21
not later than 30 days after the change in the location of the 22
office. 23
Sec. 48. 1. A merchant bank shall not issue or publish, or 24
cause or permit to be issued or published, any advertisement that: 25
(a) Suggests that the merchant bank may accept deposits from 26
the general public; 27
(b) Is prese nted in a manner so as to attract depositors from 28
the general public; or 29
(c) Suggests that the merchant bank is doing or is permitted to 30
do any business which is prohibited by law to a merchant bank. 31
2. A merchant bank shall not issue, circulate or publ ish any 32
advertisement after notice in writing from the Commissioner of 33
Financial Institutions that in his or her opinion the advertisement 34
is unauthorized, false, misleading or likely to deceive the public. 35
3. A merchant bank shall not use the word “dep osit” or 36
“deposits” in any form of advertising that would be prohibited 37
under federal law. 38
4. A merchant bank that is not operated by a state agency 39
shall not: 40
(a) State in any advertisement that it is under state supervision 41
or control. 42
(b) Include in any advertisement or in any instrument used by 43
it a replica of the Great Seal of the State of Nevada. 44

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Sec. 49. 1. A merchant acquirer limited purpose bank must 1
obtain the approval of the Commissioner of Financial Institutions 2
before using or changing a business name. 3
2. A merchant bank shall not: 4
(a) Use any business name which is identical or similar to a 5
business name used by another merchant bank organized under 6
this chapter which may mislead or confuse the public. 7
(b) Use any printed forms which may mislead or confuse the 8
public. 9
Sec. 50. 1. The business and affairs of every merchant 10
acquirer limited purpose bank must be managed and controlled by 11
a board of no t less than 5 and not more than 25 directors, a 12
majority of which must not be full -time officers of the merchant 13
bank. The persons designated in the articles of incorporation are 14
the first directors. 15
2. Vacancies in the board of directors must be filled by vote of 16
the stockholders at the annual meetings or at a special meeting 17
called for that purpose. The board of directors may fill vacancies 18
occurring on the board and such appointees serve until the next 19
annual meeting of the stockholders. 20
3. The board of directors of a merchant bank may amend the 21
bylaws of the merchant bank. 22
Sec. 51. A person is not eligible to serve as a director of a 23
merchant acquirer limited purpose bank without the written 24
permission of the Co mmissioner of Financial Institutions if he or 25
she: 26
1. Has been adjudicated bankrupt or has taken the benefit of 27
any assignment for the benefit of creditors or has suffered a 28
judgment recovered against him or her for a sum of money to 29
remain unsatisfied of record or not safeguarded by a supersedeas 30
bond on appeal for a period of more than 3 months. 31
2. Is a director, officer or employee of any other unaffiliated 32
merchant bank. 33
3. Is an officer or employee of an unaffiliated commercial 34
bank in this State. 35
4. Is not an investor in the merchant bank or its holding 36
company, if applicable, owning in his or her own right or in a 37
representative capacity as an executor, administrator, guardian or 38
trustee stock in the merchant bank or its holding company, if 39
applicable, of the par value of at least $1,000. For the purpose of 40
this chapter, a person who owns stock as a joint tenant with one 41
other person shall be deemed to own, in his or her own right, one -42
half of the stock. 43

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5. Sells or hypothecates all the stock owned by him or her, or 1
so much thereof that he or she ceases to be the owner, free from 2
encumbrances, of the amount of stock required by subsection 4. 3
Sec. 52. If the Commissioner of Financial Institutions 4
notifies t he board of directors of any merchant acquirer limited 5
purpose bank, in writing, that he or she has information that any 6
director, officer or employee of the merchant bank is failing in the 7
performance of his or her duties, the board of directors shall mee t 8
and consider the matter forthwith. The Commissioner must have 9
notice of the time and place of the meeting. If the board of 10
directors finds the Commissioner’s objection to be well founded, 11
the director, officer or employee must be removed immediately. 12
Sec. 53. 1. Any director may be removed from office, if he 13
or she has become ineligible pursuant to section 52 of this act, by 14
an affirmative vote of two -thirds of the members of the board of 15
directors at any regular meeting of the board of directors or at any 16
special meeting called for that purpose. Such acti on must be 17
ratified at the next meeting of the stockholders. 18
2. No such vote upon removal of the director may be taken 19
until he or she has been advised of the reasons thereto, either oral 20
or written. If the director affected is present at the meeting, h e or 21
she shall retire after his or her statement has been submitted and 22
before the vote upon the matter of his or her removal. 23
Sec. 54. Directors and officers of a merchant acquirer 24
limited purpose bank shall discharge the duties of their respective 25
positions in good faith and with the diligence, care and skill which 26
ordinary, prudent persons would exercise under similar 27
circumstances in a similar position. 28
Sec. 55. The board of directors of a merchant acquirer 29
limited purpose bank shall elect the officers named in the bylaws 30
of the merchant bank, which officers shall serve at the pleasure of 31
the board of directors. 32
Sec. 56. 1. The board of directors of each merchant 33
acquirer limited purpose bank shall hold a regular meeting at least 34
once each quarter, at a time to be designated by it in accordance 35
with its bylaws. 36
2. Special meetings of the board of directors may be held 37
upon notice to each director suffic ient to permit his or her 38
attendance. The president or any three members of the board of 39
directors may call a meeting of the board of directors by giving 40
notice to all of the directors. 41
3. At any meeting of the board of directors, a majority of the 42
members constitutes a quorum for the transaction of business. 43
Sec. 57. Every official communication by the Commissioner 44
of Financial Institutions directed to the board of directors of a 45

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merchant acquirer limited purpose bank must be presented at the 1
next meeting of the board of directors and made a part of the 2
minutes of the meeting. 3
Sec. 58. 1. A merchant acquirer limited purpose bank shall 4
immediately notify the Commissioner of Financial Ins titutions of 5
any change or proposed change in ownership of the stock of the 6
merchant bank which would result in any person, including, 7
without limitation, a business trust, obtaining 5 percent or more of 8
the outstanding capital stock of the merchant bank. 9
2. An application must be submitted to the Commissioner of 10
Financial Institutions , pursuant to section 54 of this act, by a 11
person who acquires: 12
(a) At least 25 percent of the outstanding stock of the 13
merchant bank; or 14
(b) Any outstanding stock of a merchant bank if the change 15
will result in a change in the control of the merchant bank. 16
 Except as otherwise provided in subsection 4, the Commissioner 17
shall conduct an investigation to determine whether the character 18
and responsibility of the applicant is such as to command the 19
confidence of the community in which the main office of the 20
merchant bank is located. If the Commissioner denies 21
the application , he or she may forbid the applicant from 22
participating in the business of the merchant bank. 23
3. The merchant bank with which the applicant is affiliated 24
shall pay such a portion of the cost of the investigation as the 25
Commissioner requires. All money r eceived by the Commissioner 26
pursuant to this section must be placed in the Investigative 27
Account for Financial Institutions created by NRS 232.545. 28
4. A merchant bank may submit a written request to the 29
Commissioner to waive an investigation pursuant to subsection 2. 30
The Commissioner may grant a waiver if the applicant has 31
undergone a similar investigation by a state or federal agency in 32
connection with the licensing of or his or her employment with a 33
financial institution. 34
Sec. 59. A merchant acquirer limited purpose bank may 35
provide for pensions, retirement plans and other benefits for its 36
officers and employees, and may contribute to the cost thereof in 37
accordance with the plan adopted by its board of directors. 38
Sec. 60. The board of directors shall approve the depositary 39
or depositaries for funds of the merchant acquirer limited purpose 40
bank. 41
Sec. 61. 1. It is unlawful for an officer, director, employee 42
or capital stockholder of a merchant bank to: 43
(a) Solicit, accept or agree to accept, directly or indirectly, 44
from any person other than the merchant acquirer limited purpose 45

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- *SB438*
bank or an affiliate of the merchant bank, any gratuity, 1
compensation or other personal benefit for any action taken by the 2
merchant bank or for endeavoring to procure any such action. 3
(b) Have any interest, direct or indirect, in the purchase at less 4
than its face value of any evidence of a deposit account or other 5
indebtedness is sued by the merchant bank, excluding stock 6
certificates and junior capital notes. 7
2. A violation of the provisions of this section is a 8
misdemeanor. 9
Sec. 62. Any director or officer of a merchant acquirer 10
limited purpose bank or any other person who knowingly and 11
willingly participates in any violation of the laws of this State 12
relative to merchant banks is liable for all damage which the 13
merchant bank, its stockholders, depositors or creditors sustain in 14
consequence of such violation. 15
Sec. 63. Nothing in this chapter limits the authority of a 16
merchant acquirer limited purpose bank to indemnify and defend, 17
or to provide reimbursement for expenses of defending an action 18
to, officers, directo rs, employees, agents or other parties as such 19
authority may be provided under the laws of this State, if such 20
indemnification does not violate the limitations on indemnification 21
imposed by section 18(k) of the Federal Deposit Insurance Act, 12 22
U.S.C. § 18 28(k), and the regulations adopted by the Federal 23
Deposit Insurance Corporation pursuant thereto. 24
Sec. 64. A merchant acquirer limited purpose bank may 25
purchase or lease property for its office buildings or construct its 26
office buildings on property purchased or leased by it, if the total 27
cost of land and improvements does not exceed 70 percent of the 28
sum of the capital, surplus and reserves of the merchant bank. 29
Sec. 65. 1. A merchant acquirer limited purpose bank shall 30
not sell or issue any of its common or preferred stock until it has 31
first applied for and secured from the Commissioner of Financial 32
Institutions a license authorizing it so to do as provided in section 33
39 of this act. 34
2. Every license must recite in bold type that the issuance of 35
the license is permissive only and does not constitute a 36
recommendation or endorsement of the stock permitted to be 37
issued. 38
3. Before the sale of, or option to buy, any additional 39
authorized but unissued common or preferred stock, the merchant 40
bank must have the written approval of the Commissioner of 41
Financial Institutions. 42
4. The Commissioner of Financial Institutions may impose 43
conditions requiring the impoundment of the proceeds from the 44
sale of any stock, limiting the expense in connection with the sale 45

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and such other conditions as are reasonable and necessary or 1
advisable to ensure the disposition of the proceeds from the sale of 2
the stock in the manner and for the purposes provided in the 3
license. 4
Sec. 66. 1. The license specified in section 65 of this act 5
authorizes the company, merchant acquirer limited purpose bank 6
or corporation to whom it is issued to sell its approved securities 7
and contracts within this State for the remainder of the fiscal year 8
ending on June 30 next succeeding. Each license is renewable, 9
under like restrictions, annually thereafter. 10
2. For the issuing of any license provided for in section 65 of 11
this act and for any renewal thereof, the fee of the Commissioner 12
of Financial Institutions is $400. 13
3. The fees must accompany the license renewal application. 14
A penalty of 10 percent of the fee payable must be charged fo r 15
each month or part thereof that the fees are not paid after June 30 16
of each year. 17
4. The Commissioner of Financial Institutions shall adopt 18
regulations establishing the amount of the fees required pursuant 19
to this section. 20
Sec. 67. A merchant acquirer limited purpose bank may 21
engage in: 22
1. The following merchant acquiring activities: 23
(a) Obtaining and maintaining membership in one or more 24
payment card networks; 25
(b) Signing up and underwriting merchants to accept paym ent 26
cards branded by payment card networks; 27
(c) Providing the means to authorize valid card transactions at 28
client merchant locations; 29
(d) Facilitating the clearing and settlement of the transactions 30
through a payment card network; 31
(e) Providing access to one or more payment card networks to 32
affiliates or customers of the merchant bank or customers of 33
affiliates of the merchant bank; 34
(f) Sponsoring the participation of affiliates or customers of 35
the merchant bank or customers of affiliates of the merchant bank 36
in one or more payment networks; 37
(g) Generating statements and other reporting of information 38
for client merchants; 39
(h) Training and technical assistance for merchants, 40
including, without limitation, technical assistance involving 41
equipment which allows the merchant to record or execute 42
transactions occurring as a result of the sale of goods or services; 43
(i) Services related to the encryption of data; 44

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(j) The authorization and capture of transactions involving 1
payment cards; and 2
(k) The processing of disputes; 3
2. Settlement activities; 4
3. The accepting and holding of deposits specified in section 5
71 of this act; and 6
4. Any incidental activity approved by the Commissioner of 7
Financial Institutions pursuant to section 68 of this act. 8
Sec. 68. 1. A merchant acquirer limited purpose bank that 9
wishes to engage in an incidental activity must submit to the 10
Commissioner of Financial Institutions a request to engage in t he 11
activity. The request must include, without limitation, a 12
description of: 13
(a) The incidental activity; 14
(b) The reason that the merchant bank wishes to engage in the 15
activity; 16
(c) The safeguards or protections which will be employed to 17
ensure the continuing sound operation of the merchant bank; 18
(d) The need or convenience to customers of the merchant 19
bank; 20
(e) Any legal justification required by state law; and 21
(f) The financial ability of the merchant bank to support the 22
incidental activity. 23
2. Upon receipt of a request submitted pursuant to subsection 24
1, the Commissioner of Financial Institutions may request from 25
the merchant bank any additional information the Commissioner 26
determines is necessary to evaluate the request. The merchant 27
bank sh all provide the Commissioner the information requested 28
not later than 30 days after receipt of the request from the 29
Commissioner. 30
3. Not later than 60 days after the receipt of a request 31
submitted pursuant to subsection 1, the Commissioner of 32
Financial Institutions shall approve, conditionally approve or 33
deny the request or request additional information pursuant to 34
subsection 2. If the Commissioner does not take any of those 35
actions within 60 days after the receipt of the request, the reque st 36
shall be deemed to be approved. 37
Sec. 69. 1. A merchant acquirer limited purpose bank shall 38
not engage in a merchant acquiring activity unless the activity 39
originates in the United States and the merchant with whom the 40
activity is engaged has a physical location in the United States. If 41
a merchant bank engages in any merchant acquiring activity 42
through the Internet or another electronic medium, the merchant 43
with whom the activity is engaged must have a fixed place of 44
business in the United States. 45

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2. As used in this section, “United States” includes any state 1
of the United States, th e District of Columbia, the Commonwealth 2
of Puerto Rico, Guam, American Samoa, the United States Virgin 3
Islands, the Commonwealth of the Northern Mariana Islands or 4
any territory or possession of the United States. 5
Sec. 70. 1. A merchant acquirer limited purpose bank shall 6
not engage in any activity that is not authorized by the provisions 7
of this chapter or the regulations adopted pursuant thereto. Such 8
prohibited activities include, without limitation: 9
(a) Engaging in the business of banking; 10
(b) Except as otherwise provided in section 71 of this act, the 11
accepting and holding of deposits; 12
(c) Money transmission, as defined in NRS 671.013; 13
(d) Acting as a fiduciary; 14
(e) Sponsoring automated teller machines or other cash 15
dispensing machines; 16
(f) Issuing payment cards branded by a payment card network; 17
(g) The factoring or financing of receivables of a merchant; 18
(h) Activities involving advancing money to a person; 19
(i) Soliciting, processing or making loans; and 20
(j) Self-acquiring activities. 21
2. A merchant bank that performs merchant acquiring 22
activities shall not be deemed to be engaged in self -acquiring 23
activities merely because the merchant bank imposes fees or other 24
charges to merchants related solely to the performance of 25
merchant acquiring activities. 26
3. As used in this section “self -acquiring activity” means the 27
performance of merchant acquiring activi ties or settlement 28
activities by a merchant or an affiliated entity of a merchant on its 29
own behalf for payments the merchant or the affiliated entity 30
receives for goods or services the merchant or affiliated entity 31
provides to consumers. 32
Sec. 71. 1. A merchant acquirer limited purpose bank may 33
only accept and hold deposits from a corporation that owns a 34
majority of the shares of the merchant bank. The corporation 35
shall not withdraw a deposit by check or similar means for 36
payment to a third party. 37
2. Any deposit authorized by subsection 1 must be taken at 38
the main office of the merchant bank. Any records concerning 39
such a deposit must be maintained at the main office of the 40
merchant bank. 41
3. A merchant bank shall not o perate in any manner so as to 42
attract depositors from the general public. 43

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4. A merchant bank may apply to receive deposit insurance 1
from the Federal Deposit Insurance Corporation or its successor 2
agency. 3
Sec. 72. 1. A merchant acquirer limited purpose bank shall 4
continuously maintain: 5
(a) A leverage capital ratio of not less than 10 percent; 6
(b) The following amount of payment volume capital: 7
(1) Five percent of payment volume for payment volume 8
that does not exceed $10,000,000; 9
(2) An additional 3 percent of payment volume for payment 10
volume that exceeds $10,000,000 but does not exceed $25,000,000; 11
(3) An additional 1.5 percent of payment volume for 12
payment volume that exceeds $25,000,000 but does not exceed 13
$100,000,000; 14
(4) An additional 0.75 percent of payment volume for 15
payment volume that exceeds $100,000,000 but does not exceed 16
$250,000,000; 17
(5) An additional 0.25 percent of payment volume for 18
payment volume that exceeds $250,000,000 but does not exceed $1 19
billion; 20
(6) An additional 0.15 percent of payment volume for 21
payment volume that exceeds $1 billion but does not exceed $5 22
billion; 23
(7) An additional 0.08 percent of payment volume for 24
payment volume that exceeds $5 billion but does not exceed $20 25
billion; and 26
(8) An additional 0.05 percent of payment volume for 27
payment volume that exceeds $20 billion; 28
(c) An amount of risk capital that is not less than the greater 29
of: 30
(1) An amount that is two times the average monthly 31
chargebacks in the immediately preceding 6 months; or 32
(2) An amount that is two times the average monthly 33
forecast dollar volume of chargebacks for a 6-month period; and 34
(d) The amount of capital stock and paid -in surplus required 35
by section 46 of this act. 36
2. The Commissioner of Financial Institutions may 37
determine that a merchant bank that, at any time, has less than the 38
minimum leverage capital ratio, payment volume capital, risk 39
capital or statutory capital required by subsection 1 is operating in 40
an unsafe or injurious manner. Such a merchant bank shall 41
comply with any order or action taken by the Commissioner to 42
restore the merchant bank to adequate capitalization. 43
Sec. 73. 1. A merchant acquirer limited purpose bank shall 44
deposit all merchant funds received by the bank in an account at a 45

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financial institution that is federally insured and authorized to do 1
business in this State immediately after receipt. When deposited 2
into the account, the merchant funds shall be deemed to be the 3
property of the merchant to whom the fund s are payable and must 4
remain in the account until paid over to the merchant. 5
2. A merchant bank shall maintain records with respect to the 6
account required by subsection 1 which identify individual 7
merchants and allow the total amount held in the account for each 8
individual merchant to be readily ascertained. 9
3. Any agreement required to open and maintain the account 10
required by subsection 1 and any records relating to th e account 11
must expressly provide that the account is maintained for the 12
benefit of the individual merchants of the merchant bank. 13
4. A merchant bank and its officers have a fiduciary duty to 14
preserve and account for proceeds ultimately payable to a 15
merchant and are liable for all such proceeds. 16
5. A merchant bank shall not pledge or otherwise grant a 17
security interest in merchant funds. 18
6. The provisions of this section do not prohibit a merchant 19
bank from making appropriate deductions from merchan t funds 20
for chargebacks, fees, reserves and other costs related to the 21
provisions of merchant acquiring services owed by a merchant 22
before remitting the net amount to that merchant. 23
Sec. 74. 1. Except as otherwise provided in subsection 2, a 24
merchant acquirer limited purpose bank shall not make any 25
investment. 26
2. A merchant bank may invest in: 27
(a) Obligations of, or obligations guaranteed fully as to 28
principal and interest by, the United States; 29
(b) Obligations of and guaranteed fully as to principal and 30
interest by any Federal Home Loan Bank or Federal Farm Credit 31
Bank, the Federal Home Loan Mortgage Corporation or the 32
Federal National Mortgage Association; 33
(c) An obligation of any state or any political subdivision o f a 34
state for which the interest on the obligation is exempt from 35
federal income taxation; 36
(d) Prime bankers’ acceptances; 37
(e) The units of any unit investment trust if: 38
(1) The assets of the trust are invested exclusively in the 39
type of securities de scribed in this subsection at the time the 40
investment is made; or 41
(2) The obligations held by the trust are limited to 42
obligations within one of the two top rating categories of any 43
nationally recognized statistical rating organization; 44

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(f) The shares of any mutual fund if the distributions from the 1
fund are treated for the purposes of federal income tax in the same 2
manner as the interest on the obligations in which the fund invests 3
and: 4
(1) The investments of the fund consist exclusively of the 5
type of obligations described in this subsection at the time the 6
investment is made; and 7
(2) The obligations held by the fund are limited to 8
obligations rated within one of the two top rating categories of any 9
nationally recognized statistical rating organization; 10
(g) Securities lending transactions involving the securities of 11
the type described in this subsection; 12
(h) Obligations of corporations organized under the laws of 13
this State or any other state if the: 14
(1) The corporation has a market capitali zation of at least 15
$500,000,000; and 16
(2) The obligation is rated in one of the two top rating 17
categories of any nationally recognized statistical rating 18
organization; and 19
(i) Any other investment approved by the Commissioner of 20
Financial Institutions. 21
3. A merchant bank shall, not more than 10 days after 22
making an investment authorized by this section, provide notice to 23
the Commissioner of Financial Institutions of the investment. The 24
merchant bank shall provide to the Commissioner any information 25
concerning such an investment that the Commissioner may 26
request. 27
4. Any securities in which a merchant bank invests pursuant 28
to this section must be held in book entry form and maintained at 29
a federally insured financial institution, Federal Home Loan 30
Bank or, for securities with a market value of not more than 31
$500,000, a broker -dealer insured under the Securities Investor 32
Protection Act of 1970, 15 U.S.C. § 78aaa. 33
Sec. 75. 1. Each merchant acquirer limited purpose bank 34
doing business in this State shall file with the Commissioner of 35
Financial Institutions a report containing any information or 36
other facts the Commissioner deems necessary. 37
2. The Commissioner of Financial Institutions shall adopt 38
regulations establishing the information to be reported and the 39
amount of the fee that may be imposed pursuant to this subsection. 40
3. Every merchant bank shall pay to the Commissioner of 41
Financial Institutions for supervision and examination a fee based 42
on the rate established and, if applicable, adjusted pursuant to 43
NRS 658.101. 44

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- *SB438*
Sec. 76. Each such merchant acquirer limited purpose bank 1
shall cause to be supplied to the Commissioner of Financial 2
Institutions at any time, upon his or her demand, any information 3
which he or she may require as to the condition, affairs or 4
methods of the merchant bank. 5
Sec. 77. 1. The Commissioner of Financial Institutions 6
may conduct or cause to be conducted such hearings, 7
investigations or examinations of the books and records, wherever 8
they may be, relating to the affairs of such organizations as he or 9
she may deem expedient and in aid of the proper administration of 10
the provisions of this chapter. 11
2. Except as otherwise provide d in section 83 of this act, all 12
examination reports and all information obtained by the 13
Commissioner of Financial Institutions in conducting hearings, 14
investigations or examinations under the provisions of this 15
chapter, including all related correspondence and memoranda, 16
and information obtained by the Commissioner from other state or 17
federal bank regulatory authorities with whom the Commissioner 18
has entered into agreements for the confidential sharing of such 19
information, and information obtained by the Commissioner 20
relating to the examination and supervision of any corporation 21
which is an affiliate of a merchant bank is confidential and 22
privileged information and must not be made public or otherwise 23
disclosed to any person, firm, corporation, agency, association, 24
governmental body, court or other entity. 25
3. Any information submitted by a person to the 26
Commissioner of Financial Institutions for any purpose under this 27
chapter shall not be construed as waiving, destro ying or otherwise 28
affecting any privilege such person may claim with respect to such 29
information under federal or state law as to any person or entity 30
other than the Commissioner. 31
4. In connection with the conduct of any hearing, 32
investigation or examina tion, the Commissioner of Financial 33
Institutions or other person designated by him or her to conduct it 34
may: 35
(a) Compel the attendance of any person by subpoena. 36
(b) Administer oaths. 37
(c) Examine any person under oath concerning the business 38
and conduct of affairs of any merchant bank subject to the 39
provisions of this chapter, and require the production of any 40
books, papers, records, money and securities relevant to the 41
inquiry. Any willful false swearing is perjury and is punishable as 42
such. 43

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5. The Commissioner of Financial Institutions shall conduct 1
at least once every 2 years an examination of the books and 2
records of each merchant bank licensed under this chapter. 3
Sec. 78. 1. For the purpose of discovering violation s of this 4
chapter or securing information lawfully required under this 5
chapter, the Commissioner of Financial Institutions or his or her 6
duly authorized representatives may , at any time , investigate the 7
business and examine the books, accounts, papers and records 8
used therein of any: 9
(a) Merchant acquirer limited purpose bank; 10
(b) Other person engaged in an activity regulated pursuant to 11
the provisions of this chapter; and 12
(c) Person whom the Commissioner has reasonable cause to 13
believe is violating or is about to violate any provision of this 14
chapter, whether or not the person claims to be within the 15
authority or beyond the scope of this chapter. 16
2. For the purpose of examination, the Commissioner of 17
Financial Institutions or his or her authorized rep resentatives 18
must have and be given free access to the offices and places of 19
business, files, safes and vaults of such persons. 20
3. The Commissioner of Financial Institutions may require 21
the attendance of any person and examine him or her under oath 22
regarding: 23
(a) Any transaction or business regulated pursuant to the 24
provisions of this chapter; or 25
(b) The subject matter of any audit, examination, investigation 26
or hearing. 27
Sec. 79. 1. In case of the refusal of any person to attend or 28
testify or produce any papers required by the subpoena directed to 29
be served under the provision of section 77 of this act, the 30
Commissioner of Financial Institutions may report to the district 31
court in and for the county in which the examination, hearing or 32
investigation is pending by petition, setting forth that: 33
(a) Due notice has been given of the time and place of 34
attendance of the person or the production of the books and 35
papers; 36
(b) The person has been subpoenaed in the manner prescribed 37
in this chapter; and 38
(c) The person has failed and refused to attend or produce the 39
papers required by subpoena before the Commissioner in the 40
examination, hearing or investigation named in the subpoena, or 41
has refused to answer questions propounded to him or her in the 42
course of such examination, hearing or investigation, 43

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 and asking an order of the court compelling the person to 1
attend and tes tify or produce the books or papers before the 2
Commissioner. 3
2. The court, upon petition of the Commissioner of Financial 4
Institutions, shall enter an order directing the person to appear 5
before the court at a time and place to be fixed by the court in 6
such order, the time to be not more than 10 days from the date of 7
the order, and then and there show cause why he or she has not 8
attended or testified or produced the books or papers before the 9
Commissioner. A certified copy of the order must be served upon 10
the person. If it appears to the court that the subpoena was 11
regularly issued by the Commissioner, the court shall thereupon 12
enter an order that the person appear before the Commissioner at 13
the time and place fixed in the order and testify or produce the 14
required books or papers. Upon failure to obey the order, the 15
person shall be dealt with as for contempt of court. 16
Sec. 80. 1. The Commissioner of Financial Institutions 17
may, at the time of examining a merchant acquirer limited 18
purpose bank, inspect the books, ledgers and minutes of any 19
holding company whenever, in his or her discretion, the 20
Commissioner considers it advisable to ascertain facts which may 21
relate to transactions between the holding company and the 22
affiliated merchant bank. The provisions of section 77 of this act 23
apply to the examination of such corporation. 24
2. Upon making findings to that end, t he Commissioner of 25
Financial Institutions may order the discontinuance of borrowing 26
or lending, selling or buying of assets, extending credit or 27
guaranteeing obligations of the holding company which has been 28
undertaken without the written approval of the Commissioner. 29
3. A holding company which controls a merchant bank shall 30
not impose any unreasonable supervisory fees upon the merchant 31
bank. 32
Sec. 81. 1. Whenever in connection with an examination it 33
is necessary or exped ient that the Commissioner of Financial 34
Institutions or his or her designee, or both, leave this State, there 35
must be assessed against the organization under examination a fee 36
of not more than the per diem allowance and travel expenses 37
provided for state o fficers and employees generally for each 38
person while outside the State in connection with an examination, 39
together with all actual and necessary expenses. 40
2. The fee charged must be remitted to the Commissioner of 41
Financial Institutions. The Commissione r shall adopt regulations 42
establishing the amount of the fee required pursuant to this 43
section. 44

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Sec. 82. In lieu of making any examination, the 1
Commissioner of Financial Institutions may accept any 2
examination of any merchant acquirer limited purpose bank made 3
by the Federal Deposit Insurance Corporation, or may examine 4
any such institution in conjunction with the Federal Deposit 5
Insurance Corporation. 6
Sec. 83. 1. Before disclosing or furnis hing any document, 7
report or information under this section, the Commissioner of 8
Financial Institutions must determine that such document, report 9
or information will receive protection from further disclosure 10
comparable to the protections provided by this chapter. 11
2. The Commissioner of Financial Institutions or his or her 12
agents and employees may furnish all or any part of an 13
examination report, work paper, supervisory agreement or 14
directive, order or other information obtained in the conduct of a 15
hearing, investigation or examination under the provisions of this 16
chapter to: 17
(a) An agency of the Federal Government or of another state 18
empowered to examine or supervise a merchant bank, a holding 19
company owning a merchant acquirer limited purpose bank or a 20
subsidiary of such holding company; 21
(b) An official empowered to investigate criminal charges 22
subject to legal process, valid search warrant or subpoena, 23
provided that the Commissioner may only furnish that part of any 24
document or report which is necessar y and pertinent to the 25
investigation, and the Commissioner may do this only after 26
notifying the affected merchant bank and any customer of the 27
merchant bank who is named in such part of the document or 28
report ordered to be furnished unless the official req uesting the 29
document or report first obtains a waiver of the notice requirement 30
from a court of competent jurisdiction for good cause; 31
(c) The examined merchant bank or holding company thereof; 32
(d) A receiver or liquidator appointed pursuant to this chapter; 33
or 34
(e) The court in a proceeding initiated by the Commissioner 35
concerning the merchant bank if the Commissioner first provides 36
such notice to the merchant bank as will afford the merchant bank 37
an opportunity to object or to seek a protective order. 38
3. Except as otherwise provided in subsections 4 and 5, all 39
documents, reports and information furnished by the 40
Commissioner of Financial Institutions pursuant to this section 41
remain the property of the Division of Financial Institutions, and 42
no person, a gency or authority to whom such documents, reports 43
or information are made available, or any officer, director or 44
employee thereof, may disclose any of the documents, reports or 45

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information contained therein, except in published statistical 1
material that does not disclose the affairs of any natural person or 2
corporation. 3
4. An examination report made by the Division of Financial 4
Institutions is designed for use in the supervision of a merchant 5
bank. The report shall remain the property of the Commissioner of 6
Financial Institutions and will be furnished to the merchant bank 7
solely for its confidential use. The merchant bank may disclose the 8
report or relevant portions thereof to any of its directors, officers, 9
employees, agents or affiliates as necessary an d appropriate in the 10
conduct of its affairs. Under no circumstances may the merchant 11
bank or any of its directors, officers, employees, agents or 12
affiliates disclose or make public in any manner the report or any 13
portion thereof to any person or organizati on not connected with 14
the merchant bank as officer, director, employee, attorney, auditor 15
or candidate for executive office with the merchant bank or its 16
holding company. The merchant bank may also, after execution of 17
an agreement not to disclose informati on in the report, disclose 18
the report or relevant portions thereof to a party proposing to 19
acquire or merge with the merchant bank. 20
5. Except for an examination report as provided in subsection 21
4, a merchant bank may disclose any document, report or 22
information provided by the merchant bank to the Commissioner 23
of Financial Institutions and any document, report or information 24
received by the merchant bank from the Commissioner to any of 25
its directors, officers, employees, agents or affiliates as necessary 26
and appropriate in the conduct of its affairs. 27
6. A merchant bank, a bank holding company or owning a 28
merchant bank or a subsidiary of such a holding company, does 29
not violate this section by complying with a duty to report to the 30
Securities and Exchange Commission, including, without 31
limitation, by disclosing any order of the Commissioner of 32
Financial Institutions pursuant to such a duty. 33
Sec. 84. 1. Each merchant acquirer limited purpose bank 34
shall, at least once each y ear, cause its books and accounts to be 35
audited at its own expense by a certified public accountant or firm 36
of such accountants selected by the merchant bank and approved 37
by the Commissioner of Financial Institutions. 38
2. The Commissioner of Financial Institutions may prescribe 39
the scope of the audit. 40
3. A certified copy of the audit, including the management 41
and internal control letters relating to the audit, must be furnished 42
to the Commissioner of Financial Institutions. 43
Sec. 85. Each merchant acquirer limited purpose bank shall 44
pay the assessment levied pursuant to NRS 658.055 and cooperate 45

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fully with the audits and examinations performed pursuant 1
thereto. 2
Sec. 86. The Commissioner of Financial Institutions may 3
after notice and hearing suspend or revoke the charter of any 4
merchant bank for: 5
1. Repeated failure to abide by the provisions of this chapter 6
or the regulations adopted pursuant thereto. 7
2. Failure to pay a tax as required pursuant to the provisions 8
of chapter 363A or 363C of NRS. 9
Sec. 87. 1. If the Commissioner of Financial Institutions 10
finds as the result of any examination or from any report made to 11
him or her or t o any merchant acquirer limited purpose bank 12
doing business in this State or from any report made to any of its 13
investors that the merchant bank is violating the provisions of its 14
articles of incorporation, charter, bylaws, or any law of this State, 15
or is conducting its business in an unsafe or injurious manner, he 16
or she may by an order addressed to such merchant bank direct a 17
discontinuance of such violations or unsafe or injurious practices 18
and a conformity with all the requirements of law. 19
2. If a mer chant bank does not comply with such order, the 20
Commissioner of Financial Institutions may order the corporate 21
secretary to call a special directors’ meeting to consider the matter 22
of noncompliance. 23
3. The meeting must be held no later than 60 days after 24
issuance of the order to hold the meeting, unless otherwise 25
restrained by court order or by the board. The business of the 26
meeting must be limited to the matter of noncompliance and 27
remedies therefor and the notice of such meeting must set forth in 28
detail the Commissioner of Financial Institutions’ discontinuance 29
order and order to call a directors’ meeting. 30
4. Action taken at the meeting is binding upon the officers of 31
the merchant bank. 32
Sec. 88. 1. A merchant acquirer limited purpose bank may 33
reorganize, merge or consolidate with another merchant bank, if 34
the reorganization, merger or consolidation is based upon a plan 35
which has been adopted by the board of directors and approved at 36
a regular or special stockholders ’ meeting which has been called 37
to consider the action. The approval must rest on a favorable vote 38
of a majority of the voting power of the merchant bank as 39
established by its articles. 40
2. Any such plan for reorganization, merger or consolidation 41
must be approved by the Commissioner of Financial Institutions . 42
In submitting an application for approval of any such plan, each 43
merchant bank proposing to reorganize, merge or consolidate 44

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must provide any and all information and other facts which the 1
Commissioner requires for review of the proposed transaction. 2
3. Unless its action is specifically authorized by or taken in 3
conformity with this chapter, a merchant bank may not, directly or 4
indirectly: 5
(a) Reorganize, merge or consolidate. 6
(b) Assume liability to pay deposit accounts or other liabilities 7
of any financial institution or any other organization, person or 8
entity. 9
(c) Transfer assets to any financial institution or any other 10
organization, person or entity in consideration of the transferee ’s 11
assumption of liability for any portion of the transferor ’s deposit 12
accounts, deposits or other liability. 13
(d) Acquire the assets of any financial institution or any other 14
organization, person or entity. 15
4. Each application which is made under this section mu st be 16
accompanied by a fee payment of not more than $300. The 17
responsibility for payment of the fee must be shared equally by the 18
merchant banks participating in each proposed plan. 19
5. The Commissioner of Financial Institutions shall adopt 20
regulations establishing the amount of the fee required pursuant 21
to this section. 22
Sec. 89. 1. Except as otherwise provided in this section, a 23
merchant acquirer limited purpose bank may go into voluntary 24
liquidation pursuant to the provisions of NRS 78.580 or 86.491. 25
2. If the voluntary liquidation of the merchant bank results 26
from a vote or agreement of the stockholders or members of the 27
merchant bank, a certified copy of all proceedings of the meeting 28
at which that action is take n, verified by the oath of the president 29
or a manager, must be transmitted to the Commissioner of 30
Financial Institutions for the Commissioner ’s approval. If the 31
Commissioner approves the liquidation, the Commissioner shall 32
issue to the merchant bank, under the Commissioner ’s seal, a 33
permit for that purpose. No permit may be issued by the 34
Commissioner until the Commissioner is satisfied that provision 35
has been made by the merchant bank to satisfy and pay off all 36
depositors and all creditors of the merchant b ank. If the 37
Commissioner is not satisfied, the Commissioner shall not issue a 38
permit, but the Commissioner may take possession of the 39
merchant bank, its assets and business, and liquidate the 40
merchant bank in the manner provided by this chapter. 41
3. When the Commissioner of Financial Institutions approves 42
the voluntary liquidation of a merchant bank pursuant to 43
subsection 2, the directors or managers of the merchant bank 44
shall cause to be published, in a newspaper in the city, town or 45

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county in which the main office of the merchant bank is located, a 1
notice that the merchant bank is closing its affairs and going into 2
liquidation, and that its depositors and creditors are to present 3
their claims for payment. 4
4. When any merchant bank is in the process of v oluntary 5
liquidation, it is subject to examination by the Commissioner of 6
Financial Institutions, and the merchant bank shall furnish such 7
reports, from time to time, as may be called for by the 8
Commissioner. 9
5. All unclaimed deposits and dividends remai ning in the 10
hands of the merchant bank are subject to the provisions of this 11
chapter. 12
6. Any merchant bank that is in the process of voluntary 13
liquidation may sell and transfer to any other state bank, national 14
bank or federal savings bank all or any por tion of its assets of 15
every kind upon such terms as may be agreed upon and approved 16
by the Commissioner of Financial Institutions and by a majority 17
vote of the merchant bank ’s board of directors or of its managers. 18
A certified copy of the minutes of any meeting at which that action 19
is taken, under the oath of the president or a manager, and a copy 20
of the contract of sale and transfer must be filed with the 21
Commissioner. 22
7. If a voluntary liquidation or the sale and transfer of the 23
assets of any merchant b ank is approved by the Commissioner of 24
Financial Institutions, a certified copy of that approval under seal 25
of the Commissioner, filed in the Office of the Secretary of State, 26
authorizes the cancellation of the articles of incorporation or 27
organization of the merchant bank, subject to its continued 28
existence, as provided by law. 29
Sec. 90. The provisions of sections 91 to 100, inclusive, of 30
this act apply to a merchant acquirer limited purpose bank whose 31
deposit acco unts are insured by the Federal Deposit Insurance 32
Corporation. 33
Sec. 91. 1. The Federal Deposit Insurance Corporation 34
created by the Federal Deposit Insurance Act, 12 U.S.C. § 1811, 35
may act without bond as receiver or liqui dator of any merchant 36
acquirer limited purpose bank which: 37
(a) Has been closed because of inability to meet the demands 38
of its depositors; and 39
(b) Is insured by the Federal Deposit Insurance Co rporation 40
and has been taken pos session of by the Commission er of 41
Financial Institutions pursuant to NRS 658.151. 42
2. The appropriate state authority having the right to appoint 43
a receiver or liquidator of a merchant bank may, upon such 44
closing, tender to the Federal Deposit Insurance Corporation the 45

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- *SB438*
appointment a s receiver or liquidator of such merchant bank. If 1
the Federal Deposit Insurance Corporation accepts the 2
appointment, it shall have and possess all the powers and 3
privileges provided by the laws of this State with respect to a 4
receiver or liquidator, respe ctively, of a merchant bank, its 5
depositors and other creditors, and is subject to all the duties of 6
such receiver or liquidator, except insofar as such power s, 7
privileges or duties are in conflict with the provisions of the 8
Federal Deposit Insurance Act. 9
Sec. 92. Upon the acceptance of the appointment as receiver 10
or liquidator by the Federal Deposit Insurance Corporation, the 11
possession of and title to all the assets, business and property of 12
such merchant acquirer limited purpose bank of every kind and 13
nature shall pass to and vest in the Federal Deposit Insurance 14
Corporation without the execution of any instruments of 15
conveyance, assignment, transfer or endorsement. 16
Sec. 93. Among its other powers, the Federal Deposit 17
Insurance Corporation, in the performance of its powers and 18
duties as receiver or liquidator, may, upon the order of a court of 19
record of competent jurisdiction, enforce the individual liability of 20
the stockholders or members a nd directors or managers of any 21
such merchant acquirer limited purpose bank. 22
Sec. 94. 1. When any state merchant acquirer limited 23
purpose bank has been closed as provided in section 91 of this act, 24
and the Federal Deposit Insurance Corporation pays, or makes 25
available for payment, the insured deposit liabilities of such closed 26
merchant bank, must be subrogated to all rights against such 27
closed bank of the owners of such deposits in the same manner 28
and to the same extent as the subrogation of the Federal Deposit 29
Insurance Corporation is provided for in the Federal Deposit 30
Insurance Act in the case of the closing of a national bank. 31
2. The rights of depositors and other creditors of such closed 32
merchant bank will be determined in accordance with the 33
applicable provisions of the laws of this State. 34
Sec. 95. 1. Any merchant acquirer limited pu rpose bank 35
which is, or may hereafter be, closed on account of inability to 36
meet the demands of its depositor s, by action of the Commissioner 37
of Financial Institutions , by action of a court, by action of its 38
directors or due to its insolvency or suspension, the Commissioner, 39
or the receiver or liquidator of the merchant bank with the 40
permission of the Commissioner, may borrow from the Federal 41
Deposit Insurance Corporation and furnish any part or all of the 42
assets of the merchant bank to the Federal Deposit Insurance 43
Corporation as security for a loan from it, but where the Federal 44
Deposit Insurance Corporation is acting as the receiver or 45

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- *SB438*
liquidator, the order of a court of record of competent jurisdiction 1
must be first obtained approving the loan. 2
2. The Commissioner of Financial Institutions , or the 3
receiver or liquidator of any merchant bank with the permission of 4
the Commissioner, upon the order of a court of record of 5
competent jurisdiction, may sell to the Federal Deposit Insurance 6
Corporation any part or all of the assets of the merchant bank. 7
3. The provisions of this section do not limit the power of any 8
merchant bank, the Commissioner of Financial Institutions , 9
receivers or liquidators to pledge or sell assets in accordance with 10
any other existing law. 11
Sec. 96. 1. The Commissioner of Financial Institutions 12
shall furnish to the Federal Deposit Insurance Corporation, or to 13
any official or examiner thereof, a copy of all examinations made 14
of any merchant bank and of all reports made by the merchant 15
acquirer limited purpose bank. The Commissioner shall give 16
access to and disclose to the Federal Deposit Insurance 17
Corporation, or to any official or examiner thereof, all 18
information possessed by the office of the D ivision of Financial 19
Institutions with reference to the conditions or affairs of any 20
merchant bank. 21
2. Nothing in this section limits: 22
(a) The duty of a merchant bank in this State to comply with 23
any provisions of the Federal Deposit Insurance Act, its 24
amendments or substitutions, or the requirements of the Federal 25
Deposit Insurance Corporation relative to examinations and 26
reports; or 27
(b) The powers of the Commissioner of Financial Institutions 28
with reference to examinations and reports pursuant to the 29
provisions of chapters 657 to 671, inclusive, of NRS. 30
Sec. 97. All books, papers and records of a merchant 31
acquirer limited purpose bank which has been fully liquidated 32
must be deposited by the receiver in the Office of the 33
Commissioner of Financial Institutions. 34
Sec. 98. 1. Except as otherwise provided in subsections 2 35
and 3, afte r the expiration of 10 years from the filing by the 36
Commissioner of Financial Institutions of a final report of 37
liquidation of any insolvent merchant acquirer limited purpose 38
bank, the Commissioner, with the consent of the State Board of 39
Finance, may destroy the records of any insolvent merchant bank 40
held in the Office of the Commissioner in connection with the 41
liquidation of the merchant bank. 42
2. If there are any unpaid dividends of the insolvent 43
merchant bank, the Commissioner of Financial Institutions shall 44
preserve the deposit ledger or other evidence of indebtedness of the 45

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- *SB438*
merchant bank which refers to the unpaid dividends until the 1
dividends have been paid. 2
3. The Commissioner of Financial Institutions may not 3
destroy any of the formal records of liquidation or any of the 4
records made in the Commissioner’s office with reference to the 5
liquidation of any insolvent merchant bank. 6
Sec. 99. Sections 91 to 98, inclusive, of this act, are in 7
addition to and not in substitution for any other remedy pro vided 8
by law. 9
Sec. 100. When the Commissioner of Financial Institutions 10
or the Federal Deposit Insurance Corporation has taken 11
possession of any merchant acquirer limited purpose bank, the 12
merchant bank may, with the conse nt of the Commissioner, 13
resume business upon such terms and conditions as may be 14
approved by the Commissioner and the Federal Deposit Insurance 15
Corporation. 16
Sec. 101. 1. When any merchant acquirer limited purpose 17
bank is authorized to dissolve and has taken the necessary steps to 18
effect dissolution in accordance with the laws of this State or the 19
laws of the United States, but before actual dissolution, a majority 20
of the directors or managers of the merchant bank, upon authority 21
in writing of the owners of two -thirds of its stock or two -thirds of 22
the members’ interests and with the approval of the Commissioner 23
of Financial Institutions, may execute articles of incorporation or 24
organization as provided in this chapter for the organization of a 25
new merchant bank. The articles must further set forth the 26
authority derived from the stockholders or members of the 27
merchant bank. 28
2. Upon the filing of articles of incorporation or organization 29
in the same manner as provided for the organization of new 30
merchant banks, the reorganized merchant bank is a merchant 31
bank under the laws of this State. Upon reorganization, all assets, 32
real and personal, of the dissolved merchant bank, by operation of 33
law, vest in and become the property of the reorganized merchant 34
bank, subject to all liabilities of the merchant bank existing before 35
the reorganization. 36
Sec. 102. Any person who knowingly makes, utters, 37
circulates or transmits to another, or others, any statement untrue 38
in fact, derogatory to the financial condition of any such merchant 39
acquirer limited purpose bank doing business in this State, with 40
intent to injur e the merchant bank, or who counsels, aids, 41
procures or induces another to originate, make, utter, transmit or 42
circulate any such statement or rumor, with like intent, is guilty of 43
a misdemeanor. 44

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Sec. 103. In addition to an y other remedy or penalty, a 1
merchant acquirer limited purpose bank which violates any 2
provision of this chapter or fraudulently misrepresents the terms 3
of any contract or of any securities, and thereby secures a sale 4
therefor, shall be punished by an admi nistrative fine of not more 5
than $10,000 and forfeiture and revocation of all licenses issued to 6
it under the provisions of this chapter. 7
Sec. 104. NRS 657.037 is hereby amended to read as follows: 8
657.037 “Depository institution” means any bank, savings and 9
loan association, savings bank, thrift company, credit union , 10
merchant acquirer limited purpose bank or other institution, 11
whether chartered by this State, another state or the Federal 12
Government, which: 13
1. Holds or receives deposits, savings or share accounts; 14
2. Issues certificates of deposit; or 15
3. Provides to its customers other depository accounts which 16
are subject to withdrawal by checks, drafts or other instruments or 17
by electronic means to effect payment to a third party. 18
Sec. 105. NRS 658.098 is hereby amended to read as follows: 19
658.098 1. On a quarterly or other regular basis, the 20
Commissioner shall collect an assessment pursuant to this section 21
from each: 22
(a) Check-cashing service or deferred deposit loan service that is 23
supervised pursuant to chapter 604A of NRS; 24
(b) Collection agency that is supervised pursuant to chapter 649 25
of NRS; 26
(c) Bank that is supervised pursuant to chapters 657 to 668, 27
inclusive, of NRS; 28
(d) Trust company or family trust company that is supervised 29
pursuant to chapter 669 or 669A of NRS; 30
(e) Person engaged in the business of money transmission that is 31
supervised pursuant to chapter 671 of NRS; 32
(f) Savings and loan association or saving s bank that is 33
supervised pursuant to chapter 673 of NRS; 34
(g) Person engaged in the business of lending that is supervised 35
pursuant to chapter 675 of NRS; 36
(h) Thrift company that is supervised pursuant to chapter 677 of 37
NRS; 38
(i) Credit union that is supervised pursuant to chapter 672 of 39
NRS; 40
(j) Consumer litigation funding company that is supervised 41
pursuant to chapter 604C of NRS; [and] 42
(k) Student loan servicer that is supervised pursuant to chapter 43
670B of NRS [.] ; and 44

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(l) Merchant acquirer limited purpose bank that is supervised 1
pursuant to the chapter consisting of sections 2 to 103, inclusive, 2
of this act. 3
2. The Commissioner shall determine the total amount of all 4
assessments to be collected from the entities identified in subsection 5
1, but that amount must not exce ed the amount necessary to recover 6
the cost of legal services provided by the Attorney General to the 7
Commissioner and to the Division of Financial Institutions. The 8
total amount of all assessments collected must be reduced by any 9
amounts collected by the Commissioner from an entity for the 10
recovery of the costs of legal services provided by the Attorney 11
General in a specific case. 12
3. The Commissioner shall collect from each entity identified 13
in subsection 1 an assessment that is based on: 14
(a) A portion of the total amount of all assessments as 15
determined pursuant to subsection 2, such that the assessment 16
collected from an entity identified in subsection 1 shall bear the 17
same relation to the total amount of all assessments as the total 18
assets of that enti ty bear to the total of all assets of all entities 19
identified in subsection 1; or 20
(b) Any other reasonable basis adopted by the Commissioner. 21
4. The assessment required by this section is in addition to any 22
other assessment, fee or cost required by law to be paid by an entity 23
identified in subsection 1. 24
5. Money collected by the Commissioner pursuant to this 25
section must be deposited in the State Treasury pursuant to the 26
provisions of NRS 658.091. 27
Sec. 106. NRS 659.125 is hereby amended to read as follows: 28
659.125 1. A business entity may not be organized under the 29
laws of this State with the words “bank” or “banking” as part of its 30
name except corporations or limited -liability companies subject to 31
regulation pursuant to chapters 657 to 668, inclusive, 673 or 677 of 32
NRS, or the chapter consisting of sections 2 to 103, inclusive, of 33
this act or corporations under the regulation of the Commissioner of 34
Insurance. A corporate or company name must not be amended to 35
include the words “bank” or “banking” unless the corp oration or 36
company is under such regulation. 37
2. Except as otherwise provided in subsection 3, a natural 38
person, association, firm or corporation domiciled within this State, 39
except a national bank or a banking corporation subject to regulation 40
pursuant to chapters 657 to 668, inclusive, 673 or 677 of NRS, or 41
the chapter consisting of sections 2 to 103, inclusive, of this act or 42
under the regulation of the Commissioner of Insurance, may not 43
advertise or put forth any sign as bank, banking or banker or use the 44
word “bank,” “banking” or “banker” as part of its name and title. 45

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3. A thrift company subject to the provisions of chapter 677 of 1
NRS may use the words “savings bank” as part of its name if its 2
deposits are federally insured. 3
4. Any person who violates any of the provisions of this 4
section shall be fined not more than $500 for each offense. 5
Sec. 107. NRS 52.450 is hereby amended to read as follows: 6
52.450 As used in NRS 52.450 to 52.480, inclusive, unless the 7
context otherwise requires: 8
1. “Banking or financial institution” means any bank, savings 9
and loan association, savings bank, thrift company , [or] credit union 10
or merchant acquirer limited purpose bank licensed to do business 11
as such in this State or any other state. 12
2. “Custodian of the records of a banking or financial 13
institution” means an employee or agent of a banking or financial 14
institution who has the care, custody and control of the records of 15
the banking or financial institution. 16
3. “Records of a banking or financial insti tution” means 17
memoranda, reports, records or compilations of data in any form 18
which are kept in the course of an activity which is regularly 19
conducted by a banking or financial institution. 20
Sec. 108. NRS 78.020 is hereby amended to read as follows: 21
78.020 1. Trust companies, insurance companies, mutual fire 22
insurance companies, surety companies, express companies and 23
railroad companies may be formed under this chapter, but such a 24
corporation may not: 25
(a) Transact any such business within this State until it has first 26
complied with all laws concerning or affecting the right to engage in 27
such business. 28
(b) Infringe the laws of any other state or country in which it 29
may intend to engage in business, by so incorporating unde r this 30
chapter. 31
2. No savings and loan association, savings bank, thrift 32
company , merchant acquirer limited purpose bank or corporation 33
organized for the purpose of conducting a banking business may be 34
organized under this chapter. 35
Sec. 109. NRS 78.045 is hereby amended to read as follows: 36
78.045 1. The Secretary of State shall not accept for filing 37
any articles of incorporation or any certificate of amendment of 38
articles of incorporation of any corporat ion formed pursuant to the 39
laws of this State which provides that the name of the corporation 40
contains the word “bank” or “trust,” unless: 41
(a) It appears from the articles or the certificate of amendment 42
that the corporation proposes to carry on business as a banking or 43
trust company, exclusively or in connection with its business as a 44

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bank, savings and loan association, savings bank , [or] thrift 1
company [;] or merchant acquirer limited purpose bank; and 2
(b) The articles or certificate of amendment is first approved by 3
the Commissioner of Financial Institutions. 4
2. The Secretary of State shall not accept for filing any articles 5
of incorporation or any certificate of amendment of articles of 6
incorporation of any corporation formed pursuant to the provi sions 7
of this chapter if it appears from the articles or the certificate of 8
amendment that the business to be carried on by the corporation is 9
subject to supervision by the Commissioner of Insurance or by the 10
Commissioner of Financial Institutions, unless the articles or 11
certificate of amendment is approved by the Commissioner who will 12
supervise the business of the corporation. 13
3. Except as otherwise provided in subsection 7, the Secretary 14
of State shall not accept for filing any articles of incorporation or 15
any certificate of amendment of articles of incorporation of any 16
corporation formed pursuant to the laws of this State if the name of 17
the corporation contains the words “engineer,” “engineered,” 18
“engineering,” “professional engineer,” “registered engin eer” or 19
“licensed engineer” unless: 20
(a) The State Board of Professional Engineers and Land 21
Surveyors certifies that the principals of the corporation are licensed 22
to practice engineering pursuant to the laws of this State; or 23
(b) The State Board of Profe ssional Engineers and Land 24
Surveyors certifies that the corporation is exempt from the 25
prohibitions of NRS 625.520. 26
4. Except as otherwise provided in subsection 7, the Secretary 27
of State shall not accept for filing any articles of incorporation or 28
any c ertificate of amendment of articles of incorporation of any 29
corporation formed pursuant to the laws of this State if the name of 30
the corporation contains the words “architect,” “architecture,” 31
“registered architect,” “licensed architect,” “registered inter ior 32
designer,” “registered interior design,” “residential designer,” 33
“registered residential designer,” “licensed residential designer” or 34
“residential design” unless the State Board of Architecture, Interior 35
Design and Residential Design certifies that: 36
(a) The principals of the corporation are holders of a certificate 37
of registration to practice architecture or residential design or to 38
practice as a registered interior designer, as applicable, pursuant to 39
the laws of this State; or 40
(b) The corporation i s qualified to do business in this State 41
pursuant to NRS 623.349. 42
5. The Secretary of State shall not accept for filing any articles 43
of incorporation or any certificate of amendment of articles of 44
incorporation of any corporation formed pursuant to the l aws of this 45

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- *SB438*
State which provides that the name of the corporation contains the 1
word “accountant,” “accounting,” “accountancy,” “auditor” or 2
“auditing” unless the Nevada State Board of Accountancy certifies 3
that the corporation: 4
(a) Is registered pursuant to the provisions of chapter 628 of 5
NRS; or 6
(b) Has filed with the Nevada State Board of Accountancy under 7
penalty of perjury a written statement that the corporation is not 8
engaged in the practice of accounting and is not offering to practice 9
accounting in this State. 10
6. The Secretary of State shall not accept for filing any articles 11
of incorporation or any certificate of amendment of articles of 12
incorporation of any corporation formed or existing pursuant to the 13
laws of this State which provides that t he name of the corporation 14
contains the words “common -interest community,” “community 15
association,” “master association,” “unit -owners’ association” or 16
“homeowners’ association” or if it appears in the articles of 17
incorporation or certificate of amendment that the purpose of the 18
corporation is to operate as a unit -owners’ association pursuant to 19
chapter 116 or 116B of NRS unless the Administrator of the Real 20
Estate Division of the Department of Business and Industry certifies 21
that the corporation has: 22
(a) Registered with the Ombudsman for Owners in Common -23
Interest Communities and Condominium Hotels pursuant to NRS 24
116.31158 or 116B.625; and 25
(b) Paid to the Administrator of the Real Estate Division the fees 26
required pursuant to NRS 116.31155 or 116B.620. 27
7. The provisions of subsections 3 and 4 do not apply to any 28
corporation, whose securities are publicly traded and regulated by 29
the Securities Exchange Act, which does not engage in the practice 30
of professional engineering, architecture or residential desi gn or 31
interior design, as applicable. 32
8. The Commissioner of Financial Institutions and the 33
Commissioner of Insurance may approve or disapprove the articles 34
or amendments referred to them pursuant to the provisions of this 35
section. 36
Sec. 110. NRS 239.010 is hereby amended to read as follows: 37
239.010 1. Except as otherwise provided in this section and 38
NRS 1.4683, 1.4687, 1A.110, 3.2203, 41.0397, 41.071, 49.095, 39
49.293, 62D.420, 62D.440, 62E.516, 62E.620, 62H.025, 62H.030, 40
62H.170, 62H.220, 62H.320, 75A.100, 75A.150, 76.160, 78.152, 41
80.113, 81.850, 82.183, 86.246, 86.54615, 87.515, 87.5413, 42
87A.200, 87A.580, 87A.640, 88.3355, 88.5927, 88.6067, 88A.345, 43
88A.7345, 89.045, 89.251, 90.730, 91.160, 116.757, 116A.270, 44
116B.880, 1 18B.026, 119.260, 119.265, 119.267, 119.280, 45

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- *SB438*
119A.280, 119A.653, 119A.677, 119B.370, 119B.382, 120A.640, 1
120A.690, 125.130, 125B.140, 126.141, 126.161, 126.163, 126.730, 2
127.007, 127.057, 127.130, 127.140, 127.2817, 128.090, 130.312, 3
130.712, 136.050, 159. 044, 159A.044, 164.041, 172.075, 172.245, 4
176.01334, 176.01385, 176.015, 176.0625, 176.09129, 176.156, 5
176A.630, 178.39801, 178.4715, 178.5691, 178.5717, 179.495, 6
179A.070, 179A.165, 179D.160, 180.600, 200.3771, 200.3772, 7
200.5095, 200.604, 202.3662, 205.4 651, 209.392, 209.3923, 8
209.3925, 209.419, 209.429, 209.521, 211A.140, 213.010, 213.040, 9
213.095, 213.131, 217.105, 217.110, 217.464, 217.475, 218A.350, 10
218E.625, 218F.150, 218G.130, 218G.240, 218G.350, 218G.615, 11
224.240, 226.462, 226.796, 228.270, 228.450 , 228.495, 228.570, 12
231.069, 231.1285, 231.1473, 232.1369, 233.190, 237.300, 13
239.0105, 239.0113, 239.014, 239B.026, 239B.030, 239B.040, 14
239B.050, 239C.140, 239C.210, 239C.230, 239C.250, 239C.270, 15
239C.420, 240.007, 241.020, 241.030, 241.039, 242.105, 244.2 64, 16
244.335, 247.540, 247.545, 247.550, 247.560, 250.087, 250.130, 17
250.140, 250.145, 250.150, 268.095, 268.0978, 268.490, 268.910, 18
269.174, 271A.105, 281.195, 281.805, 281A.350, 281A.680, 19
281A.685, 281A.750, 281A.755, 281A.780, 284.4068, 284.4086, 20
286.110, 286.118, 287.0438, 289.025, 289.080, 289.387, 289.830, 21
293.4855, 293.5002, 293.503, 293.504, 293.558, 293.5757, 293.870, 22
293.906, 293.908, 293.909, 293.910, 293B.135, 293D.510, 331.110, 23
332.061, 332.351, 333.333, 333.335, 338.070, 338.1379, 338.1593, 24
338.1725, 338.1727, 348.420, 349.597, 349.775, 353.205, 25
353A.049, 353A.085, 353A.100, 353C.240, 353D.250, 360.240, 26
360.247, 360.255, 360.755, 361.044, 361.2242, 361.610, 365.138, 27
366.160, 368A.180, 370.257, 370.327, 372A.080, 378.290, 378.300, 28
379.0075, 379.00 8, 379.1495, 385A.830, 385B.100, 387.626, 29
387.631, 388.1455, 388.259, 388.501, 388.503, 388.513, 388.750, 30
388A.247, 388A.249, 391.033, 391.035, 391.0365, 391.120, 31
391.925, 392.029, 392.147, 392.264, 392.271, 392.315, 392.317, 32
392.325, 392.327, 392.335, 392 .850, 393.045, 394.167, 394.16975, 33
394.1698, 394.447, 394.460, 394.465, 396.1415, 396.1425, 396.143, 34
396.159, 396.3295, 396.405, 396.525, 396.535, 396.9685, 35
398A.115, 408.3885, 408.3886, 408.3888, 408.5484, 412.153, 36
414.280, 416.070, 422.2749, 422.305, 422 A.342, 422A.350, 37
425.400, 427A.1236, 427A.872, 427A.940, 432.028, 432.205, 38
432B.175, 432B.280, 432B.290, 432B.4018, 432B.407, 432B.430, 39
432B.560, 432B.5902, 432C.140, 432C.150, 433.534, 433A.360, 40
439.4941, 439.4988, 439.5282, 439.840, 439.914, 439A.116, 41
439A.124, 439B.420, 439B.754, 439B.760, 439B.845, 440.170, 42
441A.195, 441A.220, 441A.230, 442.330, 442.395, 442.735, 43
442.774, 445A.665, 445B.570, 445B.7773, 449.209, 449.245, 44
449.4315, 449A.112, 450.140, 450B.188, 450B.805, 453.164, 45

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- *SB438*
453.720, 458.055, 458.280, 459.050, 459.3866, 459.555, 459.7056, 1
459.846, 463.120, 463.15993, 463.240, 463.3403, 463.3407, 2
463.790, 467.1005, 480.535, 480.545, 480.935, 480.940, 481.063, 3
481.091, 481.093, 482.170, 482.368, 482.5536, 483.340, 483.363, 4
483.575, 483.659, 483.800, 484A .469, 484B.830, 484B.833, 5
484E.070, 485.316, 501.344, 503.452, 522.040, 534A.031, 561.285, 6
571.160, 584.655, 587.877, 598.0964, 598.098, 598A.110, 7
598A.420, 599B.090, 603.070, 603A.210, 604A.303, 604A.710, 8
604D.500, 604D.600, 612.265, 616B.012, 616B.015, 6 16B.315, 9
616B.350, 618.341, 618.425, 622.238, 622.310, 623.131, 623A.137, 10
624.110, 624.265, 624.327, 625.425, 625A.185, 628.418, 628B.230, 11
628B.760, 629.043, 629.047, 629.069, 630.133, 630.2671, 12
630.2672, 630.2673, 630.2687, 630.30665, 630.336, 630A.327, 13
630A.555, 631.332, 631.368, 632.121, 632.125, 632.3415, 14
632.3423, 632.405, 633.283, 633.301, 633.427, 633.4715, 633.4716, 15
633.4717, 633.524, 634.055, 634.1303, 634.214, 634A.169, 16
634A.185, 634B.730, 635.111, 635.158, 636.262, 636.342, 637.085, 17
637.145, 637B .192, 637B.288, 638.087, 638.089, 639.183, 18
639.2485, 639.570, 640.075, 640.152, 640A.185, 640A.220, 19
640B.405, 640B.730, 640C.580, 640C.600, 640C.620, 640C.745, 20
640C.760, 640D.135, 640D.190, 640E.225, 640E.340, 641.090, 21
641.221, 641.2215, 641A.191, 641A.217 , 641A.262, 641B.170, 22
641B.281, 641B.282, 641C.455, 641C.760, 641D.260, 641D.320, 23
642.524, 643.189, 644A.870, 645.180, 645.625, 645A.050, 24
645A.082, 645B.060, 645B.092, 645C.220, 645C.225, 645D.130, 25
645D.135, 645G.510, 645H.320, 645H.330, 647.0945, 647.0947 , 26
648.033, 648.197, 649.065, 649.067, 652.126, 652.228, 653.900, 27
654.110, 656.105, 657A.510, 661.115, 665.130, 665.133, 669.275, 28
669.285, 669A.310, 670B.680, 671.365, 671.415, 673.450, 673.480, 29
675.380, 676A.340, 676A.370, 677.243, 678A.470, 678C.710, 30
678C.800, 679B.122, 679B.124, 679B.152, 679B.159, 679B.190, 31
679B.285, 679B.690, 680A.270, 681A.440, 681B.260, 681B.410, 32
681B.540, 683A.0873, 685A.077, 686A.289, 686B.170, 686C.306, 33
687A.060, 687A.115, 687B.404, 687C.010, 688C.230, 688C.480, 34
688C.490, 689A.696, 692A.117, 692C.190, 692C.3507, 692C.3536, 35
692C.3538, 692C.354, 692C.420, 693A.480, 693A.615, 696B.550, 36
696C.120, 703.196, 704B.325, 706.1725, 706A.230, 710.159, 37
711.600, and section 77 of this act, sections 35, 38 and 41 of 38
chapter 478, Statutes of Nevada 2011 and section 2 of chapter 391, 39
Statutes of Nevada 2013 and unless otherwise declared by law to be 40
confidential, all public bo oks and public records of a governmental 41
entity must be open at all times during office hours to inspection by 42
any person, and may be fully copied or an abstract or memorandum 43
may be prepared from those public books and public records. Any 44
such copies, abs tracts or memoranda may be used to supply the 45

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- *SB438*
general public with copies, abstracts or memoranda of the records or 1
may be used in any other way to the advantage of the governmental 2
entity or of the general public. This section does not supersede or in 3
any manner affect the federal laws governing copyrights or enlarge, 4
diminish or affect in any other manner the rights of a person in any 5
written book or record which is copyrighted pursuant to federal law. 6
2. A governmental entity may not reject a book or re cord 7
which is copyrighted solely because it is copyrighted. 8
3. A governmental entity that has legal custody or control of a 9
public book or record shall not deny a request made pursuant to 10
subsection 1 to inspect or copy or receive a copy of a public book or 11
record on the basis that the requested public book or record contains 12
information that is confidential if the governmental entity can 13
redact, delete, conceal or separate, including, without limitation, 14
electronically, the confidential information from the information 15
included in the public book or record that is not otherwise 16
confidential. 17
4. If requested, a governmental entity shall provide a copy of a 18
public record in an electronic format by means of an electronic 19
medium. Nothing in this subsection requires a governmental entity 20
to provide a copy of a public record in an electronic format or by 21
means of an electronic medium if: 22
(a) The public record: 23
(1) Was not created or prepared in an electronic format; and 24
(2) Is not available in an electronic format; or 25
(b) Providing the public record in an electronic format or by 26
means of an electronic medium would: 27
(1) Give access to proprietary software; or 28
(2) Require the production of information that is confidential 29
and that cannot be redacted, de leted, concealed or separated from 30
information that is not otherwise confidential. 31
5. An officer, employee or agent of a governmental entity who 32
has legal custody or control of a public record: 33
(a) Shall not refuse to provide a copy of that public record in the 34
medium that is requested because the officer, employee or agent has 35
already prepared or would prefer to provide the copy in a different 36
medium. 37
(b) Except as otherwise provided in NRS 239.030, shall, upon 38
request, prepare the copy of the pub lic record and shall not require 39
the person who has requested the copy to prepare the copy himself 40
or herself. 41
Sec. 111. 1. This section becomes effective upon passage 42
and approval. 43
2. Sections 1 to 110, inclusive, of this act become effective: 44

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- *SB438*
(a) Upon passage and approval for the purpose of adopting any 1
regulations and performing any other preparatory administrative 2
tasks that are necessary to carry out the provisions of this act; and 3
(b) On January 1, 2026, for all other purposes. 4

H