Bill Text: IN SB0328 | 2010 | Regular Session | Enrolled
Bill Title: Various financial institutions matters.
Spectrum: Bipartisan Bill
Status: (Passed) 2010-03-25 - Sections 191 through 209 effective 07/01/2010 [SB0328 Detail]
Download: Indiana-2010-SB0328-Enrolled.html
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in
Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the word NEW will appear in that style type in the introductory clause of each SECTION that adds a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or
AN ACT to amend the Indiana Code concerning financial institutions.
(1) A safety order under IC 22-8-1.1.
(2) Any order that:
(A) imposes a sanction on a person or terminates a legal right, duty, privilege, immunity, or other legal interest of a person;
(B) is not described in section 4 or 5 of this chapter or IC 4-21.5-4; and
(C) by statute becomes effective without a proceeding under this chapter if there is no request for a review of the order within a specified period after the order is issued or served.
(3) A notice of program reimbursement or equivalent determination or other notice regarding a hospital's reimbursement issued by the office of Medicaid policy and planning or by a contractor of the office of Medicaid policy and planning regarding a hospital's year end cost settlement.
(4) A determination of audit findings or an equivalent determination by the office of Medicaid policy and planning or by a contractor of the office of Medicaid policy and planning arising from a Medicaid postpayment or concurrent audit of a hospital's Medicaid claims.
(5) A license revocation under:
(A) IC 24-4.4-2;
(b) When an agency issues an order described by subsection (a), the agency shall give notice to the following persons:
(1) Each person to whom the order is specifically directed.
(2) Each person to whom a law requires notice to be given.
A person who is entitled to notice under this subsection is not a party to any proceeding resulting from the grant of a petition for review under section 7 of this chapter unless the person is designated as a party in the record of the proceeding.
(c) The notice must include the following:
(1) A brief description of the order.
(2) A brief explanation of the available procedures and the time limit for seeking administrative review of the order under section 7 of this chapter.
(3) Any other information required by law.
(d) An order described in subsection (a) is effective fifteen (15) days after the order is served, unless a statute other than this article specifies a different date or the agency specifies a later date in its order. This subsection does not preclude an agency from issuing, under IC 4-21.5-4, an emergency or other temporary order concerning the subject of an order described in subsection (a).
(e) If a petition for review of an order described in subsection (a) is filed within the period set by section 7 of this chapter and a petition for stay of effectiveness of the order is filed by a party or another person who has a pending petition for intervention in the proceeding, an administrative law judge shall, as soon as practicable, conduct a preliminary hearing to determine whether the order should be stayed in whole or in part. The burden of proof in the preliminary hearing is on the person seeking the stay. The administrative law judge may stay the order in whole or in part. The order concerning the stay may be issued after an order described in subsection (a) becomes effective. The resulting order concerning the stay shall be served on the parties and any person who has a pending petition for intervention in the proceeding. It must include a statement of the facts and law on which it is based.
SECTION 1, AS AMENDED BY P.L.160-2009, SECTION 1, AND
AS AMENDED BY P.L.177-2009, SECTION 1, IS CORRECTED
AND AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1,
2010]: Sec. 37.1. (a) This section applies to a rulemaking action
resulting in any of the following rules:
(1) An order adopted by the commissioner of the Indiana
department of transportation under IC 9-20-1-3(d) or
IC 9-21-4-7(a) and designated by the commissioner as an
emergency rule.
(2) An action taken by the director of the department of natural
resources under IC 14-22-2-6(d) or IC 14-22-6-13.
(3) An emergency temporary standard adopted by the
occupational safety standards commission under
IC 22-8-1.1-16.1.
(4) An emergency rule adopted by the solid waste management
board under IC 13-22-2-3 and classifying a waste as hazardous.
(5) A rule, other than a rule described in subdivision (6), adopted
by the department of financial institutions under IC 24-4.5-6-107
and declared necessary to meet an emergency.
(6) A rule required under IC 24-4.5-1-106 that is adopted by the
department of financial institutions and declared necessary to
meet an emergency under IC 24-4.5-6-107.
(7) A rule adopted by the Indiana utility regulatory commission to
address an emergency under IC 8-1-2-113.
(8) An emergency rule adopted by the state lottery commission
under IC 4-30-3-9.
(9) A rule adopted under IC 16-19-3-5 or IC 16-41-2-1 that the
executive board of the state department of health declares is
necessary to meet an emergency.
(10) An emergency rule adopted by the Indiana finance authority
under IC 8-21-12.
(11) An emergency rule adopted by the insurance commissioner
under IC 27-1-23-7.
(12) An emergency rule adopted by the Indiana horse racing
commission under IC 4-31-3-9.
(13) An emergency rule adopted by the air pollution control
board, the solid waste management board, or the water pollution
control board under IC 13-15-4-10(4) or to comply with a
deadline required by or other date provided by federal law,
provided:
(A) the variance procedures are included in the rules; and
(B) permits or licenses granted during the period the
emergency rule is in effect are reviewed after the emergency
rule expires.
(14) An emergency rule adopted by the Indiana election
commission under IC 3-6-4.1-14.
(15) An emergency rule adopted by the department of natural
resources under IC 14-10-2-5.
(16) An emergency rule adopted by the Indiana gaming
commission under IC 4-32.2-3-3(b), IC 4-33-4-2, IC 4-33-4-3,
IC 4-33-4-14, or IC 4-35-4-2.
(17) An emergency rule adopted by the alcohol and tobacco
commission under IC 7.1-3-17.5, IC 7.1-3-17.7, or
IC 7.1-3-20-24.4.
(18) An emergency rule adopted by the department of financial
institutions under IC 28-15-11.
(19) An emergency rule adopted by the office of the secretary of
family and social services under IC 12-8-1-12.
(20) An emergency rule adopted by the office of the children's
health insurance program under IC 12-17.6-2-11.
(21) An emergency rule adopted by the office of Medicaid policy
and planning under IC 12-15-41-15.
(22) An emergency rule adopted by the Indiana state board of
animal health under IC 15-17-10-9.
(23) An emergency rule adopted by the board of directors of the
Indiana education savings authority under IC 21-9-4-7.
(24) An emergency rule adopted by the Indiana board of tax
review under IC 6-1.1-4-34 (repealed).
(25) An emergency rule adopted by the department of local
government finance under IC 6-1.1-4-33 (repealed).
(26) An emergency rule adopted by the boiler and pressure vessel
rules board under IC 22-13-2-8(c).
(27) An emergency rule adopted by the Indiana board of tax
review under IC 6-1.1-4-37(l) (repealed) or an emergency rule
adopted by the department of local government finance under
IC 6-1.1-4-36(j) (repealed) or IC 6-1.1-22.5-20.
(28) An emergency rule adopted by the board of the Indiana
economic development corporation under IC 5-28-5-8.
(29) A rule adopted by the department of financial institutions
under IC 34-55-10-2.5.
(30) A rule adopted by the Indiana finance authority:
(A) under IC 8-15.5-7 approving user fees (as defined in
IC 8-15.5-2-10) provided for in a public-private agreement
under IC 8-15.5;
(B) under IC 8-15-2-17.2(a)(10):
(i) establishing enforcement procedures; and
(ii) making assessments for failure to pay required tolls;
(C) under IC 8-15-2-14(a)(3) authorizing the use of and establishing procedures for the implementation of the collection of user fees by electronic or other nonmanual means; or
(D) to make other changes to existing rules related to a toll road project to accommodate the provisions of a public-private agreement under IC 8-15.5.
(31) An emergency rule adopted by the board of the Indiana health informatics corporation under IC 5-31-5-8.
(32) An emergency rule adopted by the state athletic commission under IC 25-9-1-4.5.
(35) A rule adopted by the department of financial institutions under IC 24-4.4-1-101 and determined necessary to meet an emergency.
(b) The following do not apply to rules described in subsection (a):
(1) Sections 24 through 36 of this chapter.
(2) IC 13-14-9.
(c) After a rule described in subsection (a) has been adopted by the agency, the agency shall submit the rule to the publisher for the assignment of a document control number. The agency shall submit the rule in the form required by section 20 of this chapter and with the documents required by section 21 of this chapter. The publisher shall determine the format of the rule and other documents to be submitted under this subsection.
(d) After the document control number has been assigned, the agency shall submit the rule to the publisher for filing. The agency shall submit the rule in the form required by section 20 of this chapter and with the documents required by section 21 of this chapter. The publisher shall determine the format of the rule and other documents to be submitted under this subsection.
(e) Subject to section 39 of this chapter, the publisher shall:
(1) accept the rule for filing; and
(2) electronically record the date and time that the rule is accepted.
(f) A rule described in subsection (a) takes effect on the latest of the following dates:
(1) The effective date of the statute delegating authority to the agency to adopt the rule.
(2) The date and time that the rule is accepted for filing under subsection (e).
(3) The effective date stated by the adopting agency in the rule.
(4) The date of compliance with every requirement established by law as a prerequisite to the adoption or effectiveness of the rule.
(g) Subject to subsection (h), IC 14-10-2-5, IC 14-22-2-6, IC 22-8-1.1-16.1, and IC 22-13-2-8(c), and except as provided in subsections (j), (k), and (l), a rule adopted under this section expires not later than ninety (90) days after the rule is accepted for filing under subsection (e). Except for a rule adopted under subsection (a)(13), (a)(24), (a)(25), or (a)(27), the rule may be extended by adopting another rule under this section, but only for one (1) extension period. The extension period for a rule adopted under subsection (a)(28) may not exceed the period for which the original rule was in effect. A rule adopted under subsection (a)(13) may be extended for two (2) extension periods. Subject to subsection (j), a rule adopted under subsection (a)(24), (a)(25), or (a)(27) may be extended for an unlimited number of extension periods. Except for a rule adopted under subsection (a)(13), for a rule adopted under this section to be effective after one (1) extension period, the rule must be adopted under:
(1) sections 24 through 36 of this chapter; or
(2) IC 13-14-9;
as applicable.
(h) A rule described in subsection (a)(8), (a)(12), or (a)(29) expires on the earlier of the following dates:
(1) The expiration date stated by the adopting agency in the rule.
(2) The date that the rule is amended or repealed by a later rule adopted under sections 24 through 36 of this chapter or this section.
(i) This section may not be used to readopt a rule under IC 4-22-2.5.
(j) A rule described in subsection (a)(24) or (a)(25) expires not later than January 1, 2006.
(k) A rule described in subsection (a)(28) expires on the expiration date stated by the board of the Indiana economic development corporation in the rule.
(l) A rule described in subsection (a)(30) expires on the expiration date stated by the Indiana finance authority in the rule.
(m) A rule described in subsection (a)(5) or (a)(6) expires on the
date the department is next required to issue a rule under the statute
authorizing or requiring the rule.
(a) "Person" means one (1) or more individuals, partnerships, associations, organizations, limited liability companies, corporations, labor organizations, cooperatives, legal representatives, trustees, trustees in bankruptcy, receivers, and other organized groups of persons.
(b) "Commission" means the civil rights commission created under section 4 of this chapter.
(c) "Director" means the director of the civil rights commission.
(d) "Deputy director" means the deputy director of the civil rights commission.
(e) "Commission attorney" means the deputy attorney general, such assistants of the attorney general as may be assigned to the commission, or such other attorney as may be engaged by the commission.
(f) "Consent agreement" means a formal agreement entered into in lieu of adjudication.
(g) "Affirmative action" means those acts that the commission determines necessary to assure compliance with the Indiana civil rights law.
(h) "Employer" means the state or any political or civil subdivision thereof and any person employing six (6) or more persons within the state, except that the term "employer" does not include:
(1) any nonprofit corporation or association organized exclusively for fraternal or religious purposes;
(2) any school, educational, or charitable religious institution owned or conducted by or affiliated with a church or religious institution; or
(3) any exclusively social club, corporation, or association that is not organized for profit.
(i) "Employee" means any person employed by another for wages or salary. However, the term does not include any individual employed:
(1) by
(2) in the domestic service of any person.
(j) "Labor organization" means any organization that exists for the purpose in whole or in part of collective bargaining or of dealing with employers concerning grievances, terms, or conditions of employment or for other mutual aid or protection in relation to employment.
(k) "Employment agency" means any person undertaking with or
without compensation to procure, recruit, refer, or place employees.
(l) "Discriminatory practice" means:
(1) the exclusion of a person from equal opportunities because of
race, religion, color, sex, disability, national origin, or ancestry;
(2) a system that excludes persons from equal opportunities
because of race, religion, color, sex, disability, national origin, or
ancestry;
(3) the promotion of racial segregation or separation in any
manner, including but not limited to the inducing of or the
attempting to induce for profit any person to sell or rent any
dwelling by representations regarding the entry or prospective
entry in the neighborhood of a person or persons of a particular
race, religion, color, sex, disability, national origin, or ancestry;
or
(4) a violation of IC 22-9-5 that occurs after July 25, 1992, and is
committed by a covered entity (as defined in IC 22-9-5-4).
Every discriminatory practice relating to the acquisition or sale of real
estate, education, public accommodations, employment, or the
extending of credit (as defined in IC 24-4.5-1-301) IC 24-4.5-1-301.5)
shall be considered unlawful unless it is specifically exempted by this
chapter.
(m) "Public accommodation" means any establishment that caters
or offers its services or facilities or goods to the general public.
(n) "Complainant" means:
(1) any individual charging on his the individual's own behalf to
have been personally aggrieved by a discriminatory practice; or
(2) the director or deputy director of the commission charging that
a discriminatory practice was committed against a person other
than himself or a class of people, in order to vindicate the public
policy of the state (as defined in section 2 of this chapter).
(o) "Complaint" means any written grievance that is:
(1) sufficiently complete and filed by a complainant with the
commission; or
(2) filed by a complainant as a civil action in the circuit or
superior court having jurisdiction in the county in which the
alleged discriminatory practice occurred.
The original of any complaint filed under subdivision (1) shall be
signed and verified by the complainant.
(p) "Sufficiently complete" refers to a complaint that includes:
(1) the full name and address of the complainant;
(2) the name and address of the respondent against whom the
complaint is made;
(3) the alleged discriminatory practice and a statement of particulars thereof;
(4) the date or dates and places of the alleged discriminatory practice and if the alleged discriminatory practice is of a continuing nature the dates between which continuing acts of discrimination are alleged to have occurred; and
(5) a statement as to any other action, civil or criminal, instituted in any other form based upon the same grievance alleged in the complaint, together with a statement as to the status or disposition of the other action.
No complaint shall be valid unless filed within one hundred eighty (180) days from the date of the occurrence of the alleged discriminatory practice.
(q) "Sex" as it applies to segregation or separation in this chapter applies to all types of employment, education, public accommodations, and housing. However:
(1) it shall not be a discriminatory practice to maintain separate restrooms;
(2) it shall not be an unlawful employment practice for an employer to hire and employ employees, for an employment agency to classify or refer for employment any individual, for a labor organization to classify its membership or to classify or refer for employment any individual, or for an employer, labor organization, or joint labor management committee controlling apprenticeship or other training or retraining programs to admit or employ any other individual in any program on the basis of sex in those certain instances where sex is a bona fide occupational qualification reasonably necessary to the normal operation of that particular business or enterprise; and
(3) it shall not be a discriminatory practice for a private or religious educational institution to continue to maintain and enforce a policy of admitting students of one (1) sex only.
(r) "Disabled" or "disability" means the physical or mental condition of a person that constitutes a substantial disability. In reference to employment, under this chapter, "disabled or disability" also means the physical or mental condition of a person that constitutes a substantial disability unrelated to the person's ability to engage in a particular occupation.
person to engage in the loan brokerage business.
(b) As used in this chapter, "licensee" means a person that is issued
a license under this chapter.
(c) As used in this chapter, "loan broker" means any person who, in
return for any consideration from any source procures, attempts to
procure, or assists in procuring, a residential mortgage loan from a
third party or any other person, whether or not the person seeking the
loan actually obtains the loan. "Loan broker" does not include:
(1) any supervised financial organization (as defined in
IC 24-4.5-1-301(20)), IC 26-1-4-102.5), including a bank,
savings bank, trust company, savings association, or credit union;
(2) any other financial institution that is:
(A) regulated by any agency of the United States or any state;
and
(B) regularly actively engaged in the business of making
consumer loans that are not secured by real estate or taking
assignment of consumer sales contracts that are not secured by
real estate;
(3) any insurance company;
(4) any person arranging financing for the sale of the person's
product; or
(5) a creditor that is licensed under IC 24-4.4-2-402.
(d) As used in this chapter, "loan brokerage business" means a
person acting as a loan broker.
(e) As used in this chapter, "mortgage loan origination activities"
means performing any of the following activities for compensation or
gain in connection with a residential mortgage loan:
(1) Receiving or recording a borrower's or potential borrower's
residential mortgage loan application information in any form for
use in a credit decision by a creditor.
(2) Offering to negotiate or negotiating terms of a residential
mortgage loan.
(f) As used in this chapter, "borrower's residential mortgage loan
application information" means the address of the proposed residential
real property to be mortgaged and borrower's essential personal and
financial information necessary for an informed credit decision to be
made on the borrower's mortgage loan application.
(g) As used in this chapter, "mortgage loan originator" means an
individual engaged in mortgage loan origination activities. The term
does not include a person who:
(1) performs purely administrative or clerical tasks on behalf of
a mortgage loan originator or acts as a loan processor or
underwriter;
(2) performs only real estate brokerage activities and is licensed
in accordance with IC 25-34.1 or the applicable laws of another
state, unless the person is compensated by a creditor, a loan
broker, a mortgage loan originator, or any agent of a creditor, a
loan broker, or a mortgage loan originator; or
(3) is involved only in extensions of credit relating to time share
plans (as defined in 11 U.S.C. 101(53D)).
(h) As used in this chapter, "mortgage loan originator license"
means a license issued by the commissioner authorizing an individual
to act as a mortgage loan originator on behalf of a loan broker licensee.
(i) As used in this chapter, "person" means an individual, a
partnership, a trust, a corporation, a limited liability company, a limited
liability partnership, a sole proprietorship, a joint venture, a joint stock
company, or another group or entity, however organized.
(j) As used in this chapter, "ultimate equitable owner" means a
person who, directly or indirectly, owns or controls ten percent (10%)
or more of the equity interest in a loan broker licensed or required to be
licensed under this chapter, regardless of whether the person owns or
controls the equity interest through one (1) or more other persons or
one (1) or more proxies, powers of attorney, or variances.
(k) As used in this chapter, "principal manager" means an individual
who:
(1) has at least three (3) years of experience:
(A) as a mortgage loan originator; or
(B) in financial services;
that is acceptable to the commissioner; and
(2) is principally responsible for the supervision and management
of the employees and business affairs of a loan broker licensee.
(l) As used in this chapter, "principal manager license" means a
license issued by the commissioner authorizing an individual to act as:
(1) a principal manager; and
(2) a mortgage loan originator;
on behalf of a loan broker licensee.
(m) As used in this chapter, "bona fide third party fee", with respect
to a residential mortgage loan, includes any of the following:
(1) Fees for real estate appraisals. However, if the residential
mortgage loan is governed by Title XI of the Financial Institutions
Reform, Recovery, and Enforcement Act (12 U.S.C. 3331 through
3352), the fee for an appraisal performed in connection with the
loan is not a bona fide third party fee unless the appraisal is
performed by a person that is licensed or certified under
IC 25-34.1-3-8.
(2) Fees for title examination, abstract of title, title insurance,
property surveys, or similar purposes.
(3) Notary and credit report fees.
(4) Fees for the services provided by a loan broker in procuring
possible business for a creditor if the fees are paid by the creditor.
(n) As used in this chapter, "branch office" means any fixed physical
location from which a loan broker licensee holds itself out as engaging
in the loan brokerage business.
(o) As used in this chapter, "loan processor or underwriter" means
an individual who:
(1) is employed by a loan broker licensee and acts at the direction
of, and subject to the supervision of, the loan broker licensee or
a licensed principal manager employed by the loan broker
licensee; and
(2) performs solely clerical or support duties on behalf of the loan
broker licensee, including any of the following activities with
respect to a residential mortgage loan application received by the
loan broker licensee:
(A) The receipt, collection, distribution, and analysis of
information commonly used in the processing or underwriting
of a residential mortgage loan.
(B) Communicating with a borrower or potential borrower to
obtain the information necessary for the processing or
underwriting of a residential mortgage loan, to the extent that
the communication does not include:
(i) offering or negotiating loan rates or terms; or
(ii) counseling borrowers or potential borrowers about
residential mortgage loan rates or terms.
(p) As used in this chapter, "real estate brokerage activity" means
any activity that involves offering or providing real estate brokerage
services to the public, including any of the following:
(1) Acting as a real estate broker or salesperson for a buyer, seller,
lessor, or lessee of real property.
(2) Bringing together parties interested in the sale, lease, or
exchange of real property.
(3) Negotiating, on behalf of any party, any part of a contract
concerning the sale, lease, or exchange of real property, other than
in connection with obtaining or providing financing for the
transaction.
(4) Engaging in any activity for which the person performing the
activity is required to be licensed under IC 25-34.1 or the
applicable laws of another state.
(5) Offering to engage in any activity, or to act in any capacity
with respect to any activity, described in subdivisions (1) through
(4).
(q) As used in this chapter, "registered mortgage loan originator"
means a mortgage loan originator who:
(1) is an employee of:
(A) a depository institution;
(B) a subsidiary that is:
(i) owned and controlled by a depository institution; and
(ii) regulated by a federal financial institution regulatory
agency (as defined in 12 U.S.C. 3350(6)); or
(C) an institution regulated by the Farm Credit Administration;
and
(2) is registered with and maintains a unique identifier with the
Nationwide Mortgage Licensing System and Registry.
(r) As used in this chapter, "residential mortgage loan" means a loan
that is secured by a mortgage, deed of trust, or other consensual
security interest on real estate in Indiana on which there is located or
intended to be constructed a dwelling (as defined in the federal Truth
in Lending Act (15 U.S.C. 1602(v)) that is or will be used primarily for
personal, family, or household purposes.
(s) As used in this chapter, "personal information" includes any of
the following:
(1) An individual's first and last names or first initial and last
name.
(2) Any of the following data elements:
(A) A Social Security number.
(B) A driver's license number.
(C) A state identification card number.
(D) A credit card number.
(E) A financial account number or debit card number in
combination with a security code, password, or access code
that would permit access to the person's account.
(3) With respect to an individual, any of the following:
(A) Address.
(B) Telephone number.
(C) Information concerning the individual's:
(i) income or other compensation;
(ii) credit history;
(iii) credit score;
(iv) assets;
(v) liabilities; or
(vi) employment history.
(t) As used in this chapter, personal information is "encrypted" if the personal information:
(1) has been transformed through the use of an algorithmic process into a form in which there is a low probability of assigning meaning without use of a confidential process or key; or
(2) is secured by another method that renders the personal information unreadable or unusable.
(u) As used in this chapter, personal information is "redacted" if the personal information has been altered or truncated so that not more than the last four (4) digits of:
(1) a Social Security number;
(2) a driver's license number;
(3) a state identification number; or
(4) an account number;
are accessible as part of the personal information.
(v) As used in this chapter, "depository institution" has the meaning set forth in the Federal Deposit Insurance Act (12 U.S.C. 1813(c)) and includes any credit union.
(w) As used in this chapter, "state licensed mortgage loan originator" means any individual who:
(1) is a mortgage loan originator;
(2) is not an employee of:
(A) a depository institution;
(B) a subsidiary that is:
(i) owned and controlled by a depository institution; and
(ii) regulated by a federal financial institution regulatory agency (as defined in 12 U.S.C. 3350(6)); or
(C) an institution regulated by the Farm Credit Administration;
(3) is licensed by a state or by the Secretary of the United States Department of Housing and Urban Development under Section 1508 of the S.A.F.E. Mortgage Licensing Act of 2008 (Title V of P.L.110-289); and
(4) is registered as a mortgage loan originator with, and maintains a unique identifier through, the Nationwide Mortgage Licensing System and Registry.
(x) As used in this chapter, "unique identifier" means a number or other identifier that:
(1) permanently identifies a mortgage loan originator; and
(2) is assigned by protocols established by the Nationwide
Mortgage Licensing System and Registry and the federal financial
institution regulatory agencies to facilitate:
(A) the electronic tracking of mortgage loan originators; and
(B) the uniform identification of, and public access to, the
employment history of and the publicly adjudicated
disciplinary and enforcement actions against mortgage loan
originators.
(2) The underlying purposes and policies of this article are:
(a) to permit and encourage the development of fair and economically sound first lien mortgage lending practices; and
(b) to conform the regulation of first lien mortgage lending practices to applicable state and federal laws, rules, and regulations.
(3) A reference to a requirement imposed by this article includes reference to a related rule of the department adopted under this article.
(4) A reference to a federal law in this article is a reference to the law in effect December 31,
(1) Extensions of credit to government or governmental agencies or instrumentalities.
(2) A first lien mortgage transaction in which the debt is incurred primarily for a purpose other than a personal, family, or household purpose.
(3) An extension of credit primarily for a business, a commercial, or an agricultural purpose.
(4) Except for IC 24-4.4-2-401(2), IC 24-4.4-2-402.3, IC 24-4.4-2-405(4), and IC 24-4.4-2-405(5), a first lien mortgage transaction made:
(a) in compliance with the requirements of; and
(b) by a community development corporation (as defined in IC 4-4-28-2) acting as a subrecipient of funds from;
the Indiana housing and community development authority established by IC 5-20-1-3.
operating subsidiary is regulated by the chartering authority of the
supervised financial organization.
(5) Except for IC 24-4.4-2-401(2), IC 24-4.4-2-402.3,
IC 24-4.4-2-405(4), and IC 24-4.4-2-405(5), a first lien
mortgage transaction made by an entity that exclusively uses
funds provided by the United States Department of Housing
and Urban Development under Title 1 of the federal Housing
and Community Development Act of 1974, Public Law 93-383,
as amended (42 U.S.C. 5301 et seq.).
(6) An extension of credit originated by:
(a) a depository institution;
(b) subsidiaries that are:
(i) owned and controlled by a depository institution; and
(ii) regulated by a federal banking agency; or
(c) an institution regulated by the Farm Credit
Administration.
(7) Except for IC 24-4.4-2-401(2), IC 24-4.4-2-402.3,
IC 24-4.4-2-405(4), and IC 24-4.4-2-405(5), a credit union
service organization that is majority owned, directly or indirectly,
by one (1) or more credit unions.
(8) A first lien mortgage transaction originated by a
registered mortgage loan originator, when acting for an entity
described in subsection (6). However, a privately insured state
chartered credit union shall comply with the system of
mortgage loan originator registration developed by the
Federal Financial Institutions Examinations Council under
Section 1507 of the federal Safe and Fair Enforcement for
Mortgage Licensing Act of 2008 (SAFE).
(9) An individual who offers or negotiates terms of a mortgage
transaction with or on behalf of an immediate family member
of the individual.
(10) An individual who offers or negotiates terms of a
mortgage transaction secured by a dwelling that served as the
individual's residence.
(11) Unless the attorney is compensated by:
(a) a lender;
(b) a mortgage broker;
(c) another mortgage loan originator; or
(d) any agent of the lender, mortgage broker, or other
mortgage loan originator described in clauses (a) through
(c);
a licensed attorney who negotiates the terms of a mortgage
transaction on behalf of a client as an ancillary matter to the
attorney's representation of the client.
(8) (12) Agencies, instrumentalities, and government owned
corporations of the United States, including United States
government sponsored enterprises.
(a) IC 23-2-5-9.
(b) IC 23-2-5-9.1.
(c) IC 23-2-5-15.
(d) IC 23-2-5-16.
(e) IC 23-2-5-17.
(f) IC 23-2-5-18.
(g) IC 23-2-5-18.5.
(h) IC 23-2-5-20.
(i) IC 23-2-5-23, except for IC 23-2-5-23(2)(B).
(j) IC 23-2-5-24.
(2) Loan broker business transactions engaged in by persons licensed or required to be licensed under this article are subject to examination by the department and to the examination fees described in IC 24-4.4-2-402(7)(c). The department may cooperate with the securities division of the office of the secretary of state in the department's examination of loan broker business transactions and may use the securities division's examiners to conduct examinations.
throughout this article:
(1) "Affiliate", with respect to any person subject to this
article, means a person that, directly or indirectly, through
one (1) or more intermediaries:
(a) controls;
(b) is controlled by; or
(c) is under common control with;
the person subject to this article.
(2) "Agreement" means the bargain of the parties in fact as
found in the parties' language or by implication from other
circumstances, including course of dealing or usage of trade
or course of performance.
(3) "Agricultural products" includes agricultural,
horticultural, viticultural, dairy products, livestock, wildlife,
poultry, bees, forest products, fish and shellfish, any products
raised or produced on farms, and any products processed or
manufactured from products raised or produced on farms.
(4) "Agricultural purpose" means a purpose related to the
production, harvest, exhibition, marketing, transportation,
processing, or manufacture of agricultural products by a
natural person who cultivates, plants, propagates, or nurtures
the agricultural products.
(5) "Consumer credit sale" is a sale of goods, services, or an
interest in land in which:
(a) credit is granted by a person who engages as a seller in
credit transactions of the same kind;
(b) the buyer is a person other than an organization;
(c) the goods, services, or interest in land are purchased
primarily for a personal, family, or household purpose;
(d) either the debt is payable in installments or a finance
charge is made; and
(e) with respect to a sale of goods or services, either the
amount financed does not exceed fifty thousand dollars
($50,000) or the debt is secured by personal property used
or expected to be used as the principal dwelling of the
buyer.
(1) (6) "Credit" means the right granted by a creditor to a debtor
to defer payment of debt or to incur debt and defer its payment.
(2) (7) "Creditor" means a person:
(a) that regularly engages in the extension of first lien
mortgage transactions that are subject to a credit service
charge or loan finance charge, as applicable, or are payable by
written agreement in more than four (4) installments (not
including a down payment); and
(b) to which the obligation is initially payable, either on the
face of the note or contract, or by agreement if there is not a
note or contract.
The term does not include a person described in subsection
(13)(a) 33(a) in a tablefunded transaction. A creditor may be an
individual, a limited liability company, a sole proprietorship,
a partnership, a trust, a joint venture, a corporation, an
unincorporated organization, or other form of entity, however
organized.
(3) (8) "Department" refers to the members of the department of
financial institutions.
(9) "Depository institution" has the meaning set forth in the
Federal Deposit Insurance Act (12 U.S.C. 1813(c)) and
includes any credit union.
(4) (10) "Director" refers to the director of the department of
financial institutions or the director's designee.
(5) (11) "Dwelling" means a residential structure that contains
one (1) to four (4) units, regardless of whether the structure is
attached to real property. The term includes an individual:
(a) condominium unit;
(b) cooperative unit;
(c) mobile home; or
(d) trailer;
that is used as a residence.
(12) "Employee" means an individual who is paid wages or
other compensation by an employer required under federal
income tax law to file Form W-2 on behalf of the individual.
(13) "Federal banking agencies" means the Board of
Governors of the Federal Reserve System, the Comptroller of
the Currency, the Office of Thrift Supervision, the National
Credit Union Administration, and the Federal Deposit
Insurance Corporation.
(6) (14) "First lien mortgage transaction" means:
(a) a loan; in which a first or
(b) a consumer credit sale;
that is or will be used by the debtor primarily for personal,
family, or household purposes and that is secured by a
mortgage, or a land contract, or another equivalent consensual
security interest which constitutes a first lien is created or
retained against land upon which there is on a dwelling that is or
will be used by the debtor primarily for personal, family, or
household purposes. or residential real estate.
(15) "Immediate family member" means a spouse, child,
sibling, parent, grandparent, or grandchild. The term includes
stepparents, stepchildren, stepsiblings, and adoptive
relationships.
(16) "Individual" means a natural person.
(17) "Licensee" means a person licensed as a creditor under
this article.
(7) (18) "Loan" includes:
(a) the creation of debt by:
(i) the creditor's payment of or agreement to pay money to
the debtor or to a third party for the account of the debtor; or
(ii) the extension of credit by a person who regularly
engages as a seller in credit transactions primarily secured
by an interest in land;
(b) the creation of debt by a credit to an account with the
creditor upon which the debtor is entitled to draw
immediately; and
(c) the forbearance of debt arising from a loan.
(19) "Loan brokerage business" means any activity in which
a person, in return for any consideration from any source,
procures, attempts to procure, or assists in procuring, a
mortgage transaction from a third party or any other person,
whether or not the person seeking the mortgage transaction
actually obtains the mortgage transaction.
(20) "Loan processor or underwriter" means an individual
who performs clerical or support duties as an employee at the
direction of, and subject to the supervision and instruction of,
a person licensed or exempt from licensing under this article.
For purposes of this subsection, the term "clerical or support
duties" may include, after the receipt of an application, the
following:
(a) The receipt, collection, distribution, and analysis of
information common for the processing or underwriting of
a mortgage transaction.
(b) The communication with a consumer to obtain the
information necessary for the processing or underwriting
of a loan, to the extent that the communication does not
include:
(i) offering or negotiating loan rates or terms; or
(ii) counseling consumers about mortgage transaction
rates or terms.
An individual engaging solely in loan processor or
underwriter activities shall not represent to the public,
through advertising or other means of communicating or
providing information, including the use of business cards,
stationery, brochures, signs, rate lists, or other promotional
items, that the individual can or will perform any of the
activities of a mortgage loan originator.
(21) "Mortgage loan originator" means an individual who, for
compensation or gain, or in the expectation of compensation
or gain, engages in taking a mortgage transaction application
or in offering or negotiating the terms of a mortgage
transaction that either is made under this article or under
IC 24-4.5 or is made by an employee of a person licensed or
exempt from licensing under this article or under IC 24-4.5,
while the employee is engaging in the loan brokerage business.
The term does not include the following:
(a) An individual engaged solely as a loan processor or
underwriter as long as the individual works exclusively as
an employee of a person licensed or exempt from licensing
under this article.
(b) Unless the person or entity is compensated by:
(i) a creditor;
(ii) a loan broker;
(iii) another mortgage loan originator; or
(iv) any agent of a creditor, a loan broker, or another
mortgage loan originator described in items (i) through
(iii);
a person or entity that performs only real estate brokerage
activities and is licensed or registered in accordance with
applicable state law.
(c) A person solely involved in extensions of credit relating
to timeshare plans (as defined in 11 U.S.C. 101(53D)).
(22) "Mortgage servicer" means the last person to whom a
mortgagor or the mortgagor's successor in interest has been
instructed by a mortgagee to send payments on a loan secured
by a mortgage.
(23) "Mortgage transaction" means:
(a) a loan; or
(b) a consumer credit sale;
that is or will be used by the debtor primarily for personal,
family, or household purposes and that is secured by a
mortgage, a land contract, or another equivalent consensual
security interest on a dwelling or residential real estate.
(24) "Nationwide Mortgage Licensing System and Registry"
or "NMLSR" means a mortgage licensing system developed
and maintained by the Conference of State Bank Supervisors
and the American Association of Residential Mortgage
Regulators for the licensing and registration of creditors and
mortgage loan originators.
(25) "Nontraditional mortgage product" means any mortgage
product other than a thirty (30) year fixed rate mortgage.
(26) "Organization" means a corporation, a government or
government subdivision, an agency, a trust, an estate, a
partnership, a limited liability company, a cooperative, an
association, a joint venture, an unincorporated organization,
or any other entity, however organized.
(8) (27) "Payable in installments", with respect to a debt or an
obligation, means that payment is required or permitted by written
agreement to be made in more than four (4) installments not
including a down payment.
(9) (28) "Person" includes an individual or an organization.
(10) A person is "regularly engaged" as a creditor in first lien
mortgage transactions in Indiana if:
(a) the person acted as a creditor in first lien mortgage
transactions in Indiana more than five (5) times in the
preceding calendar year; or
(b) the person did not meet the numerical standards set forth
in subdivision (a) in the preceding calendar year, but has or
will meet the numerical standards set forth in subdivision (a)
in the current calendar year.
(29) "Principal" of a mortgage transaction means the total of:
(a) the net amount paid to, receivable by, or paid or
payable for the account of the debtor; and
(b) to the extent that payment is deferred, amounts
actually paid or to be paid by the creditor for registration,
certificate of title, or license fees if not included in clause
(a).
(30) "Real estate brokerage activity" means any activity that
involves offering or providing real estate brokerage services
to the public, including the following:
(a) Acting as a real estate agent or real estate broker for a
buyer, seller, lessor, or lessee of real property.
(b) Bringing together parties interested in the sale,
purchase, lease, rental, or exchange of real property.
(c) Negotiating, on behalf of any party, any part of a
contract relating to the sale, purchase, lease, rental, or
exchange of real property (other than in connection with
providing financing with respect to the sale, purchase,
lease, rental, or exchange of real property).
(d) Engaging in any activity for which a person engaged in
the activity is required to be registered or licensed as a real
estate agent or real estate broker under any applicable
law.
(e) Offering to engage in any activity, or act in any
capacity, described in this subsection.
(31) "Registered mortgage loan originator" means any
individual who:
(a) meets the definition of mortgage loan originator and is
an employee of:
(i) a depository institution;
(ii) a subsidiary that is owned and controlled by a
depository institution and regulated by a federal banking
agency; or
(iii) an institution regulated by the Farm Credit
Administration; and
(b) is registered with, and maintains a unique identifier
through, the NMLSR.
(32) "Residential real estate" means any real property that is
located in Indiana and on which there is located or intended
to be constructed a dwelling.
(11) (33) "Revolving first lien mortgage transaction" means an
arrangement between a creditor and a debtor a first lien
mortgage transaction in which:
(a) the creditor permits the debtor to obtain advances from
time to time;
(b) the unpaid balances of principal, credit service charges, or
loan finance charges, and other appropriate charges are
debited to an account; and
(c) the debtor has the privilege of paying the balances in
installments.
(12) "Supervised financial organization" means a person that is:
(a) organized, chartered, or holding an authorization certificate
under the laws of a state or of the United States that authorizes
the person to make loans and to receive deposits, including
deposits into a savings, share, certificate, or deposit account;
and
(b) subject to supervision by an official or agency of a state or
of the United States.
(13) (34) "Tablefunded" means a transaction in which:
(a) a person closes a first lien mortgage transaction in the
person's own name as a mortgagee with funds provided by one
(1) or more other persons; and
(b) the transaction is assigned simultaneously to the mortgage
creditor providing the funding not later than one (1) business
day after the funding of the transaction.
(35) "Unique identifier" means a number or other identifier
assigned by protocols established by the NMLSR.
(a) one hundred dollars ($100) if an accurate payoff amount is not provided by the creditor or mortgage servicer not later than ten (10) calendar days after the creditor or mortgage servicer receives the debtor's first written request; and
(b) the greater of:
(i) one hundred dollars ($100); or
(ii) the loan finance charge that accrues on the first lien mortgage transaction from the date the creditor or mortgage servicer receives the first written request until the date on which the accurate payoff amount is provided;
if an accurate payoff amount is not provided by the creditor or mortgage servicer not later than ten (10) calendar days after the creditor or mortgage servicer receives the debtor's second written request, and the creditor or mortgage servicer fails to comply with subdivision (a).
(2) This subsection applies to a first lien mortgage transaction, or the refinancing or consolidation of a first lien mortgage transaction, that:
(a) is closed after June 30, 2009; and
(b) has an interest rate that is subject to change at one (1) or more times during the term of the first lien mortgage transaction.
A creditor in a transaction to which this subsection applies may not
contract for and may not charge the debtor a prepayment fee or penalty.
(3) This subsection applies to a first lien mortgage transaction with
respect to which any installment or minimum payment due is
delinquent for at least sixty (60) days. The creditor, servicer, or the
creditor's agent shall acknowledge a written offer made in connection
with a proposed short sale not later than ten (10) business days after the
date of the offer if the offer complies with the requirements for a
qualified written request set forth in 12 U.S.C. 2605(e)(1)(B). The
creditor, servicer, or creditor's agent is required to acknowledge a
written offer made in connection with a proposed short sale from a
third party acting on behalf of the debtor only if the debtor has
provided written authorization for the creditor, servicer, or creditor's
agent to do so. Not later than thirty (30) business days after receipt of
an offer under this subsection, the creditor, servicer, or creditor's agent
shall respond to the offer with an acceptance or a rejection of the offer.
Payment accepted by a creditor, servicer, or creditor's agent in
connection with a short sale constitutes payment in full satisfaction
of the first lien mortgage transaction unless the creditor, servicer,
or creditor's agent obtains:
(a) the following statement: "The debtor remains liable for
any amount still owed under the first lien mortgage
transaction."; or
(b) a statement substantially similar to the statement set forth
in subdivision (a);
acknowledged by the initials or signature of the debtor, on or
before the date on which the short sale payment is accepted. As
used in this subsection, "short sale" means a transaction in which the
property that is the subject of a first lien mortgage transaction is sold
for an amount that is less than the amount of the debtor's outstanding
obligation under the first lien mortgage transaction. A creditor or
mortgage servicer that fails to respond to an offer within the time
prescribed by this subsection is liable in accordance with 12 U.S.C.
2605(f) in any action brought under that section.
entity that engages in Indiana as a creditor in first lien mortgage
transactions. However, a separate license under this article is not
required for each branch of a legal entity licensed under this
article.
(2) Each:
(a) creditor licensed under this article; and
(b) entity exempt from licensing under this article that
employs a licensed mortgage loan originator;
shall register with and maintain a valid unique identifier issued by
the NMLSR. Each licensed mortgage loan originator must be
employed by, and associated with, a licensed creditor, or an entity
exempt from licensing under this article, in the NMLSR in order
to originate loans.
(3) Applicants for a license under this article must apply for the
license in the form prescribed by the director. Each form:
(a) must contain content as set forth by rule, instruction, or
procedure of the director; and
(b) may be changed or updated as necessary by the director
to carry out the purposes of this article.
(4) To fulfill the purposes of this article, the director may
establish relationships or contracts with the NMLSR or other
entities designated by the NMLSR to:
(a) collect and maintain records; and
(b) process transaction fees or other fees related to licensees
or other persons subject to this article.
(5) For the purpose of participating in the NMLSR, the director
or the department may:
(a) waive or modify, in whole or in part, by rule or order, any
of the requirements of this article; and
(b) establish new requirements as reasonably necessary to
participate in the NMLSR.
(2) A license may not be issued unless the department finds that the professional training and experience, financial responsibility, character, and fitness of:
(a) the applicant and any significant affiliate of the applicant;
(b) each executive officer, director, or manager of the applicant, or any other individual having a similar status or performing a
similar function for the applicant; and
(c) if known, each person directly or indirectly owning of record
or owning beneficially at least ten percent (10%) of the
outstanding shares of any class of equity security of the applicant;
are such as to warrant belief that the business will be operated honestly
and fairly within the purposes of this article.
(3) The director is entitled to request evidence of compliance with
this section at:
(a) the time of application;
(b) the time of renewal of a license; or
(c) any other time considered necessary by the director.
(4) Evidence of compliance with this section may must include:
(a) criminal background checks, as described in section 402.1 of
this chapter, including a national criminal history background
check (as defined in IC 10-13-3-12) by the Federal Bureau of
Investigation, for any individual described in subsection (2);
(b) credit histories as described in section 402.2 of this chapter;
and
(c) surety bond requirements as described in section 402.3 of
this chapter;
(d) a review of licensure actions in Indiana and in other states;
and
(c) (e) other background checks considered necessary by the
director.
If the director requests a national criminal history background check
under subdivision (a) for an individual described in subsection (2), the
director shall require the individual to submit fingerprints to the
department or to the state police department, as appropriate, at the time
evidence of compliance is requested under subsection (3). The
individual to whom the request is made shall pay any fees or costs
associated with the fingerprints and the national criminal history
background check. The national criminal history background check
may be used by the director to determine the individual's compliance
with this section. The director or the department may not release the
results of the national criminal history background check to any private
entity.
(5) For purposes of this section and in order to reduce the points
of contact that the director has to maintain for purposes of this
section, the director may use the NMLSR as a channeling agent for
requesting and distributing information to and from any source as
directed by the director.
(5) (6) The department may deny an application under this section
if the director of the department determines that the application was
submitted for the benefit of, or on behalf of, a person who does not
qualify for a license.
(6) (7) Upon written request, the applicant is entitled to a hearing on
the question of the qualifications of the applicant for a license in the
manner provided in IC 4-21.5.
(7) (8) The applicant shall pay the following fees at the time
designated by the department:
(a) An initial license fee as established by the department under
IC 28-11-3-5.
(b) An annual renewal fee as established by the department under
IC 28-11-3-5.
(c) Examination fees as established by the department under
IC 28-11-3-5.
(8) (9) A fee as established by the department under IC 28-11-3-5
may be charged for each day the annual renewal fee a fee under
subsection (7)(b) is 8(b) or 8(c) is delinquent.
(9) (10) A license issued under this section is not assignable or
transferable.
(10) Subject to subsection (11), the director may designate an
automated central licensing system and repository, operated by a third
party, to serve as the sole entity responsible for:
(a) processing applications and renewals for licenses under this
section; and
(b) performing other services that the director determines are
necessary for the orderly administration of the department's
licensing system under this article.
(11) The director's authority to designate an automated central
licensing system and repository under subsection (10) is subject to the
following:
(a) The director or the director's designee may not require any
person exempt from licensure under this article, or any employee
or agent of an exempt person, to:
(i) submit information to; or
(ii) participate in;
the automated central licensing system and repository.
(b) Information stored in the automated central licensing system
and repository is subject to the confidentiality provisions of
IC 28-1-2-30 and IC 5-14-3. A person may not:
(i) obtain information from the automated central licensing
system and repository, unless the person is authorized to do so
by statute;
(2) For purposes of this section and in order to reduce the points of contact that the Federal Bureau of Investigation may have to maintain for purposes of this section, the director may use the NMLSR as a channeling agent for requesting information from and distributing information to the United States Department of Justice or any governmental agency.
(2) The individual must submit personal history and experience information in a form prescribed by the NMLSR, including the submission of authorization for the NMLSR or the director to obtain an independent credit report obtained from a consumer reporting agency described in Section 603(p) of the Fair Credit Reporting Act (15 U.S.C. 1681a(p)).
(3) The director may consider one (1) or more of the following when determining if an individual has demonstrated financial responsibility:
(a) Bankruptcies filed within the last ten (10) years.
(b) Current outstanding judgments, except judgments solely as a result of medical expenses.
(c) Current outstanding tax liens or other government liens or filings.
(d) Foreclosures within the past three (3) years.
(e) A pattern of serious delinquent accounts within the past three (3) years.
(a) creditor; and
(b) entity exempt from licensing under this article that employs a licensed mortgage loan originator;
must be covered by a surety bond in accordance with this section.
(2) A surety bond must:
(a) provide coverage for each creditor and each entity exempt from licensing under this article that employs a mortgage loan originator in an amount as prescribed in subsection (4); and
(b) be in a form prescribed by the director.
(3) The director may adopt rules or guidance documents with respect to the requirements for a surety bond as necessary to accomplish the purposes of this article.
(4) The penal sum of the surety bond shall be maintained in an amount that reflects the dollar amount of mortgage transactions originated as determined by the director.
(5) If an action is commenced on the surety bond of a creditor or an entity exempt from licensing under this article as described in subsection (1), the director may require the filing of a new bond.
(6) A creditor or an entity exempt from licensing under this article as described in subsection (1) shall file a new surety bond immediately upon recovery of any action on the surety bond required under this section.
(a) processing applications and renewals for licenses under this article;
(b) issuing unique identifiers for licensees and entities exempt from licensing under this article that employ a licensed mortgage loan originator under this article; and
(c) performing other services that the director determines are necessary for the orderly administration of the department's licensing system under this article.
(2) Subject to the confidentiality provisions contained in
IC 5-14-3, this section, and IC 28-1-2-30, the director shall
regularly report significant or recurring violations of this article
to the NMLSR.
(3) Subject to the confidentiality provisions contained in
IC 5-14-3, this section, and IC 28-1-2-30, the director may report
complaints received regarding licensees under this article to the
NMLSR.
(4) The director may report publicly adjudicated licensure
actions against a licensee to the NMLSR.
(5) The director shall establish a process in which licensees may
challenge information reported to the NMLSR by the department.
(6) The director's authority to designate the NMLSR under
subsection (1) is subject to the following:
(a) Information stored in the NMLSR is subject to the
confidentiality provisions of IC 5-14-3 and IC 28-1-2-30. A
person may not:
(i) obtain information from the NMLSR, unless the person
is authorized to do so by statute;
(ii) initiate any civil action based on information obtained
from the NMLSR if the information is not otherwise
available to the person under any other state law; or
(iii) initiate any civil action based on information obtained
from the NMLSR if the person could not have initiated the
action based on information otherwise available to the
person under any other state law.
(b) Documents, materials, and other forms of information in
the control or possession of the NMLSR that are confidential
under IC 28-1-2-30 and that are:
(i) furnished by the director, the director's designee, or a
licensee; or
(ii) otherwise obtained by the NMLSR;
are confidential and privileged by law and are not subject to
inspection under IC 5-14-3, subject to subpoena, subject to
discovery, or admissible in evidence in any civil action.
However, the director may use the documents, materials, or
other information available to the director in furtherance of
any action brought in connection with the director's duties
under this article.
(c) Disclosure of documents, materials, and information:
(i) to the director; or
(ii) by the director;
under this subsection does not result in a waiver of any
applicable privilege or claim of confidentiality with respect to
the documents, materials, or information.
(d) Information provided to the NMLSR is subject to
IC 4-1-11.
(e) This subsection does not limit or impair a person's right
to:
(i) obtain information;
(ii) use information as evidence in a civil action or
proceeding; or
(iii) use information to initiate a civil action or proceeding;
if the information may be obtained from the director or the
director's designee under any law.
(f) Except as otherwise provided in Public Law 110-289,
Section 1512, the requirements under any federal law or
IC 5-14-3 regarding the privacy or confidentiality of any
information or material provided to the NMLSR, and any
privilege arising under federal or state law, including the
rules of any federal or state court, with respect to the
information or material, continue to apply to the information
or material after the information or material has been
disclosed to the NMLSR. The information and material may
be shared with all state and federal regulatory officials with
mortgage industry oversight authority without the loss of
privilege or the loss of confidentiality protections provided by
federal law or IC 5-14-3.
(g) For purposes of this section, the director may enter
agreements or sharing arrangements with other governmental
agencies, the Conference of State Bank Supervisors, the
American Association of Residential Mortgage Regulators, or
other associations representing governmental agencies, as
established by rule or order of the director.
(h) Information or material that is subject to a privilege or
confidentiality under subdivision (f) is not subject to:
(i) disclosure under any federal or state law governing the
disclosure to the public of information held by an officer or
an agency of the federal government or the respective
state; or
(ii) subpoena, discovery, or admission into evidence in any
private civil action or administrative process, unless with
respect to any privilege held by the NMLSR with respect
to the information or material, the person to whom the
information or material pertains waives, in whole or in
part, in the discretion of the person, that privilege.
(i) Any provision of IC 5-14-3 that concerns the disclosure of:
(i) confidential supervisory information; or
(ii) any information or material described in subdivision
(f);
and that is inconsistent with subdivision (f) is superseded by
this section.
(j) This section does not apply with respect to information or
material that concerns the employment history of, and
publicly adjudicated disciplinary and enforcement actions
against, a person described in section 402(2) of this chapter
and that is included in the NMLSR for access by the public.
(k) The director may require a licensee required to submit
information to the NMLSR to pay a processing fee considered
reasonable by the director. In determining whether an
NMLSR processing fee is reasonable, the director shall:
(i) require review of; and
(ii) make available;
the audited financial statements of the NMLSR.
(a) The creditor has continued to meet the surety bond requirement under section 402.3 of this chapter.
(b) The creditor has filed the creditor's annual call report in a manner that satisfies section 405(4) of this chapter.
(c) The creditor has paid all required fees for renewal of the license.
(d) The creditor and individuals described in section 402(2) of this chapter continue to meet all the standards for licensing contained in section 402 of this chapter.
(a) file any renewal form required by the department; or
(b) pay any license renewal fee described under section 402 of this chapter;
not later than sixty (60) days after the due date.
(a) Pay all delinquent fees and apply for
(b) Appeal the revocation or suspension to the department for an administrative review under IC 4-21.5-3. Pending the decision resulting from the hearing under IC 4-21.5-3 concerning the license revocation or suspension, the license remains in force.
(a) the licensee has repeatedly and willfully violated:
(i) this article or any rule,
(ii) any other state or federal law, regulation, or rule applicable to first lien mortgage transactions;
(b) the licensee does not meet the licensing qualifications contained in section 402 of this chapter; or
(2) Except as provided in section 403 of this chapter, a revocation or suspension of a license is not authorized under this article unless before instituting proceedings to suspend or revoke the license, the department gives notice to the licensee of the conduct or facts that warrant the intended action, and the licensee is given an opportunity to show compliance with all lawful requirements for retention of the license.
(3) If the department finds that probable cause for revocation of a license exists and that enforcement of this article requires immediate suspension of the license pending investigation, the department may, after a hearing with the licensee upon five (5) days written notice to the licensee, enter an order suspending the license for not more than thirty (30) days.
(4) Whenever the department revokes or suspends a license, the department shall enter an order to that effect and notify the licensee of the revocation or suspension. Not later than five (5) days after the entry of the order the department shall deliver to the licensee a copy of the order and the findings supporting the order.
(5) Any person holding a license to engage in first lien mortgage transactions as a creditor may relinquish the license by notifying the department in writing of the relinquishment. However, a relinquishment under this paragraph does not affect the person's liability for acts previously committed and coming within the scope of this article.
(6) If the director determines it to be in the public interest, the director may pursue revocation of a license of a licensee that has relinquished the license under subsection (5).
(a) the person whose license has been revoked, suspended, or relinquished; and
(b) any debtor.
(a) has just cause to believe an emergency exists from which it is necessary to protect the interests of the public; or
(b) determines that a license was obtained for the benefit of, or on behalf of, a person who does not qualify for a license;
the director may proceed with the revocation of the license under IC 4-21.5-3-6.
(a) has committed a violation of a statute, a rule, a final cease and desist order, any condition imposed in writing by the director in connection with the granting of any application or other request by the creditor, or any written agreement between the creditor and the director or the department;
(b) has committed fraudulent or unconscionable conduct; or
(c) has been convicted of or has pleaded guilty or nolo contendere to a felony under the laws of Indiana or any other jurisdiction;
the director, subject to subsection (2), may issue and serve upon the officer, director, or employee a notice of the director's intent to issue an order removing the person from the person's office or employment, an order prohibiting any participation by the person in the conduct of the affairs of any creditor, or an order both removing the person and prohibiting the person's participation.
(2) A violation, practice, or breach specified in subsection (1) is subject to the authority of the director under subsection (1) if the director finds any of the following:
(a) The interests of the creditor's customers could be seriously prejudiced by reason of the violation or practice.
(b) The violation, practice, or breach involves personal dishonesty on the part of the officer, director, or employee involved.
(c) The violation, practice, or breach demonstrates a willful or continuing disregard by the officer, director, or employee for state and federal laws and regulations, and for the consumer protections contained in this article.
(3) A person who:
(a) has been convicted of; or
(b) has pleaded guilty or nolo contendere to;
a felony under the laws of Indiana or any other jurisdiction may not serve as an officer, a director, or an employee of a creditor, or serve in any similar capacity, unless the person obtains the written consent of the director.
(4) A creditor that willfully permits a person to serve the creditor in violation of subsection (3) is subject to a civil penalty of five hundred dollars ($500) for each day the violation continues.
(a) be in writing;
(b) contain a statement of the facts constituting the alleged practice, violation, or breach;
(c) state the facts alleged in support of the violation, practice, or breach;
(d) state the director's intention to enter an order under
section 404.4(1) of this chapter;
(e) be delivered to the board of directors of the creditor;
(f) be delivered to the officer, director, or employee
concerned;
(g) specify the procedures that must be followed to initiate a
hearing to contest the facts alleged; and
(h) if the director suspends or prohibits an officer, a director,
or an employee of the creditor from participating in the
affairs of the creditor, as described in subsection (5), include
a statement of the suspension or prohibition.
(2) If a hearing is requested not later than ten (10) days after
service of the written notice, the department shall hold a hearing
concerning the alleged practice, violation, or breach. The hearing
shall be held not later than forty-five (45) days after receipt of the
request. The department, based on the evidence presented at the
hearing, shall enter a final order under section 404.4 of this
chapter.
(3) If no hearing is requested within the time specified in
subsection (2), the director may proceed to issue a final order
under section 404.4 of this chapter on the basis of the facts set forth
in the written notice.
(4) An officer, director, or employee who is removed from a
position under a removal order that has become final may not
participate in the conduct of the affairs of any licensee under this
article without the approval of the director.
(5) The director may, for the protection of the creditor or the
interests of its customers, suspend from office or prohibit from
participation in the affairs of the creditor an officer, a director, or
an employee of a creditor who is the subject of a written notice
served by the director under section 404.1(1) of this chapter. A
suspension or prohibition under this subsection becomes effective
upon service of the notice under section 404.1(1) of this chapter.
Unless stayed by a court in a proceeding authorized by subsection
(6), the suspension or prohibition remains in effect pending
completion of the proceedings related to the notice served under
section 404.1(1) of this chapter and until the effective date of an
order entered by the department under subsection (2) or the
director under subsection (3). Copies of the notice shall also be
served upon the creditor or affiliate of which the person is an
officer, a director, or an employee.
(6) Not more than fifteen (15) days after an officer, a director,
or an employee has been suspended from office or prohibited from
participation in the conduct of the affairs of the creditor or affiliate
under subsection (5), the officer, director, or employee may apply
to a court having jurisdiction for a stay of the suspension or
prohibition pending completion of the proceedings related to the
written notice served under section 404.1(1) of this chapter, and the
court may stay the suspension or prohibition.
(7) The department shall maintain an official record of a
proceeding under this chapter.
(2) Unless the director has entered into a consent agreement described in section 404.3 of this chapter, a final order must include separately stated findings of fact and conclusions of law for all aspects of the order.
(3) In a final order under this section, the department or the director, as appropriate, may order one (1) or more of the following with respect to an officer, a director, or an employee of a creditor:
(a) The removal of the officer, director, or employee from the person's office, position, or employment.
(b) A prohibition against any participation by the officer, director, or employee in the conduct of the affairs of any creditor.
(c) If the subject of the order is an officer or a director of a
creditor, and subject to section 404.6 of this chapter, the
imposition of a civil penalty not to exceed fifteen thousand
dollars ($15,000) for each practice, violation, or act that:
(i) is described in section 404.1 of this chapter; and
(ii) is found to exist by the department or the director.
(4) A final order shall be issued in writing not later than ninety
(90) days after conclusion of a hearing held under section 404.2(2)
of this chapter, unless this period is waived or extended with the
written consent of all parties or for good cause shown.
(5) If the officer, director, or employee does not appear
individually or by an authorized representative at a hearing held
under section 404.2(2) of this chapter, the officer, director, or
employee is considered to have consented to the issuance of a final
order.
(6) The remedies provided in this chapter are in addition to
other remedies contained in this article.
(2) A final order remains effective and enforceable as provided in the order.
(3) The department or a reviewing court may stay, modify, or vacate a final order.
(a) The appropriateness of the civil penalty with respect to the financial resources and good faith of the individual charged.
(b) The gravity of the practice, violation, or act.
(c) The history of previous practices, violations, or acts.
(d) The economic benefit derived by the individual from the practice, violation, or act.
(e) Other factors that justice requires.
(2) A creditor may not indemnify a director or an officer for a
civil penalty imposed in a final order under section 404.4(3)(c) of
this chapter.
(3) Civil penalties shall be deposited in the financial institutions
fund established by IC 28-11-2-9.
(a) An order issued under this chapter.
(b) A written agreement entered into by the department or the director and any director, officer, or employee of a creditor.
(c) Any condition imposed in writing by the department or the director on any director, officer, or employee of a creditor.
(2)
(3) Every licensee shall use automated examination and regulatory software designated by the director, including third party software. Use of the software consistent with guidance and policies issued by the director is not a violation of IC 28-1-2-30.
(4) Each:
(a) creditor licensed by the department under this article; and
(b) entity that is exempt from licensing under this article and that employs one (1) or more licensed mortgage originators;
shall submit to the NMLSR reports of condition, which must be in
a form and must contain information as required by the NMLSR.
(5) Each:
(a) creditor licensed by the department under this article; and
(b) entity exempt from licensing under this article that
employs licensed mortgage loan originators;
shall file with the department additional financial statements relating
to all first lien mortgage transactions originated by the licensee. The
licensee shall file the financial statements licensed creditor or the
exempt entity as required by the department, but not more frequently
than annually, in the form prescribed by the department.
(3) (6) A licensee licensed creditor shall file notification with the
department if the licensee:
(a) has a change in name, address, or any of its principals;
(b) opens a new branch, closes an existing branch, or relocates an
existing branch;
(c) files for bankruptcy or reorganization; or
(d) is subject to revocation or suspension proceedings by a state
or governmental authority with regard to the licensee's licensed
creditor's activities;
not later than thirty (30) days after the date of the event described in
this subsection.
(4) (7) A licensee shall file notification with the department if a key
the licensee or any director, executive officer, or director manager
of the licensee (a) is under indictment for a felony involving fraud,
deceit, or misrepresentation under the laws of Indiana or any other
jurisdiction; or (b) has been convicted of or pleaded guilty or nolo
contendere to a felony involving fraud, deceit, or misrepresentation
under the laws of Indiana or any other jurisdiction. The licensee shall
file the notification required by this subsection not later than thirty
(30) days after the date of the event described in this subsection.
(8) A licensee shall file notification with the department if the
licensee or any director, executive officer, or manager of the
licensee has had the person's authority to do business in the
securities, commodities, banking, financial services, insurance, real
estate, or real estate appraisal industry revoked or suspended by
Indiana or by any other state, federal, or foreign governmental
agency or self regulatory organization. The licensee shall file the
notification required by this subsection not later than thirty (30)
days after the date of the event described in this subsection.
mortgage transaction that:
(1) qualifies as a home equity conversion mortgage under the
Federal Housing Administration's program; or
(2) otherwise constitutes a reverse mortgage;
shall provide the debtor with a pamphlet that is approved by the
department and that describes the availability of reverse mortgage
counseling services provided by housing counselors approved by
the Secretary of the United States Department of Housing and
Urban Development, as provided in 24 CFR 206.41(a). The debtor
must receive the counseling described in this section and present
the creditor with the certificate described in 24 CFR 206.41(c)
before the creditor may make a first lien mortgage transaction
described in this section to the debtor.
(a) Training, operating, and policy manuals.
(b) Minutes of:
(i) management meetings; and
(ii) other meetings.
(c) Financial records, credit files, and data bases.
(d) Other records that the department determines are necessary to perform its investigation or examination.
The department may also administer oaths or affirmations, subpoena witnesses, and compel the attendance of witnesses, including officers, principals, mortgage loan originators, employees, independent contractors, agents, and customers of licensees, and other individuals or persons subject to this article. The department may also adduce evidence and require the production of any matter that is
relevant to an investigation. The department shall determine the
sufficiency of the records maintained and whether the person has made
the required information reasonably available. The records concerning
any transaction subject to this article shall be retained for two (2) years
after the making of the final entry relating to the first lien mortgage
transaction, but in the case of a revolving first lien mortgage
transaction the two (2) year period is measured from the date of each
entry.
(2) The department's examination and investigatory authority under
this article includes the following:
(a) The authority to require a creditor to refund overcharges
resulting from the creditor's noncompliance with the terms of a
first lien mortgage transaction.
(b) The authority to require a creditor to comply with the penalty
provisions set forth in IC 24-4.4-2-201.
(c) The authority to investigate complaints filed with the
department by debtors.
(3) The department shall be given free access to the records
wherever the records are located. In making any examination or
investigation authorized by this article, the director may control
access to any documents and records of the licensee or person
under examination or investigation. The director may take
possession of the documents and records or place a person in
exclusive charge of the documents and records in the place where
the documents are usually kept. During the period of control, a
licensee or person may not remove or attempt to remove any of the
documents and records except under a court order or with the
consent of the director. Unless the director has reasonable grounds
to believe the documents or records of the licensee or person have
been, or are, at risk of being altered or destroyed for purposes of
concealing a violation of this article, the licensee or person shall
have access to the documents or records as necessary to conduct
the licensee's or person's ordinary business affairs. If the person's
records are located outside Indiana, the records shall be made available
to the department at a convenient location within Indiana, or the person
shall pay the reasonable and necessary expenses for the department or
the department's representative to examine the records where they are
maintained. The department may designate comparable officials of the
state in which the records are located to inspect the records on behalf
of the department.
(4) Upon a person's failure without lawful excuse to obey a
subpoena or to give testimony and upon reasonable notice by the
department to all affected persons, the department may apply to any
civil court with jurisdiction for an order compelling compliance.
(5) The department shall not make public:
(a) the name or identity of a person whose acts or conduct the
department investigates under this section; or
(b) the facts discovered in the investigation.
However, this subsection does not apply to civil actions or enforcement
proceedings under this article.
(6) If a creditor contracts with an outside vendor to provide a
service that would otherwise be undertaken internally by the
creditor and be subject to the department's routine examination
procedures, the person that provides the service to the creditor
shall, at the request of the director, submit to an examination by
the department. If the director determines that an examination
under this subsection is necessary or desirable, the examination
may be made at the expense of the person to be examined. If the
person to be examined under this subsection refuses to permit the
examination to be made, the director may order any creditor that
is licensed under this article and that receives services from the
person refusing the examination to:
(a) discontinue receiving one (1) or more services from the
person; or
(b) otherwise cease conducting business with the person.
(a) retain attorneys, accountants, or other professionals and specialists as examiners, auditors, or investigators to conduct or assist in the conduct of examinations or investigations;
(b) enter into agreements or relationships with other government officials or regulatory associations in order to improve efficiencies and reduce regulatory burden by sharing:
(i) resources;
(ii) standardized or uniform methods or procedures; and
(iii) documents, records, information, or evidence obtained under this section;
(c) use, hire, contract, or employ public or privately available analytical systems, methods, or software to examine or investigate a licensee, an individual, or a person subject to this article;
(d) accept and rely on examination or investigation reports made by other government officials within or outside Indiana; and
(e) accept audit reports made by an independent certified public accountant for the licensee, individual, or person subject to this article in the course of that part of the examination covering the same general subject matter as the audit and may incorporate the audit report in the report of the examination, report of investigation, or other writing of the director.
(a) directly or indirectly employ any scheme, device, or artifice to defraud or mislead borrowers or lenders or to defraud any person;
(b) engage in any unfair or deceptive practice toward any person;
(c) obtain property by fraud or misrepresentation;
(d) solicit or enter into a contract with a borrower that provides in substance that the person or individual subject to this article may earn a fee or commission through "best efforts" to obtain a loan even though no loan is actually obtained for the borrower;
(e) solicit, advertise, or enter into a contract for specific interest rates, points, or other financing terms unless the terms are actually available at the time of soliciting, advertising, or contracting;
(f) conduct any business covered by this article without holding a valid license as required under this article, or assist or aid and abet any person in the conduct of business under this article without a valid license as required under this article;
(g) fail to make disclosures as required by this article or regulation adopted under this article and any other applicable state or federal law regulation;
(h) fail to comply with this article or rules adopted under this article, or fail to comply with any other state or federal law, rule, or regulation, applicable to any business authorized or conducted under this article;
(i) make, in any manner, any false or deceptive statement or
representation, with regard to the rates, points, or other
financing terms or conditions for a mortgage transaction, or
engage in bait and switch advertising;
(j) negligently make any false statement or knowingly and
willfully make any omission of material fact in connection
with any information or reports filed with a governmental
agency or the NMLSR or in connection with any investigation
conducted by the director or another governmental agency;
(k) make any payment, threat, or promise, directly or
indirectly, to any person for the purposes of influencing the
independent judgment of the person in connection with a
mortgage transaction, or make any payment, threat, or
promise, directly or indirectly, to any appraiser of a property,
for the purposes of influencing the independent judgment of
the appraiser with respect to the value of the property;
(l) collect, charge, attempt to collect or charge, or use or
propose any agreement purporting to collect or charge any
fee prohibited by this article;
(m) cause or require a borrower to obtain property insurance
coverage in an amount that exceeds the replacement cost of
the improvements as established by the property insurer;
(n) fail to account truthfully for money belonging to a party
to a mortgage transaction; or
(o) knowingly withhold, abstract, remove, mutilate, destroy,
or secrete any books, records, computer records, or other
information subject to examination under this article.
(a) a respondent aggrieved by an order of the department may obtain judicial review of the order; and
(b) the department may obtain an order of the court for the enforcement of the department's order.
A proceeding for review or enforcement under this subsection shall be initiated by the filing of a petition in the court. Copies of the petition shall be served upon all parties of record.
(2) Not later than thirty (30) days after service of a petition for review upon the department under subsection (1), or within such further time as the court may allow, the department shall transmit to the court the original or a certified copy of the entire record upon which the order that is the subject of the review is based, including any transcript of testimony, which need not be printed. By stipulation of all parties to the review proceeding, the record may be shortened. After conducting a hearing on the matter, the court may:
(a) reverse or modify the order if the findings of fact of the department are clearly erroneous in view of the reliable, probative, and substantial evidence in the whole record;
(b) grant any temporary relief or restraining order the court considers just; and
(c) enter an order:
(i) enforcing;
(ii) modifying;
(iii) enforcing as modified; or
(iv) setting aside;
in whole or in part, the order of the department; or
(d) enter an order remanding the case to the department for further proceedings.
(3) An objection not urged at the hearing shall not be considered by the court unless the failure to urge the objection is excused for good cause shown. A party may move the court to remand the case to the department in the interest of justice for the purpose of:
(a) adducing additional specified and material evidence; and
(b) seeking a finding upon such evidence;
upon good cause shown for the failure to previously adduce this evidence before the department.
(4) The jurisdiction of the court is exclusive and the court's final judgment or decree is subject to review on appeal in the same manner and form and with the same effect as in appeals from a final judgment or decree. The department's copy of the testimony shall be available at reasonable times to all parties for examination without cost.
(5) A proceeding for review under this section must be initiated not
later than thirty (30) days after a copy of the order of the department is
received. If a proceeding is not initiated within the time set forth in this
subsection, the department may obtain a decree of a civil court with
jurisdiction for enforcement of the department's order upon a showing
that:
(a) the order was issued in compliance with this section;
(b) a proceeding for review was not initiated within the thirty (30)
day period prescribed by this subsection; and
(c) the respondent is subject to the jurisdiction of the court.
(6) With respect to unconscionable agreements or fraudulent or
unconscionable conduct by a respondent, the department may not issue
an order under this section but may bring a civil action for an
injunction under section 111 of this chapter.
(a) for violations of this article occurring more than two (2) years before the action is brought; or
(b) for making unconscionable agreements or engaging in a course of fraudulent or unconscionable conduct.
(2) If the department determines, after notice and an opportunity
(3) If the department determines, after notice and opportunity to be heard, that a person has willfully violated this article, the department may, in addition to or instead of all other remedies available under this section, order restitution against the person subject to this article for a violation of this article.
P.L.182-2009(ss), SECTION 370, IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2010]: Sec. 102. Purposes; Rules
of Construction (1) This article shall be liberally construed and applied
to promote its underlying purposes and policies.
(2) The underlying purposes and policies of this article are:
(a) to simplify, clarify, and modernize the law governing retail
installment sales, consumer credit, small loans, and usury;
(b) to provide rate ceilings to assure an adequate supply of credit
to consumers;
(c) to further consumer understanding of the terms of credit
transactions and to foster competition among suppliers of
consumer credit so that consumers may obtain credit at
reasonable cost;
(d) to protect consumer buyers, lessees, and borrowers against
unfair practices by some suppliers of consumer credit, having due
regard for the interests of legitimate and scrupulous creditors;
(e) to permit and encourage the development of fair and
economically sound consumer credit practices;
(f) to conform the regulation of consumer credit transactions to
the policies of the Federal Consumer Credit Protection Act; and
(g) to make uniform the law including administrative rules among
the various jurisdictions.
(3) A reference to a requirement imposed by this article includes
reference to a related rule or guidance of the department adopted
pursuant to this article.
(4) A reference to a federal law in IC 24-4.5 is a reference to the law
in effect December 31, 2008. 2009.
(5) This article applies to a transaction if the director determines
that the transaction:
(a) is in substance a disguised consumer credit transaction; or
(b) involves the application of subterfuge for the purpose of
avoiding this article.
A determination by the director under this paragraph must be in writing
and shall be delivered to all parties to the transaction. IC 4-21.5-3
applies to a determination made under this paragraph.
(6) The authority of this article remains in effect, whether a
licensee, an individual, or a person subject to this article acts or
claims to act under any licensing or registration law of this state,
or claims to act without such authority.
(7) A violation of a state or federal law, regulation, or rule
applicable to consumer credit transactions is a violation of this
article.
(8) The department may enforce penalty provisions set forth in 15 U.S.C. 1640 for violations of disclosure requirements applicable to mortgage transactions.
(2) With respect to sellers of goods or services, small loan companies, licensed lenders, consumer and sales finance companies, industrial loan and investment companies, and commercial banks and trust companies, this article displaces existing limitations on their powers based solely on amount or duration of credit.
(3) Except as provided in subsection (1) and IC 24-4.6-1, this article does not displace limitations on powers of credit unions, savings banks, savings or building and loan associations, or other thrift institutions whether organized for the profit of shareholders or as mutual organizations.
(4) Except as provided in subsections (1) and (2), this article does not displace:
(a) limitations on powers of
(b) limitations on powers an organization is authorized to exercise under the laws of this state or the United States.
(1) IC 24-5-4 (before its repeal on October 1, 1971);
(2) IC 28-7-4 (before its repeal on October 1, 1971);
(3) IC 28-7-2 (before its repeal on October 1, 1971); or
(4) IC 28-5-1-4;
are licensed to make supervised loans under this article, subject to the renewal provisions contained in this article. All provisions of this
article apply to the persons previously licensed or authorized. The
department may deliver evidence of licensing to the persons previously
licensed or authorized.
(1) Extensions of credit to government or governmental agencies or instrumentalities.
(2) The sale of insurance by an insurer, except as otherwise provided in the chapter on insurance (IC 24-4.5-4).
(3) Transactions under public utility, municipal utility, or common carrier tariffs if a subdivision or agency of this state or of the United States regulates the charges for the services involved, the charges for delayed payment, and any discount allowed for early payment.
(4) The rates and charges and the disclosure of rates and charges of a licensed pawnbroker established in accordance with a statute or ordinance concerning these matters.
(5) A sale of goods, services, or an interest in land in which the goods, services, or interest in land are purchased primarily for a purpose other than a personal, family, or household purpose.
(6) A loan in which the debt is incurred primarily for a purpose other than a personal, family, or household purpose.
(7) An extension of credit primarily for a business, a commercial, or an agricultural purpose.
(8) An installment agreement for the purchase of home fuels in which a finance charge is not imposed.
(9) Loans made, insured, or guaranteed under a program authorized by Title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.).
(10) Transactions in securities or commodities accounts in which credit is extended by a broker-dealer registered with the Securities and Exchange Commission or the Commodity Futures Trading Commission.
(11) Except for IC 24-4.5-3-502.1(2), IC 24-4.5-3-503.3, IC 24-4.5-3-505(4), and IC 24-4.5-3-505(5), a loan made:
(A) in compliance with the requirements of; and
(B) by a community development corporation (as defined in IC 4-4-28-2) acting as a subrecipient of funds from;
the Indiana housing and community development authority established by IC 5-20-1-3.
(12) Except for IC 24-4.5-3-502.1(2), IC 24-4.5-3-503.3,
IC 24-4.5-3-505(4), and IC 24-4.5-3-505(5), a subordinate lien
mortgage transaction made by an entity that exclusively uses
funds provided by the United States Department of Housing
and Urban Development under Title 1 of the Housing and
Community Development Act of 1974, Public Law 93-383, as
amended (42 U.S.C. 5301 et seq).
(1) "Affiliate", with respect to any person subject to this article, means a person that, directly or indirectly, through one (1) or more intermediaries:
(a) controls;
(b) is controlled by; or
(c) is under common control with;
the person subject to this article.
(2) "Agreement" means the bargain of the parties in fact as found in their language or by implication from other circumstances, including course of dealing or usage of trade or course of performance.
(3) "Agricultural purpose" means a purpose related to the production, harvest, exhibition, marketing, transportation, processing, or manufacture of agricultural products by a natural person who cultivates, plants, propagates, or nurtures the agricultural products. "Agricultural products" includes agricultural, horticultural, viticultural, and dairy products, livestock, wildlife, poultry, bees, forest products, fish and shellfish, and any and all products raised or produced on farms and any processed or manufactured products thereof.
(4) "Average daily balance" means the sum of each of the daily balances in a billing cycle divided by the number of days in the billing cycle, and if the billing cycle is a month, the creditor may
elect to treat the number of days in each billing cycle as thirty (30).
(5) "Closing costs" with respect to a subordinate lien mortgage
transaction includes:
(a) fees or premiums for title examination, title insurance, or
similar purposes, including surveys;
(b) fees for preparation of a deed, settlement statement, or
other documents;
(c) escrows for future payments of taxes and insurance;
(d) fees for notarizing deeds and other documents;
(e) appraisal fees; and
(f) fees for credit reports.
(6) "Conspicuous" refers to a term or clause when it is so
written that a reasonable person against whom it is to operate
ought to have noticed it.
(7) "Consumer credit" means credit offered or extended to a
consumer primarily for a personal, family, or household purpose.
(8) "Consumer credit sale" is a sale of goods, services, or an
interest in land in which:
(a) credit is granted by a person who regularly engages as a
seller in credit transactions of the same kind;
(b) the buyer is a person other than an organization;
(c) the goods, services, or interest in land are purchased
primarily for a personal, family, or household purpose;
(d) either the debt is payable in installments or a finance
charge is made; and
(e) with respect to a sale of goods or services, either the
amount financed does not exceed fifty thousand dollars
($50,000) or the debt is secured by personal property used or
expected to be used as the principal dwelling of the buyer.
Unless the sale is made subject to this article by agreement
(IC 24-4.5-2-601), "consumer credit sale" does not include a sale in
which the seller allows the buyer to purchase goods or services
pursuant to a lender credit card or similar arrangement or except
as provided with respect to disclosure (IC 24-4.5-2-301), debtors'
remedies (IC 24-4.5-5-201), providing payoff amounts
(IC 24-4.5-2-209), and powers and functions of the department
(IC 24-4.5-6-101), a sale of an interest in land which is a first lien
mortgage transaction.
(9) "Consumer loan" means a loan made by a person regularly
engaged in the business of making loans in which:
(a) the debtor is a person other than an organization;
(b) the debt is primarily for a personal, family, or household
purpose;
(c) either the debt is payable in installments or a loan finance
charge is made; and
(d) either:
(i) the principal does not exceed fifty thousand dollars
($50,000); or
(ii) the debt is secured by an interest in land or by personal
property used or expected to be used as the principal
dwelling of the debtor.
Except as described in IC 24-4.5-3-105 of this chapter, the term
does not include a first lien mortgage transaction.
(10) "Credit" means the right granted by a creditor to a debtor
to defer payment of debt or to incur debt and defer its payment.
(11) "Creditor" means a person:
(a) who regularly engages in the extension of consumer credit
that is subject to a credit service charge or loan finance
charge, as applicable, or is payable by written agreement in
more than four (4) installments (not including a down
payment); and
(b) to whom the obligation is initially payable, either on the
face of the note or contract, or by agreement when there is not
a note or contract.
(12) "Depository institution" has the meaning set forth in the
federal Federal Deposit Insurance Act (12 U.S.C. 1813(c)) and
includes any credit union.
(13) "Director" means the director of the department of
financial institutions or the director's designee.
(14) "Dwelling" means a residential structure that contains one
(1) to four (4) units, regardless of whether the structure is attached
to real property. The term includes an individual:
(a) condominium unit;
(b) cooperative unit;
(c) mobile home; or
(d) trailer;
that is used as a residence.
(15) "Earnings" means compensation paid or payable for
personal services, whether denominated as wages, salary,
commission, bonus, or otherwise, and includes periodic payments
under a pension or retirement program.
(16) "Employee" means an individual who is paid wages or
other compensation by an employer required under federal income
tax law to file Form W-2 on behalf of the individual.
(17) "Federal banking agencies" means the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Office of Thrift Supervision, the National Credit Union Administration, and the Federal Deposit Insurance Corporation.
(18) "First lien mortgage transaction" means:
(a) a loan; or
(b) a consumer credit sale;
that is or will be used by the debtor primarily for personal, family, or household purposes and that is secured by a mortgage, a land contract, or another equivalent consensual security interest that constitutes a first lien
(19) "Immediate family member" means a spouse, child, sibling, parent, grandparent, or grandchild. The term includes stepparents, stepchildren, stepsiblings, and adoptive relationships.
(20) "Individual" means a natural person.
(21) "Lender credit card or similar arrangement" means an arrangement or loan agreement, other than a seller credit card, pursuant to which a lender gives a debtor the privilege of using a credit card, letter of credit, or other credit confirmation or identification in transactions out of which debt arises:
(a) by the lender's honoring a draft or similar order for the payment of money drawn or accepted by the debtor;
(b) by the lender's payment or agreement to pay the debtor's obligations; or
(c) by the lender's purchase from the obligee of the debtor's obligations.
(22) "Licensee" means a person licensed as a creditor under this article.
(23) "Loan brokerage business" means any activity in which a person, in return for any consideration from any source, procures, attempts to procure, or assists in procuring, a mortgage transaction from a third party or any other person, whether or not the person seeking the mortgage transaction actually obtains the mortgage transaction.
(24) "Loan processor or underwriter" means an individual who performs clerical or support duties as an employee at the direction of, and subject to the supervision and instruction of, a person licensed or exempt from licensing under this article. For purposes of this subsection, the term "clerical or support duties" may include, after the receipt of an application, the following:
(a) The receipt, collection, distribution, and analysis of information common for the processing or underwriting of a
mortgage transaction.
(b) The communication with a consumer to obtain the
information necessary for the processing or underwriting of
a loan, to the extent that the communication does not include:
(i) offering or negotiating loan rates or terms; or
(ii) counseling consumers about mortgage transaction rates
or terms.
An individual engaging solely in loan processor or underwriter
activities, shall not represent to the public through advertising or
other means of communicating or providing information, including
the use of business cards, stationery, brochures, signs, rate lists, or
other promotional items, that the individual can or will perform
any of the activities of a mortgage loan originator.
(25) "Mortgage loan originator" means an individual who, for
compensation or gain, or in the expectation of compensation or
gain, engages in taking a mortgage transaction application or in
offering or negotiating the terms of a mortgage transaction that
either is made under this article or under IC 24-4.5 or is made by
an employee of a person licensed or exempt from licensing under
this article or under IC 24-4.5, while the employee is engaging in
the loan brokerage business. The term does not include the
following:
(a) An individual engaged solely as a loan processor or
underwriter as long as the individual works exclusively as an
employee of a person licensed or exempt from licensing under
this article.
(b) Unless the person or entity is compensated by:
(i) a creditor;
(ii) a loan broker;
(iii) other mortgage loan originator; or
(iv) any agent of the creditor, loan broker, or other
mortgage loan originator described in items (i) through
(iii);
a person or entity that only performs real estate brokerage
activities and is licensed or registered in accordance with
applicable state law.
(c) A person solely involved in extensions of credit relating to
timeshare plans (as defined in 11 U.S.C. 101(53D)).
(26) "Mortgage servicer" means the last person to whom a
mortgagor or the mortgagor's successor in interest has been
instructed by a mortgagee to send payments on a loan secured by
a mortgage.
(27) "Mortgage transaction" means:
(a) a loan; or
(b) a consumer credit sale;
that is or will be used by the debtor primarily for personal, family,
or household purposes and that is secured by a mortgage, a land
contract, or another equivalent consensual security interest on a
dwelling or residential real estate.
(28) "Nationwide Mortgage Licensing System and Registry" or
"NMLSR" means a mortgage licensing system developed and
maintained by the Conference of State Bank Supervisors and the
American Association of Residential Mortgage Regulators for the
licensing and registration of creditors and mortgage loan
originators.
(29) "Nontraditional mortgage product" means any mortgage
product other than a thirty (30) year fixed rate mortgage.
(30) "Official fees" means:
(a) fees and charges prescribed by law which actually are or
will be paid to public officials for determining the existence of
or for perfecting, releasing, or satisfying a security interest
related to a consumer credit sale, consumer lease, or
consumer loan; or
(b) premiums payable for insurance in lieu of perfecting a
security interest otherwise required by the creditor in
connection with the sale, lease, or loan, if the premium does
not exceed the fees and charges described in paragraph (a)
that would otherwise be payable.
(31) "Organization" means a corporation, a government or
governmental subdivision, an agency, a trust, an estate, a
partnership, a limited liability company, a cooperative, an
association, a joint venture, an unincorporated organization, or
any other entity, however organized.
(32) "Payable in installments" means that payment is required
or permitted by written agreement to be made in more than four
(4) installments not including a down payment.
(33) "Person" includes an individual or an organization.
(34) "Person related to" with respect to an individual means:
(a) the spouse of the individual;
(b) a brother, brother-in-law, sister, or sister-in-law of the
individual;
(c) an ancestor or lineal descendants of the individual or the
individual's spouse; and
(d) any other relative, by blood or marriage, of the individual
or the individual's spouse who shares the same home with the
individual.
(35) "Person related to" with respect to an organization means:
(a) a person directly or indirectly controlling, controlled by,
or under common control with the organization;
(b) a director, an executive officer, or a manager of the
organization or a person performing similar functions with
respect to the organization or to a person related to the
organization;
(c) the spouse of a person related to the organization; and
(d) a relative by blood or marriage of a person related to the
organization who shares the same home with the person.
(36) "Presumed" or "presumption" means that the trier of fact
must find the existence of the fact presumed, unless and until
evidence is introduced that would support a finding of its
nonexistence.
(37) "Real estate brokerage activity" means any activity that
involves offering or providing real estate brokerage services to the
public, including the following:
(a) Acting as a real estate agent or real estate broker for a
buyer, seller, lessor, or lessee of real property.
(b) Bringing together parties interested in the sale, purchase,
lease, rental, or exchange of real property.
(c) Negotiating, on behalf of any party, any part of a contract
relating to the sale, purchase, lease, rental, or exchange of real
property (other than in connection with providing financing
with respect to the sale, purchase, lease, rental, or exchange
of real property).
(d) Engaging in any activity for which a person is required to
be registered or licensed as a real estate agent or real estate
broker under any applicable law.
(e) Offering to engage in any activity, or act in any capacity,
described in this subsection.
(38) "Registered mortgage loan originator" means any
individual who:
(a) meets the definition of mortgage loan originator and is an
employee of:
(i) a depository institution;
(ii) a subsidiary that is owned and controlled by a
depository institution and regulated by a federal banking
agency; or
(iii) an institution regulated by the Farm Credit
Administration; and
(b) is registered with, and maintains a unique identifier
through, the NMLSR.
(39) "Regularly engaged" means a person who extends
consumer credit:
(a) more than twenty-five (25) times; or
(b) at least one (1) time for a mortgage transaction secured by
a dwelling;
in the preceding calendar year. If a person did not meet these
numerical standards in the preceding calendar year, the numerical
standards shall be applied to the current calendar year.
(40) "Residential real estate" means any real property that is
located in Indiana and on which there is located or intended to be
constructed a dwelling.
(41) "Seller credit card" means an arrangement that gives to a
buyer or lessee the privilege of using a credit card, letter of credit,
or other credit confirmation or identification for the purpose of
purchasing or leasing goods or services from that person, a person
related to that person, or from that person and any other person.
The term includes a card that is issued by a person, that is in the
name of the seller, and that can be used by the buyer or lessee only
for purchases or leases at locations of the named seller.
(42) "Subordinate lien mortgage transaction" means:
(a) a loan; or
(b) a consumer credit sale;
that is or will be used by the debtor primarily for personal, family,
or household purposes and that is secured by a mortgage, a land
contract, or another equivalent consensual security interest that
constitutes a subordinate lien on a dwelling or residential real
estate.
(43) "Unique identifier" means a number or other identifier
assigned by protocols established by the NMLSR.
permitted by IC 24-4.5-2-201 through IC 24-4.5-2-210, a seller may
contract for and receive any of the following additional charges in
connection with a consumer credit sale:
(a) Official fees and taxes.
(b) Charges for insurance as described in subsection (2).
(c) Notwithstanding provisions of the Federal Consumer Credit
Protection Act concerning disclosure, charges for other benefits,
including insurance, conferred on the buyer, if the benefits are of
value to the buyer and if the charges are reasonable in relation to
the benefits, and are excluded as permissible additional charges
from the credit service charge. With respect to any additional
charge not specifically provided for in this section, to be a
permitted charge under this subsection the seller must submit a
written explanation of the charge to the department indicating
how the charge would be assessed and the value or benefit to the
buyer. Supporting documents may be required by the department.
The department shall determine whether the charge would be of
benefit to the buyer and is reasonable in relation to the benefits.
(d) A charge not to exceed twenty-five dollars ($25) for each
return by a bank or other depository institution of a dishonored
check, negotiable order of withdrawal, or share draft issued by the
debtor.
(e) Annual participation fees assessed in connection with a
revolving charge account. Annual participation fees must:
(i) be reasonable in amount;
(ii) bear a reasonable relationship to the seller's costs to
maintain and monitor the charge account; and
(iii) not be assessed for the purpose of circumvention or
evasion of this article, as determined by the department.
(2) An additional charge may be made for insurance written in
connection with the sale, other than insurance protecting the seller
against the buyer's default or other credit loss:
(a) with respect to insurance against loss of or damage to
property, or against liability, if the seller furnishes a clear and
specific statement in writing to the buyer, setting forth the cost of
the insurance if obtained from or through the seller and stating
that the buyer may choose the person, subject to the seller's
reasonable approval, through whom the insurance is to be
obtained; and
(b) with respect to consumer credit insurance providing life,
accident, unemployment or other loss of income, or health
coverage, if the insurance coverage is not a factor in the approval
by the seller of the extension of credit and is clearly disclosed in
writing to the buyer, and if, in order to obtain the insurance in
connection with the extension of credit, the buyer gives specific,
affirmative, written indication of the desire to do so after written
disclosure of the cost.
(3) With respect to a debt secured by an interest in land,
subordinate lien mortgage transaction, the following closing costs,
if the costs are bona fide, reasonable in amount, and not for the purpose
of circumvention or evasion of this article:
(a) fees for title examination, abstract of title, title insurance,
property surveys, or similar purposes;
(b) fees for preparing deeds, mortgages, and reconveyance,
settlement, and similar documents;
(c) notary and credit report fees;
(d) amounts required to be paid into escrow or trustee accounts if
the amounts would not otherwise be included in the loan finance
charge; and
(e) appraisal fees.
(2) At the time of prepayment of a credit sale not subject to the provisions of rebate upon prepayment (IC 24-4.5-2-210), the total credit service charge, including the prepaid credit service charge, may not exceed the maximum charge allowed under this chapter for the period the credit sale was in effect.
(3) The creditor or mortgage servicer shall provide an accurate payoff of the consumer credit sale to the debtor within ten (10) calendar days after the creditor or mortgage servicer receives the debtor's written request for the accurate consumer credit sale payoff amount. A creditor or mortgage servicer who fails to provide the accurate consumer credit sale payoff amount is liable for:
(A) one hundred dollars ($100) if an accurate consumer credit sale payoff amount is not provided by the creditor or mortgage servicer within ten (10) calendar days after the creditor or mortgage servicer receives the debtor's first written request; and
(B) the greater of:
(i) one hundred dollars ($100); or
(ii) the credit service charge that accrues on the sale from the date the creditor or mortgage servicer receives the first written request until the date on which the accurate consumer credit sale payoff amount is provided;
if an accurate consumer credit sale payoff amount is not provided by the creditor or mortgage servicer within ten (10) calendar days after the creditor or mortgage servicer receives the debtor's second written request, and the creditor or mortgage servicer failed to comply with clause (A).
A liability under this subsection is an excess charge under IC 24-4.5-5-202.
(4) As used in this subsection, "mortgage transaction" means a consumer credit sale in which a mortgage, deed of trust, or a land contract that constitutes a lien is created or retained against land upon which there is a dwelling that is or will be used by the debtor primarily for personal, family, or household purposes. This subsection applies to a mortgage transaction with respect to which any installment or minimum payment due is delinquent for at least sixty (60) days. The creditor, servicer, or the creditor's agent shall acknowledge a written offer made in connection with a proposed short sale not later than ten (10) business days after the date of the offer if the offer complies with the requirements for a qualified written request set forth in 12 U.S.C. 2605(e)(1)(B). The creditor, servicer, or creditor's agent is required to acknowledge a written offer made in connection with a proposed short sale from a third party acting on behalf of the debtor only if the debtor has provided written authorization for the creditor, servicer, or creditor's agent to do so. Not later than thirty (30) business days after receipt of an offer under this subsection, the creditor, servicer, or creditor's agent shall respond to the offer with an acceptance or a rejection of the offer. Payment accepted by a creditor, servicer, or creditor's agent in connection with a short sale constitutes payment in full satisfaction of the mortgage transaction unless the creditor, servicer, or creditor's agent obtains:
(a) the following statement: "The debtor remains liable for any amount still owed under the mortgage transaction."; or
(b) a statement substantially similar to the statement set forth in subdivision (a);
acknowledged by the initials or signature of the debtor, on or before the date on which the short sale payment is accepted. As used in this subsection, "short sale" means a transaction in which the property that is the subject of a mortgage transaction is sold for an amount that is less than the amount of the debtor's outstanding
obligation under the mortgage transaction. A creditor or mortgage
servicer that fails to respond to an offer within the time prescribed by
this subsection is liable in accordance with 12 U.S.C. 2605(f) in any
action brought under that section.
(2) The seller shall disclose to the buyer to whom credit is extended with respect to a consumer credit sale, and the lessor shall disclose to the lessee with respect to a consumer lease, the information required by the Federal Consumer Credit Protection Act.
(3) For purposes of subsection (2), disclosures shall not be required on a consumer credit sale if the transaction is exempt from the Federal Consumer Credit Protection Act.
(2) With respect to a consumer lease, a lessor may not take a security interest in property of the lessee to secure the debt arising from the lease.
(3) A security interest taken in violation of this section is void.
(4) The amounts of one thousand dollars ($1,000) and three hundred dollars ($300) in subsection (1) are subject to change pursuant to the provisions on adjustment of dollar amounts (IC 24-4.5-1-106).
consumer related loans. The licensing provisions of this chapter
apply to consumer credit sales under IC 24-4.5-2 that are
subordinate lien mortgage transactions.
(a) if the loan is refinanced or consolidated with the same creditor;
(b) for prepayment by proceeds of any insurance or acceleration after default; or
(c) after three (3) years from the contract date.
(2) At the time of prepayment of a consumer loan not subject to the provisions of rebate upon prepayment (IC 24-4.5-3-210), the total finance charge, including the prepaid finance charge but excluding the loan origination fee allowed under IC 24-4.5-3-201, may not exceed the maximum charge allowed under this chapter for the period the loan was in effect. For the purposes of determining compliance with this subsection, the total finance charge does not include the following:
(a) The loan origination fee allowed under IC 24-4.5-3-201.
(b) The debtor paid mortgage broker fee, if any, paid to a person who does not control, is not controlled by, or is not under common control with, the creditor holding the loan at the time a consumer loan is prepaid.
(3) The creditor or mortgage servicer shall provide an accurate payoff of the consumer loan to the debtor within ten (10) calendar days after the creditor or mortgage servicer receives the debtor's written request for the accurate consumer loan payoff amount. A creditor or mortgage servicer who fails to provide the accurate consumer loan payoff amount is liable for:
(a) one hundred dollars ($100) if an accurate consumer loan payoff amount is not provided by the creditor or mortgage servicer within ten (10) calendar days after the creditor or mortgage servicer receives the debtor's first written request; and
(b) the greater of:
(i) one hundred dollars ($100); or
(ii) the loan finance charge that accrues on the loan from the date the creditor or mortgage servicer receives the first written request until the date on which the accurate consumer loan payoff amount is provided;
if an accurate consumer loan payoff amount is not provided by the creditor or mortgage servicer within ten (10) calendar days after the creditor or mortgage servicer receives the debtor's second written request, and the creditor or mortgage servicer failed to comply with subdivision (a).
A liability under this subsection is an excess charge under IC 24-4.5-5-202.
(4) As used in this subsection, "mortgage transaction" means a consumer credit loan in which a mortgage, deed of trust, or a land contract that constitutes a lien is created or retained against land upon which there is a dwelling that is or will be used by the debtor primarily for personal, family, or household purposes. This subsection applies to a mortgage transaction with respect to which any installment or minimum payment due is delinquent for at least sixty (60) days. The creditor, servicer, or the creditor's agent shall acknowledge a written offer made in connection with a proposed short sale not later than ten (10) business days after the date of the offer if the offer complies with the requirements for a qualified written request set forth in 12 U.S.C. 2605(e)(1)(B). The creditor, servicer, or creditor's agent is required to acknowledge a written offer made in connection with a proposed short sale from a third party acting on behalf of the debtor only if the debtor has provided written authorization for the creditor, servicer, or creditor's agent to do so. Not later than thirty (30) business days after receipt of an offer under this subsection, the creditor, servicer, or creditor's agent shall respond to the offer with an acceptance or a rejection of the offer. Payment accepted by a creditor, servicer, or
creditor's agent in connection with a short sale constitutes payment
in full satisfaction of the mortgage transaction unless the creditor,
servicer, or creditor's agent obtains:
(a) the following statement: "The debtor remains liable for
any amount still owed under the mortgage transaction."; or
(b) a statement substantially similar to the statement set forth
in subdivision (a);
acknowledged by the initials or signature of the debtor, on or
before the date on which the short sale payment is accepted. As
used in this subsection, "short sale" means a transaction in which the
property that is the subject of a mortgage transaction is sold for an
amount that is less than the amount of the debtor's outstanding
obligation under the mortgage transaction. A creditor or mortgage
servicer that fails to respond to an offer within the time prescribed by
this subsection is liable in accordance with 12 U.S.C. 2605(f) in any
action brought under that section.
(2) The lender shall disclose to the debtor to whom credit is extended with respect to a consumer loan the information required by the Federal Consumer Credit Protection Act.
(3) For purposes of subsection (2), disclosures shall not be required on a consumer loan if the transaction is exempt from the Federal Consumer Credit Protection Act.
(a) depository institution;
(b) subsidiary that is owned and controlled by a depository institution; or
(c) credit union service organization;
may engage in the making of consumer loans that are not mortgage transactions without obtaining a license under this article.
(2) A collection agency licensed under IC 25-11-1 may engage in:
(a) taking assignments of consumer loans in Indiana; and
(b) undertaking direct collection of payments from or enforcement of rights in Indiana against debtors arising from consumer loans;
without obtaining a license under this article.
(3) A person that does not qualify under subsection (1) or (2) shall acquire and retain a license under this article in order to regularly engage in Indiana in the following actions with respect to consumer loans that are not mortgage transactions:
(a) The making of consumer loans.
(b) Taking assignments of consumer loans.
(c) Undertaking direct collection of payments from or enforcement of rights against debtors arising from consumer loans.
(4) A separate license under this article is required for each legal entity that engages in Indiana in any activity described in subsection (3). However, a separate license under this article is not required for each branch of a legal entity licensed under this article to perform an activity described in subsection (3).
(a) is a depository institution;
(b) is a subsidiary that is owned and controlled by a depository institution and regulated by a federal banking agency;
(c) is an institution regulated by the Farm Credit Administration; or
(d) has first obtained, and subsequently retains, a license from the department under this article;
the person shall not regularly engage in Indiana as a creditor in subordinate lien mortgage transactions, take assignments in Indiana of subordinate lien mortgage transactions, or undertake in the direct collection of payments from or enforcement of rights
against debtors in Indiana arising from subordinate lien mortgage
transactions.
(2) Each:
(a) creditor licensed by the department under this article; and
(b) entity exempt from licensing under this article that
employs a licensed mortgage loan originator;
shall register with and maintain a valid unique identifier issued by
the NMLSR. Each licensed mortgage loan originator must be
employed by, and associated with, a licensed creditor or an exempt
entity described under subdivision (b) in the NMLSR in order to
originate loans.
(3) Applicants for a license must apply for a license under this
chapter in a form prescribed by the director. Each form:
(a) must contain content as set forth by rule, instruction, or
procedure of the director; and
(b) may be changed or updated as necessary by the director
to carry out the purposes of this article.
(4) To fulfill the purposes of this article, the director may
establish relationships or contracts with the NMLSR or other
entities designated by the NMLSR to:
(a) collect and maintain records; and
(b) process transaction fees or other fees;
related to licensees or other persons subject to this article.
(5) For the purpose of participating in the NMLSR, the director
or the department may:
(a) waive or modify, in whole or in part, by rule, regulation,
or order, any or all of the requirements of this article; and
(b) establish new requirements as reasonably necessary to
participate in the NMLSR.
(2) A license shall not be issued unless the department finds that the professional training and experience, financial responsibility, character, and fitness of:
(a) the applicant and any significant affiliate of the applicant;
(b) each executive officer, director, or manager of the applicant, or any other individual having a similar status or performing a similar function for the applicant; and
(c) if known, each person directly or indirectly owning of record or owning beneficially at least ten percent (10%) of the outstanding shares of any class of equity security of the applicant;
are such as to warrant belief that the business will be operated honestly and fairly within the purposes of this article.
(3) The director is entitled to request evidence of compliance with this section at:
(a) the time of application;
(b) the time of renewal of a license; or
(c) any other time considered necessary by the director.
(4) Evidence of compliance with this section concerning a person licensed under section 502 of this chapter may include and under section 502.1 of this chapter must include:
(a) criminal background checks as described in section 503.1 of this chapter, including a national criminal history background check (as defined in IC 10-13-3-12) by the Federal Bureau of Investigation, for any individual described in subsection (2);
(b) credit histories as described in section 503.2 of this chapter;
(c) surety bond requirements as described in section 503.3 of this chapter;
(d) a review of licensure actions in Indiana and other states; and
(5) For purposes of this section and in order to reduce the points of contact that the director may have to maintain under this section, the director may use the NMLSR as a channeling agent for requesting and distributing information to and from any source as directed by the director.
(a) An initial license fee as established by the department under IC 28-11-3-5.
(b)
(c) An annual renewal fee as established by the department under IC 28-11-3-5.
(10) The licensee may deduct the fees required under subsection (8)(a) and (8)(c) from the filing fees paid under IC 24-4.5-6-203.
and repository is subject to the confidentiality provisions of
IC 28-1-2-30 and IC 5-14-3. A person may not:
(i) obtain information from the automated central licensing
system and repository, unless the person is authorized to do so
by statute;
(ii) initiate any civil action based on information obtained
from the automated central licensing system and repository if
the information is not otherwise available to the person under
any other state law; or
(iii) initiate any civil action based on information obtained
from the automated central licensing system and repository if
the person could not have initiated the action based on
information otherwise available to the person under any other
state law.
(c) Documents, materials, and other forms of information in the
control or possession of the automated central licensing system
and repository that are confidential under IC 28-1-2-30 and that
are:
(i) furnished by the director, the director's designee, or a
licensee; or
(ii) otherwise obtained by the automated central licensing
system and repository;
are confidential and privileged by law and are not subject to
inspection under IC 5-14-3, subject to subpoena, subject to
discovery, or admissible in evidence in any civil action. However,
the director or the director's designee may use the documents,
materials, or other information available to the director or the
director's designee in furtherance of any action brought in
connection with the director's duties under this article.
(d) Disclosure of documents, materials, and information:
(i) to the director or the director's designee; or
(ii) by the director or the director's designee;
under this subsection does not result in a waiver of any applicable
privilege or claim of confidentiality with respect to the
documents, materials, or information.
(e) Information provided to the automated central licensing
system and repository is subject to IC 4-1-11.
(f) This subsection does not limit or impair a person's right to:
(i) obtain information;
(ii) use information as evidence in a civil action or proceeding;
or
(iii) use information to initiate a civil action or proceeding;
(2) For purposes of this section and in order to reduce the points of contact that the Federal Bureau of Investigation may have to maintain for purposes of this section, the director may use the NMLSR as a channeling agent for requesting information from and distributing information to the United States Department of Justice or any governmental agency.
(2) The individual must submit personal history and experience information in a form prescribed by the NMLSR, including the submission of authorization for the NMLSR or the director to obtain an independent credit report obtained from a consumer reporting agency described in Section 603(p) of the Fair Credit Reporting Act (15 U.S.C. 1681a(p)).
(3) The director may consider one (1) or more of the following when determining if an individual has demonstrated financial
responsibility:
(a) Bankruptcies filed within the last ten (10) years.
(b) Current outstanding judgments, except judgments solely
as a result of medical expenses.
(c) Current outstanding tax liens or other government liens or
filings.
(d) Foreclosures within the past three (3) years.
(e) A pattern of serious delinquent accounts within the past
three (3) years.
(a) creditor licensed by the department under this article; and
(b) entity exempt from licensing under this article that employs a licensed mortgage loan originator;
must be covered by a surety bond in accordance with this section.
(2) A surety bond:
(a) must provide coverage for:
(i) each creditor described in subsection (1)(a); and
(ii) each exempt entity described in subsection (1)(b);
in an amount as prescribed in subsection (4); and
(b) must be in a form as prescribed by the director.
(3) The director may adopt rules or guidance documents with respect to the requirements for surety bonds as necessary to accomplish the purposes of this article.
(4) The penal sum of the surety bond shall be maintained in an amount that reflects the dollar amount of mortgage transactions originated as determined by the director.
(5) If an action is commenced on the surety bond of a creditor or an entity exempt from licensing under this article as described in subsection (1), the director may require the filing of a new bond.
(6) A creditor or an entity exempt from licensing under this article as described in subsection (1) shall file a new surety bond immediately upon recovery of any action on the surety bond required under this section.
(a) processing applications and renewals for licenses under section 502.1 of this chapter;
(b) issuing unique identifiers for licensees under section 502.1 of this chapter and for entities exempt from licensing under this article that employ licensed mortgage loan originators; and
(c) performing other services that the director determines necessary for the orderly administration of the department's licensing system under section 502.1 of this chapter.
(2) Subject to the confidentiality provisions contained in IC 5-14-3, this section, and IC 28-1-2-30, the director shall regularly report significant or recurring violations of this article related to subordinate lien mortgage transactions to the NMLSR.
(3) Subject to the confidentiality provisions contained in IC 5-14-3, this section, and IC 28-1-2-30, the director may report complaints received regarding licensees under this article related to subordinate lien mortgage transactions to the NMLSR.
(4) The director may report publicly adjudicated licensure actions against licensees under section 502.1 of this chapter to the NMLSR.
(5) The director shall establish a process in which persons licensed in accordance with section 502.1 of this chapter may challenge information reported to the NMLSR by the department.
(6) The director's authority to designate the NMLSR under subsection (1) is subject to the following:
(a) Information stored in the NMLSR is subject to the confidentiality provisions of IC 28-1-2-30 and IC 5-14-3. A person may not:
(i) obtain information from the NMLSR unless the person is authorized to do so by statute;
(ii) initiate any civil action based on information obtained from the NMLSR if the information is not otherwise available to the person under any other state law; or
(iii) initiate any civil action based on information obtained from the NMLSR if the person could not have initiated the action based on information otherwise available to the person under any other state law.
(b) Documents, materials, and other forms of information in the control or possession of the NMLSR that are confidential under IC 28-1-2-30 and that are:
(i) furnished by the director, the director's designee, or a licensee; or
(ii) otherwise obtained by the NMLSR;
are confidential and privileged by law and are not subject to
inspection under IC 5-14-3, subject to subpoena, subject to
discovery, or admissible in evidence in any civil action.
However, the director may use the documents, materials, or
other information available to the director in furtherance of
any action brought in connection with the director's duties
under this article.
(c) Disclosure of documents, materials, and information:
(i) to the director; or
(ii) by the director;
under this subsection does not result in a waiver of any
applicable privilege or claim of confidentiality with respect to
the documents, materials, or information.
(d) Information provided to the NMLSR is subject to
IC 4-1-11.
(e) This subsection does not limit or impair a person's right
to:
(i) obtain information;
(ii) use information as evidence in a civil action or
proceeding; or
(iii) use information to initiate a civil action or proceeding;
if the information may be obtained from the director or the
director's designee under any law.
(f) Except as otherwise provided in the federal Housing and
Economic Recovery Act of 2008, Public Law 110-289, Section
1512, the requirements under any federal law or IC 5-14-3
regarding the privacy or confidentiality of any information or
material provided to the NMLSR, and any privilege arising
under federal or state law, including the rules of any federal
or state court, with respect to the information or material,
continue to apply to the information or material after the
information or material has been disclosed to the NMLSR.
The information and material may be shared with all state
and federal regulatory officials with mortgage industry
oversight authority without the loss of privilege or the loss of
confidentiality protections provided by federal law or
IC 5-14-3.
(g) For purposes of this section, the director may enter
agreements or sharing arrangements with other governmental
agencies, the Conference of State Bank Supervisors, the
American Association of Residential Mortgage Regulators, or
other associations representing governmental agencies as
established by rule or order of the director.
(h) Information or material that is subject to a privilege or confidentiality under subdivision (f) is not subject to:
(i) disclosure under any federal or state law governing the disclosure to the public of information held by an officer or an agency of the federal government or the respective state; or
(ii) subpoena, discovery, or admission into evidence, in any private civil action or administrative process, unless with respect to any privilege held by the NMLSR with respect to the information or material, the person to whom the information or material pertains waives, in whole or in part, in the discretion of the person, that privilege.
(i) Any provision of IC 5-14-3 that concerns the disclosure of:
(i) confidential supervisory information; or
(ii) any information or material described in subdivision (f);
and that is inconsistent with subdivision (f) is superseded by this section.
(j) This section does not apply with respect to information or material that concerns the employment history of, and publicly adjudicated disciplinary and enforcement actions against, a person licensed in accordance with section 502.1 of this chapter and described in section 503(2) of this chapter and that is included in the NMLSR for access by the public.
(k) The director may require a licensee required to submit information to the NMLSR to pay a processing fee considered reasonable by the director. In determining whether an NMLSR processing fee is reasonable, the director shall:
(i) require review of; and
(ii) make available;
the audited financial statements of the NMLSR.
(a) If the creditor is licensed in accordance with section 502 of this chapter, the creditor has:
(i) paid all required fees for renewal of the license; and
(ii) filed all reports and information required by the
director.
(b) If the creditor is licensed under section 502.1 of this
chapter, the following:
(i) The creditor has continued to meet the surety bond
requirement under section 503.3 of this chapter.
(ii) The creditor has filed the creditor's annual call report
in a manner that satisfies section 505(4) of this chapter.
(iii) The creditor has paid all required fees for renewal of
the license.
(iv) The creditor and individuals described in section
503(2) of this chapter continue to meet all the standards
for licensing established under section 503 of this chapter.
(v) The creditor has filed all reports and information
required by the director.
(2) A license issued by the department authorizing a person to
engage as a creditor in consumer loans or consumer credit sales
under this article may be suspended by the department if the
person fails to:
(a) file any renewal form required by the department; or
(b) pay any license renewal fee described under section
503(8)(c) of this chapter;
not later than sixty (60) days after the due date.
(3) A person whose license is suspended under this section may
do either of the following:
(a) Pay all delinquent fees and apply for reinstatement of the
license.
(b) Appeal the suspension to the department for an
administrative review under IC 4-21.5-3. The license remains
in force pending the decision resulting from the hearing under
IC 4-21.5-3.
(a) the licensee has repeatedly and willfully violated this article
or any rule, or order, or guidance document lawfully made
pursuant to this article;
(b) the licensee has repeatedly and willfully violated any other
state or federal consumer credit laws, or rules, or regulations;
(c) the licensee does not meet the licensing qualifications
under section 503 of this chapter; or
(c) (d) facts or conditions exist which would clearly have justified
the department in refusing to grant a license had these facts or
conditions been known to exist at the time the application for the
license was made.
(2) Except as provided in section 503.5 section 503.6(2) and
503.6(3) of this chapter, no revocation or suspension of a license is
lawful unless prior to institution of proceedings by the department
notice is given to the licensee of the facts or conduct which warrant the
intended action, and the licensee is given an opportunity to show
compliance with all lawful requirements for retention of the license.
(3) If the department finds that probable cause for revocation of a
license exists and that enforcement of this article requires immediate
suspension of the license pending investigation, the department may,
after a hearing upon five (5) days written notice to the licensee, enter
an order suspending the license for not more than thirty (30) days.
(4) Whenever the department revokes or suspends a license, the
department shall enter an order to that effect and forthwith notify the
licensee of the revocation or suspension. Within five (5) days after the
entry of the order the department shall deliver to the licensee a copy of
the order and the findings supporting the order.
(5) Any person holding a license to make consumer loans may
relinquish the license by notifying the department in writing of its
relinquishment, but this relinquishment shall not affect the person's
liability for acts previously committed.
(6) If the director determines it is in the public interest, the
director may pursue revocation of a license of a licensee that has
relinquished the license under subsection (5).
(6) (7) No revocation, suspension, or relinquishment of a license
shall impair or affect the obligation of any preexisting lawful contract
between the licensee and any debtor.
(7) (8) The department may reinstate a license or terminate a
suspension or grant a new of a license to a person whose license has
been revoked or suspended if the director determines that, at the
time the determination is made, no fact or condition then exists
which clearly would have justified the department in refusing to grant
reinstate a license.
(a) has just cause to believe an emergency exists from which it is necessary to protect the interests of the public; or
(b) determines that the license was obtained for the benefit of, or on behalf of, a person who does not qualify for a license;
the director may proceed with the revocation of the license under IC 4-21.5-3-6.
(2) The unique identifier of any person originating a mortgage transaction must be clearly shown on all mortgage transaction application forms and any other documents as required by the director.
(3) Every licensee that engages in mortgage transactions shall use automated examination and regulatory software designated by the director, including third party software. Use of the software consistent with guidance documents and policies issued by the director is not a violation of IC 28-1-2-30.
(4) Each:
(a) creditor that is licensed by the department under this article and that engages in mortgage transactions; and
(b) entity that is exempt from licensing under this article and that employs one (1) or more licensed mortgage loan originators;
shall submit to the NMLSR a call report, which must be in the form and contain information the NMLSR requires.
(a) has a change in name, address, or principals;
(b) opens a new branch, closes an existing branch, or relocates an existing branch;
(c) files for bankruptcy or reorganization; or
(d) is subject to revocation or suspension proceedings by a state or governmental authority with regard to the licensee's activities;
not later than thirty (30) days after the date of the event described in this subsection.
(2) The provision on cancellation by a creditor (IC 24-4.5-4-304) applies to loans the primary purpose of which is the financing of insurance. No other provision of this chapter applies to insurance so financed.
(3) This chapter supplements and does not repeal IC 27-8-4 (the credit insurance act). The provisions of this article concerning administrative controls, liabilities, and penalties do not apply to persons acting as insurers, and the similar provisions of IC 27-8-4 do not apply to creditors and debtors.
(1) consumer credit sale includes a sale
(2) consumer loan includes a loan
(2) A person
(3) A person who knowingly:
(a) engages in the business of making consumer credit sales, consumer leases, or consumer loans, or of taking assignments of rights against debtors; and
(b) undertakes direct collection of payments or enforcement of these rights, without complying with the provisions of this article concerning notification (IC 24-4.5-6-202) or payment of fees (IC 24-4.5-6-203);
commits a Class A infraction.
(1) make or solicit consumer credit sales, consumer leases, consumer loans, consumer related sales (IC 24-4.5-2-602) and
consumer related loans (IC 24-4.5-3-602); or
(2) directly collect payments from or enforce rights against
debtors arising from sales, leases, or loans specified in subsection
(1), wherever they are made.
(b) For purposes of IC 24-4.5-6-101 through IC 24-4.5-6-117:
(1) "Consumer credit sale" includes a sale of an interest in land
which is a mortgage transaction that is a first lien mortgage
transaction if the sale is otherwise a consumer credit sale.
(2) "Consumer loan" includes a loan secured by an interest in land
which is a mortgage transaction that is a first lien mortgage
transaction if the loan is otherwise a consumer loan.
(2) If the department receives a complaint or other information concerning noncompliance with this article by a
(3) The department and any official or agency of this state having supervisory authority over a
are being complied with by persons engaging in acts subject to this
article, the department may examine the records of persons and may
make investigations of persons as may be necessary to determine
compliance. Records subject to examination under this section include
the following:
(a) Training, operating, and policy manuals.
(b) Minutes of:
(i) management meetings; and
(ii) other meetings.
(c) Other records that the department determines are necessary to
perform its investigation or examination.
The department may also administer oaths or affirmations, subpoena
witnesses, and compel their the attendance of witnesses, including
directors, executive officers, managers, principals, mortgage loan
originators, employees, independent contractors, agents, and
customers of the licensee, individual, or person subject to this
article. The department may also adduce evidence, and require the
production of any matter which is relevant to the investigation. The
department shall determine the sufficiency of the records maintained
and whether the person has made the required information reasonably
available. The records pertaining to any transaction subject to this
article shall be retained for two (2) years after making the final entry
relating to the consumer credit transaction, but in the case of a
revolving loan account or revolving charge account, the two (2) years
is measured from the date of each entry.
(2) The department's examination and investigatory authority
under this article includes the following:
(a) The authority to require a creditor to refund overcharges
resulting from the creditor's noncompliance with the terms of
a subordinate lien mortgage transaction.
(b) The authority to require a creditor to comply with the
penalty provisions set forth in IC 24-4.5-3-209.
(c) The authority to investigate complaints filed with the
department by debtors.
(2) (3) If the department:
(a) investigates; or
(b) examines the books and records of;
a person that is subject to IC 24-4.5-6-201, IC 24-4.5-6-202, and
IC 24-4.5-6-203, the person shall pay all reasonably incurred costs of
the investigation or examination in accordance with the fee schedule
adopted by the department under IC 28-11-3-5. However, the person is
liable for the costs of an investigation or examination under this
subsection only to the extent that the costs exceed the amount of the
filing fees paid most recently under IC 24-4.5-6-203. Any costs
required to be paid under this subsection shall be paid not later than
sixty (60) days after the person receives a notice from the department
of the costs being assessed. The department may impose a fee, in an
amount fixed by the department under IC 28-11-3-5, for each day that
the assessed costs are not paid, beginning on the first day after the sixty
(60) day period described in this subsection.
(3) (4) The department shall be given free access to the records
wherever located. In making any examination or investigation
authorized by this article, the director may control access to any
documents and records of the licensee or person under
examination or investigation. The director may take possession of
the documents and records or place a person in exclusive charge of
the documents and records in the place where the documents are
usually kept. During the period of control, the licensee or person
may not remove or attempt to remove any of the documents and
records except under a court order or with the consent of the
director. Unless the director has reasonable grounds to believe the
documents or records of the licensee or person have been, or are,
at risk of being altered or destroyed for purposes of concealing a
violation of this article, the licensee or person being examined or
investigated is entitled to access to the documents or records as
necessary to conduct the licensee's or person's ordinary business
affairs. If the person's records are located outside Indiana, the records
shall be made available to the department at a convenient location
within Indiana, or the person shall pay the reasonable and necessary
expenses for the department or its representative to examine them
where they are maintained. The department may designate comparable
officials of the state in which the records are located to inspect them on
behalf of the department.
(4) (5) Upon a person's failure without lawful excuse to obey a
subpoena or to give testimony and upon reasonable notice to all
affected persons, affected thereby, the department may apply to any
civil court with jurisdiction for an order compelling compliance.
(5) (6) The department shall not make public the name or identity
of a person whose acts or conduct the department investigates pursuant
to this section or the facts disclosed in the investigation, but this
subsection does not apply to disclosures in actions or enforcement
proceedings pursuant to this article.
(7) If a creditor contracts with an outside vendor to provide a
service that would otherwise be undertaken internally by the
creditor and be subject to the department's routine examination
procedures, the person that provides the service to the creditor
shall, at the request of the director, submit to an examination by
the department. If the director determines that an examination
under this subsection is necessary or desirable, the examination
may be made at the expense of the person to be examined. If the
person to be examined under this subsection refuses to permit the
examination to be made, the director may order any creditor that
is licensed under this article and that receives services from the
person refusing the examination to:
(a) discontinue receiving one (1) or more services from the
person; or
(b) otherwise cease conducting business with the person.
(a) retain attorneys, accountants, or other professionals and specialists as examiners, auditors, or investigators to conduct or assist in the conduct of examinations or investigations;
(b) enter into agreements or relationships with other government officials or regulatory associations to improve efficiencies and reduce regulatory burden by sharing:
(i) resources;
(ii) standardized or uniform methods or procedures; and
(iii) documents, records, information, or evidence obtained under this section;
(c) use, hire, contract, or employ public or privately available analytical systems, methods, or software to examine or investigate a licensee, an individual, or a person subject to this article;
(d) accept and rely on examination or investigation reports made by other government officials, in or outside Indiana; or
(e) accept audit reports made by an independent certified public accountant for the licensee, individual, or person subject to this article in the course of that part of the examination covering the same general subject matter as the audit and may incorporate the audit report in the report of the examination, report of investigation, or other writing of the director.
otherwise provided, IC 4-21.5-3 governs all agency action taken by the
department under IC 24-4.5-6 this chapter or IC 24-4.5-3-501 through
IC 24-4.5-3-513. All proceedings for administrative review under
IC 4-21.5-3 or judicial review under IC 4-21.5-5 shall be held in
Marion County. The provisions of IC 4-22-2 prescribing procedures
for the adoption of rules by agencies shall apply to the adoption of rules
by the department of financial institutions under this article. However,
if the department declares an emergency in the document containing
the rule, it may adopt rules permitted by IC 24-4.5-6 this chapter
under IC 4-22-2-37.1.
(a) directly or indirectly employ any scheme, device, or artifice to defraud or mislead borrowers or lenders or to defraud any person;
(b) engage in any unfair or deceptive practice toward any person;
(c) obtain property by fraud or misrepresentation;
(d) solicit or enter into a contract with a borrower that provides in substance that the person or individual subject to this article may earn a fee or commission through "best efforts" to obtain a loan even though no loan is actually obtained for the borrower;
(e) solicit, advertise, or enter into a contract for specific interest rates, points, or other financing terms unless the terms are actually available at the time of soliciting, advertising, or contracting;
(f) conduct any business covered by this article without holding a valid license as required under this article, or assist or aid and abet any person in the conduct of business under this article without a valid license as required under this article;
(g) fail to make disclosures as required by this article and any other applicable state or federal law, including regulations under that law;
(h) fail to comply with this article or rules adopted under this article, or fail to comply with any other state or federal law, rule, or regulation, applicable to any business authorized or conducted under this article;
(i) make, in any manner, any false or deceptive statement or
representation, including, with regard to the rates, points, or
other financing terms or conditions for a mortgage
transaction, or engage in bait and switch advertising;
(j) negligently make any false statement or knowingly and
willfully make any omission of material fact in connection
with any information or reports filed with a governmental
agency or the NMLSR or in connection with any investigation
conducted by the director or another governmental agency;
(k) make any payment, threat, or promise, directly or
indirectly, to any person for the purposes of influencing the
independent judgment of the person in connection with a
mortgage transaction, or make any payment, threat, or
promise, directly or indirectly, to any appraiser of a property,
for the purposes of influencing the independent judgment of
the appraiser with respect to the value of the property;
(l) collect, charge, attempt to collect or charge, or use or
propose any agreement purporting to collect or charge any
fee prohibited by this article;
(m) cause or require a borrower to obtain property insurance
coverage in an amount that exceeds the replacement cost of
the improvements as established by the property insurer;
(n) fail to account truthfully for money belonging to a party
to a mortgage transaction; or
(o) knowingly withhold, abstract, remove, mutilate, destroy,
or secrete any books, records, computer records, or other
information subject to examination under this article.
(2) Within thirty (30) days after service of the petition for review upon the department, or within any further time the court may allow, the department shall transmit to the court the original or a certified copy of the entire record upon which the order is based, including any transcript of testimony, which need not be printed. By stipulation of all
parties to the review proceeding, the record may be shortened. After
hearing the court may (a) reverse or modify the order if the findings of
fact of the department are clearly erroneous in view of the reliable,
probative, and substantial evidence on the whole record, (b) grant any
temporary relief or restraining order it deems just, and (c) enter an
order enforcing, modifying, and enforcing as modified, or setting aside
in whole or in part the order of the department, or remanding the case
to the department for further proceedings.
(3) An objection not urged at the hearing shall not be considered by
the court unless the failure to urge the objection is excused for good
cause shown. A party may move the court to remand the case to the
department in the interest of justice for the purpose of adducing
additional specified and material evidence and seeking finding thereon
upon good cause shown for the failure to adduce this evidence before
the department.
(4) The jurisdiction of the court shall be exclusive and its final
judgment or decree shall be subject to review by the court on appeal in
the same manner and form and with the same effect as in appeals from
a final judgment or decree. The department's copy of the testimony
shall be available at reasonable times to all parties for examination
without cost.
(5) A proceeding for review under this section must be initiated
within thirty (30) days after a copy of the order of the department is
received. If no proceeding is so initiated, the department may obtain a
decree of the civil court for enforcement of its order upon a showing
that an order was issued in compliance with this section, that no
proceeding for review was initiated within thirty (30) days after copy
of the order was received, and that the respondent is subject to the
jurisdiction of the court.
(6) With respect to unconscionable agreements or fraudulent or
unconscionable conduct by the respondent, the department may not
issue an order pursuant to this section but may bring a civil action for
an injunction (IC 24-4.5-6-111).
making or collecting charges in excess of those permitted by this
article. An action may relate to transactions with more than one debtor.
If it is found that an excess charge has been made, the court shall order
the respondent to refund to the debtor or debtors the amount of the
excess charge. If a creditor has made an excess charge in deliberate
violation of or in reckless disregard for this article, or if a creditor has
refused to refund an excess charge within a reasonable time after
demand by the debtor or the department, the court may also order the
respondent to pay to the debtor or debtors a civil penalty in an amount
determined by the court not in excess of the greater of either the
amount of the credit service or loan finance charge or ten (10) times the
amount of the charge. Refunds and penalties to which the debtor is
entitled pursuant to this subsection may be set off against the debtor's
obligation. If a debtor brings an action against a creditor to recover an
excess charge or civil penalty, an action by the department to recover
for the same excess charge or civil penalty shall be stayed while the
debtor's action is pending and shall be dismissed if the debtor's action
is dismissed with prejudice or results in a final judgment granting or
denying the debtor's claim. With respect to excess charges arising from
sales made pursuant to revolving charge accounts or from loans made
pursuant to revolving loan accounts, no action pursuant to this
subsection may be brought more than two (2) years after the time the
excess charge was made. With respect to excess charges arising from
other consumer credit sales or consumer loans, no action pursuant to
this subsection may be brought more than one (1) year after the due
date of the last scheduled payment of the agreement pursuant to which
the charge was made. If the creditor establishes by a preponderance of
evidence that a violation is unintentional or the result of a bona fide
error, no liability to pay a penalty shall be imposed under this
subsection.
(2) The department may bring a civil action against a creditor or a
person acting in his behalf to recover a civil penalty for willfully
violating this article, and if the court finds that the defendant has
engaged in a course of repeated and willful violations of this article, it
may assess a civil penalty of no more than five thousand dollars
($5,000). No civil penalty pursuant to this subsection may be imposed
for violations of this article occurring more than two (2) years before
the action is brought or for making unconscionable agreements or
engaging in a course of fraudulent or unconscionable conduct.
(3) If the department determines, after notice and opportunity for
hearing, the person to be heard, that a person has violated this article,
the department may, in addition to or instead of all other remedies
available under this section, impose upon the person a civil penalty not
greater than ten thousand dollars ($10,000) per violation.
(2) has committed fraudulent or unconscionable conduct; or
(3) has been convicted of or has pleaded guilty or nolo contendere to a felony under the laws of Indiana or any other jurisdiction;
the director may issue and serve upon the person a notice of charges and of the director's intent to issue an order removing the person from the person's office or employment, an order prohibiting participation by the person in the conduct of the affairs of any creditor, or an order both removing the person and prohibiting the person's participation.
(b) A violation, practice, or breach described in subsection (a) is subject to the authority of the director under subsection (a) if the director finds any of the following:
(1) The interests of the creditor's customers could be seriously prejudiced by reason of the violation, practice, or breach.
(2) The violation, practice, or breach involves personal dishonesty on the part of the officer, director, or employee involved.
(3) The violation, practice, or breach demonstrates a willful or continuing disregard by the officer, director, or employee for state or federal law and regulations, and for the consumer protections contained in this article.
(c) A person who:
(1) has been convicted of; or
(2) has pleaded guilty or nolo contendere to;
a felony under the laws of Indiana or any other jurisdiction may not serve as an officer, a director, or an employee of a creditor, or serve in any similar capacity, unless the person obtains the written consent of the director.
(d) A creditor that willfully permits a person to serve the
creditor in violation of subsection (c) is subject to a civil penalty of
five hundred dollars ($500) for each day the violation occurs.
(1) be in writing;
(2) contain a statement of:
(A) the facts constituting the alleged violation, practice, or breach;
(B) the facts alleged in support of the violation, practice, or breach; and
(C) the director's intention to issue an order under section 122(a) of this chapter;
(3) be delivered to the board of directors of the creditor;
(4) be delivered to the officer, director, or employee to which the notice applies;
(5) specify the procedures that must be followed to initiate a hearing to contest the alleged violation, practice, or breach; and
(6) if the director suspends or prohibits the officer, director, or employee from participation in the affairs of the creditor as described under subsection (e), a statement of the suspension or prohibition.
(b) If a hearing is requested not later than ten (10) days after service of the notice described under subsection (a), the department shall hold a hearing concerning the alleged violation, practice, or breach. The hearing shall be held not later than forty-five (45) days after receipt of the request. The department, based on the evidence presented at the hearing, shall enter a final order in accordance with section 122 of this chapter.
(c) If no hearing is requested within the period of time specified in subsection (b), the director may proceed to issue a final order under section 122 of this chapter on the basis of the facts set forth in the notice described under subsection (a). (d) An officer, director, or employee of a creditor who is removed from a position under a removal order under section 122 of this chapter that has become final may not, without the approval of the director, participate in the conduct of the affairs of a licensee described under IC 24-4.5-3.
(e) The director may, for the protection of the creditor or the interests of the creditor's customers, suspend from office or
prohibit from participation in the affairs of the creditor an officer,
a director, or an employee of a creditor who is the subject of a
written notice served by the director under section 119(a) of this
chapter. A suspension or prohibition under this subsection becomes
effective upon service of the notice under section 119(a) of this
chapter. Unless stayed by a court in a proceeding authorized by
subsection (f), the suspension or prohibition remains in effect
pending completion of the proceedings related to the notice served
under section 119(a) of this chapter and until the effective date of
an order entered by the department under subsection (b) or the
director under subsection (c). If the director suspends or prohibits
participation of an officer, a director, or an employee under this
subsection, copies of the notice shall also be served upon the
creditor or affiliate of which the person is an officer, a director, or
an employee.
(f) Not more than fifteen (15) days after an officer, a director, or
an employee has been suspended from office or prohibited from
participation in the conduct of the affairs of the creditor or affiliate
under subsection (e), the officer, director, or employee may apply
to a court having jurisdiction for a stay of the suspension or
prohibition pending completion of the proceedings related to the
notice served under section 119(a) of this chapter. The court may
stay a suspension of prohibition of the officer, director, or
employee.
(g) The department shall maintain an official record of a
proceeding under this chapter.
section 119 of this chapter, the department may issue a final order.
If a hearing is not requested within the time specified in section
120(b) of this chapter, the director may issue a final order on the
basis of the facts set forth in the written notice served under section
119(a) of this chapter.
(b) Unless the director has entered into a consent agreement
described in section 121 of this chapter, a final order must include
separately stated findings of fact and conclusions of law for all
aspects of the order.
(c) In a final order under this section, the department or the
director, as appropriate, may order one (1) or more of the
following with respect to an officer, a director, or an employee of
a creditor:
(1) The removal of the officer, director, or employee from the
person's office, position, or employment.
(2) A prohibition against any participation by the officer,
director, or employee in the conduct of the affairs of any
creditor.
(3) If the subject of the order is an officer or a director of a
creditor, and subject to section 124 of this chapter, the
imposition of a civil penalty not to exceed fifteen thousand
dollars ($15,000) for each practice, violation, or act that:
(A) is described in section 119 of this chapter; and
(B) found to exist by the department or the director.
(d) A final order shall be issued in writing not later than ninety
(90) days after conclusion of a hearing held under section 120(b) of
this chapter, unless this period is waived or extended with the
written consent of all parties or for good cause shown.
(e) If the officer, director, or employee does not appear
individually or by an authorized representative at a hearing held
under section 120(b) of this chapter, the officer, director, or
employee is considered to have consented to the issuance of a final
order.
(f) The director may keep a final order confidential if the
director determines that the immediate release of the order would
endanger the stability of the creditor. However, after two (2) years
following the date that an order is issued, a final order is no longer
confidential.
(g) The remedies provided in this chapter are in addition to
other remedies contained in this article.
[EFFECTIVE JULY 1, 2010]: Sec. 123. (a) A final order issued
under section 122 of this chapter is effective the eleventh day after
the date the order is served. However, a final order issued upon
consent under section 121 of this chapter is effective at the time
specified in the order.
(b) A final order remains effective and enforceable as provided
in the order.
(c) The department or a reviewing court may stay, modify, or
vacate a final order.
(1) The appropriateness of the civil penalty with respect to the financial resources and good faith of the individual charged.
(2) The gravity of the practice, violation, or breach.
(3) The history of previous practices, violations, or breaches.
(4) The economic benefit derived by the individual from the practice, violation, or breach.
(5) Other factors that justice requires.
(b) A creditor may not indemnify a director or an officer for a civil penalty imposed against the director or officer under this section.
(c) Civil penalties shall be deposited in the financial institutions fund established by IC 28-11-2-9.
(1) An order issued under section 121 or 122 of this chapter.
(2) A written agreement entered into by the director or the department and a director, an officer, or an employee of a creditor.
(3) Any condition imposed in writing by the director or the department on a director, an officer, or an employee of a creditor.
JULY 1, 2010]: Sec. 201. (1) This section IC 24-4.5-6-202, and
IC 24-4.5-6-203 sections 202 and 203 of this chapter apply to a
person, including a supervised financial organization, depository
institution, but not including a collection agency licensed under
IC 25-11-1, engaged in Indiana in any of the following:
(a) Making consumer credit sales, consumer leases, or consumer
loans.
(b) Taking assignments of rights against debtors that arise from
sales, leases, or loans by a person having an office or a place of
business in Indiana.
(c) Undertaking direct collection of payments from the debtors or
enforcement of rights against the debtors.
(d) Placing consumer credit insurance, receiving commissions for
consumer credit insurance, or acting as a limited line credit
insurance producer in the sale of consumer credit insurance.
(e) Selling insurance or other benefits, the charges for which are
approved by the department as additional charges under
IC 24-4.5-2-202 or IC 24-4.5-3-202.
(2) This section IC 24-4.5-6-202, and IC 24-4.5-6-203 and sections
202 and 203 of this chapter are not applicable to a seller whose credit
sales consist entirely of sales made pursuant to a seller credit card
issued by a person other than the seller if the issuer of the card has
complied with the provisions of this section IC 24-4.5-6-202, and
IC 24-4.5-6-203. and sections 202 and 203 of this chapter.
(3) This section IC 24-4.5-6-202, and IC 24-4.5-6-203 and sections
202 and 203 of this chapter apply to a seller whose credit sales are
made using credit cards that:
(a) are issued by a lender;
(b) are in the name of the seller; and
(c) can be used by the buyer or lessee only for purchases or leases
at locations of the named seller.
(a) name of the person;
(b) name in which business is transacted if different from subdivision (a);
(c) address of principal office, which may be outside Indiana; and
(d) address of all offices or retail stores, if any, in Indiana at which consumer credit sales, consumer leases, or consumer loans are made, or in the case of a person taking assignments of obligations, the offices or places of business within Indiana at which business is transacted.
(2) A person required to be licensed under this article shall file the notification required by subsection (1) not later than December 31 of each year. All other persons subject to this section shall file the notification required by subsection (1) not later than January 31 of each year.
(3) Persons subject to
(a) has a change in name, address, or principals;
(b) opens a new branch, closes an existing branch, or relocates an existing branch;
(c) files for bankruptcy or reorganization;
(d) is notified that the person is subject to revocation or suspension proceedings by a state or governmental authority with regard to the person's activities; or
(2) This chapter applies to:
(a) a lender or to any person who facilitates, enables, or acts as a conduit for any person who is or may be exempt from licensing under IC 24-4.5-3-502;
(b) a bank, savings association, credit union, or other state or federally regulated financial institution except those that are specifically exempt regarding limitations on interest rates and fees; or
(c) a person, if the department determines that a transaction is:
(i) in substance a disguised loan; or
(ii) the application of subterfuge for the purpose of avoiding this chapter.
(3) A loan that:
(a) does not qualify as a small loan under
(b) is for a term shorter than that specified in
(c) is made in violation of
is subject to this article. The department may conform the finance charge for a loan described in this subsection to the limitations set forth in IC 24-4.5-3-508.
(2) In addition to the requirements of subsection (1), the lender must conspicuously display in bold type a notice to the public both in the lending area of each business location and in the loan documents the following statement:
"WARNING: A small loan is not intended to meet long term financial needs. A small loan should be used only to meet short term cash needs. The cost of your small loan may be higher than loans offered by other lending institutions. Small loans are regulated by the State of Indiana Department of Financial Institutions.
A borrower may rescind a small loan without cost
(3) The statement required in subsection (2) must be in:
(a) 14 point bold face type in the loan documents; and
(b) not less than one (1) inch bold print in the lending area of the business location.
(4) When a borrower enters into a small loan, the lender shall provide the borrower with a pamphlet approved by the department that describes:
(a) the availability of debt management and credit counseling services; and
(b) the borrower's rights and responsibilities in the transaction.
(a) the principal amount and finance charges of the small loan to be issued; plus
(b) any other small loan balances that the borrower has outstanding with any lender;
exceeds twenty percent (20%) of the borrower's monthly gross income.
(2) A small loan may be secured by only one (1) check or authorization to debit the borrower's account per small loan. The check or electronic debit may not exceed the amount advanced to or on behalf of the borrower plus loan finance charges contracted for and permitted.
(3) A borrower may make partial payments in any amount on the small loan without charge at any time before the due date of the small loan. After each payment is made on a small loan, whether the payment is in part or in full, the lender shall give a signed and dated receipt to the borrower making a payment showing the amount paid and the balance due on the small loan.
(4) The lender shall provide to each borrower a copy of the required loan documents before the disbursement of the loan proceeds.
(5) A borrower may rescind a small loan without cost
(6) A lender shall not enter into a renewal with a borrower. If a loan is paid in full, a subsequent loan is not a renewal.
(2) With respect to a small loan, no lender may permit a person to become obligated under more than one (1) loan agreement with the
lender at any time.
(3) A lender shall not make a small loan that, when combined with
the outstanding balance on another outstanding small loan owed to
another lender, exceeds a total of five hundred fifty dollars ($550),
excluding finance charges. A lender shall not make a small loan to a
borrower who has two (2) or more small loans outstanding, regardless
of the total value of the small loans. The amount of five hundred fifty
dollars ($550) in this subsection is subject to change under the
provisions on adjustment of dollar amounts (IC 24-4.5-1-106).
However, notwithstanding IC 24-4.5-1-106(1), the Reference Base
Index to be used under this subsection is the Index for October 2006.
(4) A lender complies with subsection (3) if the borrower represents
in writing that the borrower does not have any outstanding small loans
with the lender, another lender, an affiliate of the lender or another
lender, or a separate entity involved in a business association with the
lender or another lender in making small loans, and the lender
independently verifies the accuracy of the borrower's written
representation total number of outstanding small loans and the total
outstanding balance of those small loans for a customer through a
commercially reasonable method of verification. A lender's method of
verifying whether a borrower has any outstanding small loans and the
total outstanding balance of any loans will be considered
commercially reasonable if the method includes a manual investigation
or an electronic query of:
(a) the lender's own records, including both records maintained at
the location where the borrower is applying for the transaction
and records maintained at other locations within the state that are
owned and operated by the lender; and
(b) an available third party data base provided by a private
consumer reporting service, subject to the identification
verification requirements set forth in subsection (12).
(5) The department shall monitor the effectiveness of private
consumer credit reporting services in providing the verification
information required under subsection (4). If the department
determines that a commercially reasonable method of verification is
available, the department shall:
(a) provide reasonable notice to all lenders identifying the
commercially reasonable method of verification that is available;
and
(b) require each lender to use, consistent with the policies of the
department, the identified commercially reasonable method of
verification as a means of complying with subsection (4).
(6) If a borrower presents evidence to a lender that a loan has been discharged in bankruptcy, the lender shall cause the record of the borrower's loan to be updated in the data base described in subsection (4)(b) to reflect the bankruptcy discharge.
(7) A lender shall cause the record of a borrower's loan to be updated in the data base described in subsection (4)(b) to reflect:
(a) presentment of the borrower's check for payment; or
(b) exercise of the borrower's authorization to debit the borrower's account.
If a check is returned or an authorization is dishonored because of insufficient funds in the borrower's account, the lender shall reenter the record of the loan in the data base.
(8) A lender shall update information in a data base described in subsection (4)(b) to reflect partial payments made on an outstanding loan, the record of which is maintained in the data base.
(9) If a lender ceases doing business in Indiana, the director may require the operator of the data base described in subsection (4)(b) to remove records of the lender's loans from the operator's data base.
(10) The director may impose a civil penalty not to exceed one hundred dollars ($100) for each violation of:
(a) this section; or
(b) any rule or policy adopted by the director to implement this section.
(11) The excess amount of loan finance charge provided for in agreements in violation of this section is an excess charge for purposes of the provisions concerning effect of violations on rights of parties (IC 24-4.5-5-202) and the provisions concerning civil actions by the department (IC 24-4.5-6-113).
(12) If a borrower provides the borrower's Social Security number to a lender in connection with any transaction or proposed transaction under this chapter, the lender shall:
(a) maintain procedures to verify that the Social Security number provided is legitimate and belongs to the borrower; and
(b) retain copies of any documents used to verify the borrower's Social Security number. Documentation under this subdivision may be in electronic form and the numbers may be truncated.
If a borrower does not have a Social Security number, the lender may require and accept another valid form of government issued identification, subject to the requirements of subdivisions (a) and (b) with respect to the government issued identification accepted.
"This check is being negotiated as part of a small loan under IC 24-4.5, and any holder of this check takes it subject to the claims and defenses of the maker.".
(2) A bond posted under subsection (1) must continue in effect for two (2) years after the lender ceases operation in Indiana. The bond must be available to pay damages and penalties to a consumer harmed by a violation of this chapter.
(b) The term includes the following:
(1) A home loan subject to IC 24-9.
(2) A loan described in IC 24-9-1-1, to the extent allowed under federal law.
(3) A first lien mortgage transaction (as defined in
(4) A consumer credit sale subject to IC 24-4.5-2 in which a mortgage, deed of trust, or land contract that constitutes a lien is created or retained against an interest in real property in Indiana.
(5) A consumer credit loan subject to IC 24-4.5-3 in which a mortgage, deed of trust, or land contract that constitutes a lien is created or retained against an interest in real property in Indiana.
(6) A loan in which a mortgage, deed of trust, or land contract that constitutes a lien is created or retained against land:
(A) that is located in Indiana;
(B) upon which there is a dwelling that is not or will not be
used by the borrower primarily for personal, family, or
household purposes; and
(C) that is classified as residential for property tax purposes.
The term includes a loan that is secured by land in Indiana upon
which there is a dwelling that is purchased by or through the
borrower for investment or other business purposes.
(b) If a lessee makes a payment that exceeds the sum of the scheduled rental payment and any permitted additional charges that are due, the lessor may hold the excess funds in a reserve account subject to the following conditions:
(1) The balance of the lessee's reserve account may not exceed the amount of the next scheduled rental payment.
(2) If the balance in the lessee's reserve account reaches the limit specified in subdivision (1), the lessor shall apply the funds to the lessee's next scheduled rental payment.
(c) This section may not be construed to preclude a lessor from accepting and applying multiple rental payments before the rental payments' scheduled due dates.
(1) Receive and act on complaints, take action designed to obtain voluntary compliance with this article, or commence proceedings on the department's own initiative.
(2) Issue and enforce administrative orders under IC 4-21.5.
(3) Counsel persons and groups on their rights and duties under this article.
(4) Establish programs for the education of consumers with respect to rental purchase agreement practices and problems.
(5) Make studies appropriate to effectuate the purposes and policies of this article and make the results available to the public.
(6) Adopt rules under IC 4-22-2, including emergency rules under IC 4-22-2-37.1, to carry out this article.
(7) Maintain more than one (1) office within Indiana.
(8) Bring a civil action to restrain a person from violating this article and for other appropriate relief.
(9) Impose a civil penalty under IC 4-21.5 of not more than
(1) The name of the lessee.
(2) The date of each transaction.
(3) The total amount of each payment.
(4) A breakdown of each payment reflecting:
(A) each type of charge; and
(B) the amount of each type of charge.
The method of maintaining this data is at the discretion of the lessor, if hard copies of the required data are readily available. The record keeping system of the lessor shall be made available in Indiana for examination. The director shall determine the sufficiency of the records and whether the lessor has made the required information reasonably available.
(b) In administering this article and in order to determine compliance with this article, the department or the department's representative may examine the books and records of persons subject to the article and may make investigations of persons necessary to determine compliance. For this purpose, the department may administer oaths or affirmations, and, upon the department's own motion or upon request of any party, may subpoena witnesses, compel their attendance, compel testimony, and require the production of any matter that is relevant to the investigation, including the existence, description, nature, custody, condition, and location of any books, documents, or other tangible things and the identity and location of persons having knowledge of relevant facts, or any other matter reasonably calculated to lead to the discovery of admissible evidence.
(c) If the person's records are located outside Indiana, the person shall, at the person's option, either make them available to the department at a convenient location in Indiana, or pay the reasonable and necessary expenses for the department or the department's representative to examine them at the place where they are maintained. The department may designate representatives, including comparable officials of the state in which the records are located, to inspect them on the department's behalf.
(d) Upon failure without lawful excuse to obey a subpoena or to give testimony and upon reasonable notice to all persons affected thereby, the department may apply to a court for an order compelling compliance.
(e) The department may not make public the name or identity of a person whose acts or conduct the department investigates under this section or the facts disclosed in the investigation, but this subsection does not apply to disclosures in actions or enforcement proceedings under this article.
(f) A lessor shall use generally accepted accounting principles and practices in keeping books and records so that the department or the department's representative may determine if the lessor is in compliance with this article or a rule adopted under this article.
(g) A lessor shall keep the lessor's books and records that pertain to a rental purchase agreement for at least two (2) years after the rental purchase agreement has terminated.
(h) If a lessor contracts with an outside vendor to provide a service that would otherwise be undertaken internally by the lessor and be subject to the department's routine examination procedures, the person that provides the service to the lessor shall, at the request of the director, submit to an examination by the department. If the director determines that an examination under this subsection is necessary or desirable, the examination may be made at the expense of the person to be examined. If the person to be examined under this subsection refuses to permit the examination to be made, the director may order any lessor that receives services from the person refusing the examination to:
(1) discontinue receiving one (1) or more services from the person; or
(2) otherwise cease conducting business with the person.
(1) The name of the lessor.
(2) The name in which business is transacted if different from subdivision (1).
(3) The address of the principal office, which may be outside Indiana.
(4) The address of all offices or stores, if any, in Indiana at which rental purchase agreements are made.
(5) If rental purchase agreements are made in a place other than an office or retail store in Indiana, a brief description of the manner in which they are made.
(6) The address of the designated agent upon whom service of process may be made in Indiana.
(7) Other information required by the director of the department.
(1) A fee fixed by the department under IC 28-11-3-5 with the initial notification filed with the department.
(2) A fee fixed by the department under IC 28-11-3-5 for each place of business operated by the lessor on December 31 of the preceding year with each annual notification subsequently filed with the department.
(b) In addition to the fee required under subsection (a)(2), if the department examines the books and records of the lessor, the lessor shall pay to the department all reasonably incurred costs of the examination in accordance with the fee schedule adopted by the department under IC 28-11-3-5.
(c) The department may impose a fee
(1) submitting the information required under IC 24-7-8-2; or
(2) paying a fee under subsection (a).
engaged in an insurance business, that is:
(1) organized, chartered, or holding an authorization
certificate under the laws of a state or of the United States
that authorizes the person to make loans and to receive
deposits, including a savings, share, certificate, or deposit
account; and
(2) subject to supervision by an official or agency of a state or
of the United States.
(b) The provisions of IC 26-1-4 which apply to a bank apply equally
to any supervised financial organization as defined in IC 24-4.5-1-301,
which is authorized by state or federal law to permit persons to make
withdrawals or payments from accounts by negotiable instruments.
(1) is a single family residential:
(A) first lien purchase money mortgage transaction; or
(B) refinancing transaction; and
(2) is closed after December 31, 2009.
(b) Not later than September 1, 2009, the department shall establish and maintain an electronic system for the collection and storage of the following information concerning any of the following persons that have participated in or assisted with a transaction to which this section applies, or that will participate in or assist with a transaction to which this section applies:
(1) The name and license number (under IC 23-2-5) of each loan brokerage business involved in the transaction.
(2) The name and license or registration number
(A) either licensed or registered under state or federal law as a mortgage loan originator consistent with the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (H.R. 3221 Title V); and
(B) involved in the transaction.
(3) The name and license number (under IC 25-34.1) of each:
(A) principal broker; and
(B) salesperson or broker-salesperson, if any;
involved in the transaction.
(4) The:
(A) name of; and
(B) code assigned by the National Association of Insurance
Commissioners (NAIC) to;
each title insurance underwriter involved in the transaction.
(5) The name and license number (under IC 27-1-15.6) of each
title insurance agency and agent involved in the transaction as a
closing agent (as defined in IC 6-1.1-12-43(a)(2)).
(6) The name and:
(A) license or certificate number (under IC 25-34.1-3-8) of
each licensed or certified real estate appraiser; or
(B) license number (under IC 25-34.1) of each broker;
who appraises the property that is the subject of the transaction.
(7) The name of the mortgagee and, if the mortgagee is required
to be licensed under (A) IC 24-4.4, or (B) IC 24-4.5-3-502; the
license number of the mortgagee.
(8) In the case of a first lien purchase money mortgage
transaction, the name of the seller of the property that is the
subject of the transaction.
(9) In the case of a first lien purchase money mortgage
transaction, the name of the buyer of the property that is the
subject of the transaction.
(10) The:
(A) name; and
(B) license number, certificate number, registration number,
or other code, as appropriate;
of any other person that participates in or assists with a
transaction to which this section applies, as the department may
prescribe.
(c) The system established by the department under this section
must include a form that:
(1) is uniformly accessible in an electronic format to the closing
agent (as defined in IC 6-1.1-12-43(a)(2)) in the transaction; and
(2) allows the closing agent to do the following:
(A) Input information identifying the property that is the
subject of the transaction by lot or parcel number, street
address, or some other means of identification that the
department determines:
(i) is sufficient to identify the property; and
(ii) is determinable by the closing agent.
(B) Subject to subsection (d) and to the extent determinable,
input the information described in subsection (b) with respect
to each person described in subsection (b) that participates in
or assists with the transaction.
(C) Respond to the following questions:
(i) "On what date did you receive the closing instructions from the creditor in the transaction?".
(ii) "On what date did the transaction close?".
(D) Submit the form electronically to a data base maintained by the department.
(d) Not later than the time of the closing, each person described in subsection (b), other than a person described in subsection (b)(8) or (b)(9), shall provide to the closing agent in the transaction the person's:
(1) legal name; and
(2) license number, certificate number, registration number, or NAIC code, as appropriate;
to allow the closing agent to comply with subsection (c)(2)(B). A person described in subsection (b)(7) shall provide the information required by this subsection for any person described in subsection (b)(6) that appraises the property that is the subject of the transaction on behalf of the person described in subsection (b)(7). A person described in subsection (b)(3)(B) who is involved in the transaction may provide the information required by this subsection for a person described in subsection (b)(3)(A) that serves as the principal broker for the person described in subsection (b)(3)(B). In the case of a first lien purchase money mortgage transaction, the closing agent shall determine the information described in subsection (b)(8) and (b)(9) from the HUD-1 settlement statement.
(e) Except for a person described in subsection (b)(8) or (b)(9), a person described in subsection (b) who fails to comply with subsection (d) is subject to a civil penalty of one hundred dollars ($100) for each closing with respect to which the person fails to comply with subsection (d). The penalty:
(1) may be enforced by the state agency that has administrative jurisdiction over the person in the same manner that the agency enforces the payment of fees or other penalties payable to the agency; and
(2) shall be paid into the home ownership education account established by IC 5-20-1-27.
(f) Subject to subsection (g), the department shall make the information stored in the data base described in subsection (c)(2)(D) accessible to:
(1) each entity described in IC 4-6-12-4; and
(2) the homeowner protection unit established under IC 4-6-12-2.
(g) The department, a closing agent who submits a form under subsection (c), each entity described in IC 4-6-12-4, and the homeowner protection unit established under IC 4-6-12-2 shall exercise
all necessary caution to avoid disclosure of any information:
(1) concerning a person described in subsection (b), including the
person's license, registration, or certificate number; and
(2) contained in the data base described in subsection (c)(2)(D);
except to the extent required or authorized by state or federal law.
(h) The department may adopt rules under IC 4-22-2 to implement
this section. Rules adopted by the department under this subsection
may establish procedures for the department to:
(1) establish;
(2) collect; and
(3) change as necessary;
an administrative fee to cover the department's expenses in establishing
and maintaining the electronic system required by this section.
(i) If the department adopts a rule under IC 4-22-2 to establish an
administrative fee to cover the department's expenses in establishing
and maintaining the electronic system required by this section, as
allowed under subsection (h), the department may:
(1) require the fee to be paid:
(A) to the closing agent responsible for inputting the
information and submitting the form described in subsection
(c)(2); and
(B) by the borrower in the transaction;
(2) allow the closing agent described in subdivision (1)(A) to
retain a part of the fee collected to cover the closing agent's costs
in inputting the information and submitting the form described in
subsection (c)(2); and
(3) require the closing agent to pay the remainder of the fee
collected to the department for deposit in the title insurance
enforcement fund established by IC 27-7-3.6-1, for the
department's use in establishing and maintaining the electronic
system required by this section.
application to issue a notice approving the proposed change in control.
The application shall contain the name and address of the corporation,
individual, or individuals who propose to acquire control.
(b) The period for approval under subsection (a) may be extended:
(1) in the discretion of the director for an additional thirty (30)
days; and
(2) not to exceed two (2) additional times for not more than
forty-five (45) days each time if:
(A) the department determines that the corporation, individual,
or individuals who propose to acquire control have not
submitted substantial evidence of the qualifications described
in subsection (c);
(B) the department determines that any material information
submitted is substantially inaccurate; or
(C) the department has been unable to complete the
investigation of the corporation, individual, or individuals who
propose to acquire control because of any delay caused by or
the inadequate cooperation of the corporation, individual, or
individuals.
(c) The department shall issue a notice approving the application
only after it has become satisfied that both of the following apply:
(1) The corporation, individual, or individuals who propose to
acquire control are qualified by competence, experience,
character, and financial responsibility to control and operate the
bank, trust company, stock savings bank, bank holding company,
corporate fiduciary, or industrial loan and investment company in
a legal and proper manner.
(2) The interests of the stockholders, depositors, and creditors of
the bank, trust company, stock savings bank, bank holding
company, corporate fiduciary, or industrial loan and investment
company and the interests of the public generally will not be
jeopardized by the proposed change in control.
(d) As used in this section, .holding company. means any company
(as defined in IC 28-2-15-5 before July 1, 1992, and as defined in
IC 28-2-16-5 beginning July 1, 1992) that directly or indirectly controls
one (1) or more state chartered financial institutions.
(e) As used in this section, "control", "controlling", "controlled by",
or "under common control with" means possession of the power
directly or indirectly to:
(1) direct or cause the direction of the management or policies of
a bank, a trust company, a holding company, a corporate
fiduciary, or an industrial loan and investment company, whether
through the beneficial ownership of voting securities, by contract,
or otherwise; or
(2) vote at least twenty-five percent (25%) of any class of voting
securities of a bank, a trust company, a holding company, a
corporate fiduciary, or an industrial loan and investment
company, whether the voting rights are derived through the
beneficial ownership of voting securities, by contract, or
otherwise.
(f) The director may determine, in the director's discretion, that
subsection (a) does not apply to any a transaction in which if the
director determines that the relative direct or beneficial ownership of
the bank, trust company, stock savings bank, holding company,
corporate fiduciary, or industrial loan and investment company does
will not change as a result of the transaction.
(g) The president or other chief executive officer of a financial
institution or holding company shall report to the director of the
department any transfer or sale of shares of stock of the financial
institution or holding company that results in direct or indirect
ownership by a stockholder or an affiliated group of stockholders of at
least ten percent (10%) of the outstanding stock of the financial
institution or holding company. The report required by this section
must be made not later than ten (10) days after the transfer of the shares
of stock on the books of the financial institution or holding company.
(1) Any:
(A) financial institution;
(B) person required to file notification with the department under IC 24-4.5-6-202;
(C) person subject to IC 24-7; or
(D) other person subject to regulation by the department.
(2) Any person licensed or required to be licensed under IC 24-4.4 or IC 24-4.5.
(b) As used in this section, "customer", with respect to a person described in subsection (a), means an individual consumer, or the individual's legal representative, who obtains or has obtained from the person a financial:
(1) product; or
(2) service;
that is to be used primarily for personal, family, or household purposes. The term does not include an affiliate of the person.
(c) As used in this section, "personal information" includes any of the following:
(1) An individual's first and last names or first initial and last name.
(2) Any of the following data elements:
(A) A Social Security number.
(B) A driver's license number.
(C) A state identification card number.
(D) A credit card number.
(E) A financial account number or debit card number.
(3) With respect to an individual, any of the following:
(A) Address.
(B) Telephone number.
(C) Information concerning the individual's:
(i) income or other compensation;
(ii) credit history;
(iii) credit score;
(iv) assets;
(v) liabilities; or
(vi) employment history.
(d) As used in this section, personal information is "encrypted" if the personal information:
(1) has been transformed through the use of an algorithmic process into a form in which there is a low probability of assigning meaning without use of a confidential process or key; or
(2) is secured by another method that renders the personal information unreadable or unusable.
(e) As used in this section, personal information is "redacted" if the personal information has been altered or truncated so that not more than the last four (4) digits of:
(1) a Social Security number;
(2) a driver's license number;
(3) a state identification number; or
(4) an account number;
are accessible as part of the personal information.
(f) As used in this section, "personal records" means any records that:
(1) are maintained, whether as a paper record or in an electronic or a computerized form, by a person to whom this section applies;
and
(2) contain the unencrypted, unredacted personal information of
one (1) or more customers or potential customers.
(g) A person to whom this section applies shall keep and handle
personal records in a manner that:
(1) reasonably safeguards the personal records from destruction,
theft, or other loss; and
(2) protects the personal records from misuse.
(h) If a breach of the security of any personal records occurs, the
person maintaining the records is subject to the disclosure requirements
under IC 24-4.9-3, unless the person is exempt from the disclosure
requirements under IC 24-4.9-3-4.
(i) A person to whom this section applies may not dispose of
personal records without first:
(1) shredding, incinerating, or mutilating the personal records; or
(2) erasing or otherwise rendering illegible or unusable the
personal information contained in the records.
(j) If a person to whom this section applies ceases doing business,
the person shall, as part of the winding up of the business, safeguard
any personal records maintained by the person in accordance with this
section until such time as the person is entitled or required to destroy
the records under:
(1) applicable law; or
(2) the person's own records maintenance policies.
(k) A person to whom this section applies shall provide at the
person's cost any records that the director considers relevant or
material to an examination, investigation, or other matter under
consideration by the department.
(1) posting the notice at the main entrance of the principal office of the financial institution;
(2) causing the notice to be served upon the president or other executive officer actively in charge of the business of the financial institution; and
(3) filing the notice in the office of the circuit court in the county where the principal office of the financial institution is located.
(b) Upon the filing of the notice under subsection (a), the clerk shall:
(1) note the filing of the notice upon the records of the receivership court; and
(2) enter the cause as a civil action upon the dockets of the court under the name and style of "In the matter of the liquidation of ___________" (inserting the name of the financial institution).
(c) The receivership court may hear and determine all issues and matters pertaining to or connected with the liquidation of the financial institution, including:
(1) the amount of the compensation and necessary expenses of any special representative, assistant, accountant, agent, or attorney employed by the department, or the receiver appointed by the department, as set forth in this chapter; and
(2) all papers and pleadings pertaining to the liquidation proceedings.
(d) All entries, orders, judgments, and decrees of the receivership court in connection with the liquidation proceedings shall be filed and entered of record in the cause of action.
(e) The rights and liabilities of a financial institution and of its creditors, depositors, shareholders, and all other persons interested in its estate shall, unless otherwise directed by the court, be fixed as of the date of the filing of the notice of possession with the receivership court. In the case of mutual debts or mutual credits of equal priority between the financial institution and another person, the credits and debts shall be set off and the balance only shall be allowed or paid. The right to set off shall be determined as of the date of the filing of the notice of possession of the financial institution under subsection (a).
(f) Notwithstanding this section, if the Federal Deposit Insurance Corporation is appointed receiver of a financial institution, subsections (a)(3), (b), (c), and (d) do not apply, and applicable federal law governs the receivership.
Agency federal deposit insurance agency shall not be required to post
any bond. If the receiver is not a Federal Deposit Insurance Agency,
federal deposit insurance agency, the director may agree to
reasonable compensation for the receiver.
(b) Upon appointment as receiver, title to all assets of the financial
institution vest in the receiver without the execution of any instruments
of conveyance, assignment, transfer, or endorsement. If no other
receiver is appointed as provided in this chapter, the department shall
act as receiver and has all of the powers and duties of a receiver as
provided in this chapter.
(c) Except as otherwise provided, the sole and exclusive right to
liquidate and terminate the affairs of any financial institution is vested
in the receiver appointed under this section, and except as otherwise
provided by law, no other receiver, assignee, trustee, or liquidating
agent shall be appointed by any court or any other person.
(d) After the department has taken possession of the business and
property for any financial institution, no suit, action, or other
proceeding at law or in equity shall be commenced or prosecuted
against the financial institution upon any debt, obligation, claim, or
demand.
(e) No person, firm, limited liability company, or corporation, or
other entity holding any of the property or credits of the financial
institution shall have any lien or charge against the property or credits
for any payment, advance, or clearance made after the department has
taken possession. A lien shall not attach to any of the assets or property
of the financial institution by reason of the entry of any judgment
recovered against the institution after the department has taken
possession of its business and property and while the possession
continues.
(f) A receiver appointed to liquidate a corporate fiduciary must have
sufficient experience in fiduciary matters.
(1) Take possession of all books, records, and assets of the financial institution.
(2) Collect all debts, claims, and judgments belonging to the financial institution and do such other acts as are necessary to preserve and liquidate its assets.
(3) Execute in the name of the financial institution any instrument necessary or proper to effectuate its powers or perform its duties as receiver.
(4) Initiate, pursue, and defend litigation involving any right, claim, interest, or liability of the financial institution.
(5) Exercise any and all fiduciary functions of the financial institution as of the date of appointment as receiver.
(6) Borrow money as necessary in the liquidation of the financial institution and secure the borrowings by the pledge or mortgage of assets.
(7) Abandon or convey title to any holder of a mortgage, security deed, security interest, or lien against property in which the financial institution has an interest whenever the receiver determines that to continue to claim that interest is burdensome and of no advantage to the financial institution, its depositors, creditors, or shareholders.
(8) Subject to the approval of the receivership court:
(A) sell any and all real and personal property to compromise any debt, claim, or judgment due to the financial institution and discontinue any action or other proceeding pending; or
(B) pay off all mortgages, securities deeds, security agreements, and liens upon any real or personal property belonging to the financial institution and purchase at a judicial sale or at a sale authorized by court order, any real or personal property in order to protect the financial institution's equity in that property.
(9) If, at the time of liquidation, a closed financial institution holds property in trust for an individual or a corporation under or by virtue of a trust instrument, the administration of the property must be handled in the manner set forth in IC 28-1-9-7.
Notwithstanding this section, when the Federal Deposit Insurance Corporation is appointed receiver of a financial institution, subdivision (8) does not apply.
(b) The receiver shall cause notice of the claims procedure prescribed by this section to be:
(1) published once a week for twelve (12) consecutive weeks in a newspaper of general circulation published in the county in which the receivership court is located; and
(2) mailed to each person whose name appears as a creditor upon books of the financial institution at the person's last address of record.
(c) Within one hundred eighty (180) days following receipt of claim, the receiver shall notify in writing any claimant whose claim has been rejected. Notice is effective when mailed. Any claimant whose claim has been rejected by the receiver may petition the receivership court for a hearing on the claim within sixty (60) days from the date the claim is rejected.
(d) If the Federal Deposit Insurance Corporation is the receiver, compliance with this section is not required.
(1) Claims of persons referred to in IC 28-1-12-6 as having preference and priority.
(2) Administration expenses of the liquidation, including the following:
(A) Court costs.
(B) Compensation and actual expenses incurred by the department or the receiver in order to facilitate the liquidation.
(C) Compensation of each regular officer or employee of the receiver for the time actually devoted by the officer or employee to the liquidation of the financial institution at an amount not to exceed the compensation paid to the officer or employee for the performance of the regular duties of the officer or employee.
(D) Actual expenses of each regular officer or employee of the receiver that are necessarily incurred in the performance of the duties of the officer or employee in the liquidation.
(E) Compensation and expenses of any special representative, assistant, accountant, agent, or attorney employed by the receiver.
(F) The reasonable general overhead expenses that are incurred by the department or the receiver in the liquidation of the affairs of the financial institution.
(3) Claims given priority under other provisions of state or federal law.
(4) Deposit obligations.
(5) Other general liabilities.
(6) Debt subordinated to the claims of general creditors.
(7) Equity capital securities.
(b) Interest may not be paid on any claim until the full principal amount of every claim within the same class has been paid.
(c) If the Federal Deposit Insurance Corporation is the receiver, compliance with this section is not required.
(1) any executory contract to which the closed financial institution is a party without any further liability to the closed financial institution or the receiver; or
(2) any obligation of the financial institution as a lessee of real or personal property.
The receiver's election to reject a lease shall create no claim for rent other than rent accrued to the date of termination or for actual damages, if any, for the termination not to exceed the equivalent of payment of rent for six (6) months.
(b) If the Federal Deposit Insurance Corporation is the receiver, compliance with this section is not required.
with the approval of the receivership court, may appoint a successor to
all rights, obligations, assets, deposits, agreements, and trusts held by
the closed financial institution as trustee, administrator, executor,
guardian, agent, and all other fiduciary or representative capacities.
The successor's duties and obligations begin upon appointment to the
same extent binding upon the closed financial institution and as though
the successor had originally assumed the duties and obligations.
Specifically, the successor shall succeed to and be entitled to
administer all trusteeships, administrations, executorships,
guardianships, agencies, and all other fiduciary or representative
proceedings to which the closed financial institution is named or
appointed in wills, whenever probated, or to which it is appointed by
any other instrument, court order, or by operation of law.
(b) This section shall not impair any right of the grantor or
beneficiaries of trust assets to secure the appointment of a substituted
trustee or manager.
(c) Within thirty (30) days after appointment, the successor shall
give written notice, insofar as practical, to all interested parties named
in:
(1) the books and records of the closed financial institution; or
(2) trust documents held by it;
that the successor has been appointed in accordance with applicable
law.
(d) If the Federal Deposit Insurance Corporation is the receiver,
compliance with this section is not required.
(1) the owners of any personal property left in the possession of a closed financial institution for safekeeping or as bailee or depository for hire;
(2) all lessees; and
(3) other persons in possession of any safe deposit box, vault, or locker;
requiring those persons to appear and assert their claims to the property within sixty (60) days from the date of the notice. Within that time, the owner or owners of the property may appear and assert their claims to the property. Subject to approval of the receivership court, the receiver shall make the agreements or arrangements as may be necessary for the disposition of the property and the contents of the safe deposit boxes, vaults, or lockers and the termination of any leases or other contracts relating to the property.
(b) If the Federal Deposit Insurance Corporation is the receiver, compliance with this section is not required.
(1) The name of the financial institution.
(2) The place where its principal office is located.
(3) The names and addresses of the directors and officers of the financial institution at the time when the liquidation proceedings were begun.
(4) A brief summary of the aggregate amount of general claims finally allowed against the financial institution, the aggregate amount of claims allowed as preferred, and the aggregate amount of all other claims against the financial institution, together with a statement of the aggregate payments made on each of the groups of claims and with a reference to:
(A) the orders of the receiver or the receivership court authorizing those payments; and
(B) the current reports wherein a report of the payments so ordered is made;
as of the date of the taking possession of the financial institution by the department.
(5) A brief summary of the aggregate amount of payments made to the shareholders of the financial institution, whether of money or other property, and a reference to the orders of the receiver or the receivership court authorizing the payments and to the current reports wherein the report of the payment is made.
(b) If the Federal Deposit Insurance Corporation is the receiver, the following apply:
(1) Compliance with this section is not required.
(2) The department:
(A) may file the articles of dissolution; and
(B) may take all actions necessary to complete the dissolution of the financial institution.
insolvent financial institution, the director of the department may
approve any transaction, including the purchase of assets, the
assumption of liabilities, a merger, or the formation of a new financial
institution, if the transaction requires the approval of the department.
(b) Subject to any limitations or restrictions imposed by law or by the articles of incorporation, each corporation has the following general rights, powers, and privileges:
(1) To continue as a corporation, under its corporate name, for the period limited in its articles of incorporation, or, if the period is not so limited, then perpetually.
(2) To sue and be sued in its corporate name.
(3) To have a corporate seal and to alter such seal at its pleasure.
(4) To acquire, own, hold, use, lease, mortgage, pledge, sell, convey, or otherwise dispose of property, real and personal, tangible and intangible, in the manner and to the extent hereinafter provided.
(5) To borrow money and to mortgage or pledge its property to secure the payment thereof, in the manner and to the extent hereinafter provided; but no financial institution having power to accept deposits of money shall pledge any of the assets of such financial institution as security for the safekeeping and prompt payment of any money so deposited, except that any such financial institution may, for the safekeeping and prompt payment of any money so deposited, give security of the kind authorized by any statute of this state or by the Congress of the United States. Notwithstanding this subdivision, a financial institution may receive deposits of state and federal public funds and may pledge securities or other assets for the repayment of deposits if the pledge is permitted by applicable law or regulation.
(6) To conduct business in this state and elsewhere.
(7) To appoint such officers and agents as the business of the corporation may require and to do the following with respect to any officers or agents appointed:
(A) Define their duties.
(B) Fix their compensation, which may include compensation
paid pursuant to any plan of deferred compensation approved
by the corporation's board of directors.
(C) Enter into employment contracts with the corporation's
officers and agents which set forth terms and conditions of
employment.
(D) Provide the corporation's officers, agents, and employees
with individual or group life insurance.
(E) Procure and maintain in effect for the benefit of the bank,
insurance on the life or lives of designated officers or
directors.
(8) To make bylaws for the government and regulation of its
affairs.
(9) To cease doing business and to dissolve and surrender its
corporate franchise.
(10) To do all acts and things necessary, convenient, or expedient
to carry out the purposes for which it is formed.
(c) Subject to any limitations or restrictions that the department may
impose by rule or policy, each corporation may purchase and hold life
insurance as follows:
(1) Life insurance purchased or held in connection with employee
compensation or benefit plans approved by the corporation's
board of directors.
(2) Life insurance purchased or held to recover the cost of
providing preretirement or postretirement employee benefits
approved by the corporation's board of directors.
(3) Life insurance on the lives of borrowers.
(4) Life insurance held as security for a loan.
(5) Life insurance that a national bank may purchase or hold
under 12 U.S.C. 24 (Seventh).
(1) a bank;
(2) a trust company;
(3) a corporate fiduciary;
(4) a savings bank organized, reorganized, or formed as a result of a conversion after December 31, 1992;
(5) a savings association; or
(6) an industrial loan and investment company that maintains federal deposit insurance.
(b) Any two (2) or more corporations that are organized or reorganized under the laws of any state (as defined in IC 28-2-17-19)
or of the United States may merge into one (1) of such corporations, or
may consolidate into a new corporation, to be organized under
IC 28-12, by complying with the provisions of this chapter.
(c) A savings bank organized before January 1, 1993, may under
section 25 of this chapter merge, consolidate, or join together with a
bank or trust company. Except as provided in section 25 of this chapter,
all other provisions of this chapter apply to the merger, consolidation,
or joining together.
(d) A corporation organized or reorganized under the laws of a
state (as defined in IC 28-2-17-19) or of the United States may
merge or consolidate with one (1) or more of its affiliates (as
defined in IC 28-1-18.2-1) by complying with all the provisions of
this chapter. In effecting a merger or consolidation between a
corporation and an affiliate, this chapter applies as if the affiliate
were a corporation except that a noncorporation survivor of a
merger or consolidation does not retain powers of the corporation.
(b) In deciding whether to approve or disapprove a resolution and joint agreement under this section, the department shall consider the following factors:
(1) Whether the institutions subject to the proposed transaction are operated in a safe, sound, and prudent manner.
(2) Whether the financial condition of any institution subject to the proposed transaction will jeopardize the financial stability of any other institutions subject to the proposed transaction.
(3) Whether the proposed transaction under this chapter will result in an institution that has inadequate capital, unsatisfactory management, or poor earnings prospects.
(4) Whether the proposed transaction, in the department's judgment and considering the available information under the prevailing circumstances, will result in an institution that is more favorable to the stakeholders than if the entities were to remain separate.
control and operate in a legal and proper manner the resulting
institution.
(5) Whether the public convenience and advantage will be served
by the resulting institution after the proposed transaction.
(6) Whether the institutions subject to the proposed transaction
under this chapter furnish all the information the department
requires in reaching the department's decision.
(b) The department may approve a resolution if the corporation
(1) The corporation intends to merge out of existence under IC 28-1-7-1.
(2) The corporation intends to voluntarily dissolve under IC 28-1-9.
(c) If the department approves a resolution submitted under this section, the department shall:
(1) write or stamp on the resolution:
(A) the words "Approved by the Department of Financial Institutions of the State of Indiana"; and
(B) the date of the approval; and
(2) place the impression of the seal of the department and the signature of the director or the director's authorized designee beneath the approval stamp.
such unpaid balances. Such deposit shall have the same force and
effect as if payment had been made directly to and accepted by the
persons lawfully entitled thereto. The distributive portions so deposited
shall be paid over by the department to such depositors, creditors or
shareholders respectively, or to the lawful owners of such distributable
portions, or to their respective legal representatives upon satisfactory
proof being made to the department of their respective rights thereto.
If any of the distributive portions so deposited with the department
shall not have been claimed within a period of three (3) years after the
date of such deposit, after the expiration of said period the department
shall make a charge of not to exceed one dollar ($1.00) against each of
said claims remaining unpaid, as reimbursement for all costs arising in
connection with the trust. The proceeds arising from such charges shall
be paid into the state treasury and shall be credited to the financial
institutions fund. Any balances remaining shall be paid to the general
fund of the state treasury. liquidating agent shall treat the property
as unclaimed property and comply with IC 32-34-1.
(b) Subject to such regulations as the department finds to be necessary and proper, any bank or trust company shall have the following powers:
(1) To make such loans and advances of credit and purchases of
obligations representing loans and advances of credit as are
eligible for insurance by the federal housing administrator, and to
obtain such insurance.
(2) To make such loans secured by mortgages on real property or
leasehold, as the federal housing administrator insures or makes
a commitment to insure, and to obtain such insurance.
(3) To purchase, invest in, and dispose of notes or bonds secured
by mortgage or trust deed insured by the federal housing
administrator or debentures issued by the federal housing
administrator, or bonds or other securities issued by national
mortgage associations.
(4) To extend credit to any state agency, with the approval of the
department, notwithstanding any other provisions or limitations
of IC 28-1. No law of this state prescribing the nature, amount, or
form of security or requiring security upon which loans or
advances of credit may be made, or prescribing or limiting
interest rates upon loans or advances of credit, or prescribing or
limiting the period for which loans or advances of credit may be
made, shall be deemed to apply to loans, advances of credit, or
purchases made pursuant to subdivisions (1), (2), and (3) and this
subdivision.
(5) To purchase, take, hold, and dispose of notes, and mortgages
securing such notes, made to any joint stock land bank heretofore
incorporated, in any case in which not less than ninety-nine
percent (99%) of the stock of said joint stock land bank is owned
by the bank or trust company at the time such notes or mortgages
be acquired by the bank or trust company; and upon dissolution
of any such joint stock land bank, or at any stage in the process of
such dissolution, any bank or trust company then owning not less
than ninety-nine percent (99%) of the stock of such joint stock
land bank may take, hold, and dispose of any notes, mortgages, or
other assets of such joint stock land bank of whatsoever nature,
including real estate, wheresoever situated, which such joint stock
land bank shall assign, transfer, convey, or otherwise make over
to such bank or trust company by way of final or partial
distribution of its assets to its stockholders upon such dissolution
or in connection with the process of such dissolution. No law of
this state prescribing the nature, amount, location, or form of
security, or requiring security upon which loans or advances of
credit may be made, or prescribing or limiting interest rates upon
loans or advances of credit, or prescribing or limiting the period
for which loan or advances of credit may be made, or prescribing
any ratio between the amount of any loan and the appraised value
of the security for such loan, or requiring periodical reductions of
the principal of any loan, shall be deemed to apply to loans, notes,
mortgages, real estate, or other assets mentioned in this
subdivision.
(6) To adopt stock purchase programs for employees and to grant
options to purchase, and to issue and sell, shares of its capital
stock to its employees, or to a trustee on their behalf (which may
be the bank or trust company issuing such capital stock), without
first offering the same to its shareholders, for such consideration,
not less than par value, and upon such terms and conditions as
shall be approved by its board of directors and by the holders of
a majority of its shares entitled to vote with respect thereto, and
by the department. In the absence of actual fraud in the
transaction, the judgment of the directors as to the consideration
for the issuances of such options and the sufficiency thereof shall
be conclusive. Any bank or trust company exercising the powers
granted in this subsection may, to the extent approved by the
department, have authorized and unissued stock required to fulfill
any stock option or other arrangement authorized herein.
(7) Subject to such restrictions as the department may impose, to
become the owner or lessor of personal or real property acquired
upon the request and for the use of a customer and to incur such
additional obligations as may be incident to becoming an owner
or lessor of such property.
(8) To purchase or construct buildings and hold legal title thereto
to be leased to municipal corporations or other public authorities,
for public purposes, having resources sufficient to make payment
of all rentals as they become due. Each lease agreement shall
provide that upon expiration, the lessee will become the owner of
the building.
(8.1) Subject to the prior written approval of the department, and
notwithstanding section 5 of this chapter, to purchase, hold, and
convey real estate which is:
(A) improved or to be improved by a single, freestanding
building; and
(B) to be used, in part, as a branch or the principal office of
that bank or trust company and, in part, as rental property for
one (1) or more lessees.
Unless a written extension of time is given by the department, the
bank or trust company shall open the branch or principal office
within two (2) years from the acquisition date of the real estate.
If the bank or trust company does not open a branch or its
principal office on the real estate in that time period or if the bank
or trust company removes its branch or principal office from the
real estate, the bank or trust company shall divest itself of all
interest in the real estate within five (5) years from the acquisition
date of the real estate, if a branch was not opened, or five (5)
years from the removal date of the branch office, whichever
applies. Except with the written approval of the department, the
sum invested in real estate and buildings used for the convenient
transaction of its business as provided in this subdivision shall not
exceed fifty percent (50%) of the capital and surplus of the bank
or trust company as provided in section 5 of this chapter.
(9) Except as provided in subsections (c) and (d), and subject to
subsection (e), to invest directly or indirectly in community
development corporations and projects of a predominantly civic,
community, or public nature, including equity investments in
corporations, or limited partnerships, limited liability
companies, or other entities organized for such purposes.
Investments by a bank or trust company under this subdivision
may not exceed:
(A) in any one (1) project, two percent (2%); and
(B) in the aggregate, five percent (5%);
of the capital and surplus of the bank or trust company. As used
in this subdivision and in subsection (c), "capital and surplus" has
the meaning set forth in IC 28-1-1-3(10).
(10) Subject to section 3.2 of this chapter, to exercise the rights
and privileges (as defined in section 3.2(a) of this chapter) that
are or may be granted to national banks domiciled in Indiana.
(c) Investments by a bank or trust company under subsection (b)(9)
may exceed the limit set forth in subsection (b)(9)(B) if the director
determines that:
(1) the aggregate investments by the bank or trust company under
subsection (b)(9) in excess of five percent (5%) of the capital and
surplus of the bank or trust company will not pose a significant
risk to the affected deposit insurance fund; and
(2) the bank or trust company is adequately capitalized.
However, in no case shall the aggregate investments by a bank or trust
company under subsection (b)(9) exceed ten percent (10%) of the
capital and surplus of the bank or trust company.
(d) Investments by a bank or trust company under subsection (b)(9)
in equity investments qualifying for the new markets tax credits under
26 U.S.C. 45D or other programs approved by the director:
(1) are not subject to the limit set forth in subsection (b)(9)(A); and
(2) may exceed the limit set forth in subsection (b)(9)(B) if the director determines that:
(A) the aggregate equity investments qualifying for the new markets tax credit or other programs that are:
(i) made by the bank or trust company under subsection (b)(9); and
(ii) in excess of five percent (5%) of the capital and surplus of the bank or trust company;
will not pose a significant risk to the affected deposit insurance fund; and
(B) the bank or trust company is adequately capitalized.
However, in no case shall the aggregate equity investments qualifying for the new markets tax credit or other programs and made by a bank or trust company exceed
(e) A bank or trust company shall not make any investment under subsection (b)(9) if the investment would expose the bank or trust company to unlimited liability.
(f) Any rule made and promulgated under and pursuant to this section may apply to one (1) or more banks or trust companies or to one (1) or more localities in the state as the department, in its discretion, may determine.
(1) to:
(A) create;
(B) deliver;
(C) acquire; or
(D) sell;
a product, a service, or an investment that is available to or offered by; or
(2) to engage in mergers, consolidations, reorganizations, or other activities or to exercise other powers authorized for;
national banks domiciled in Indiana.
(b) A bank that intends to exercise any rights and privileges that are:
(1) granted to national banks; but
(2) not authorized for banks under the Indiana Code (except for
this section) or any rule adopted under the Indiana Code;
shall submit a letter to the department describing in detail the requested
rights and privileges granted to national banks that the bank intends to
exercise. If available, copies of relevant federal law, regulations, and
interpretive letters must be attached to the letter submitted by the bank.
(c) The department shall promptly notify the requesting bank of the
department's receipt of the letter submitted under subsection (b).
Except as provided in subsection (e), the bank may exercise the
requested rights and privileges sixty (60) days after the date on which
the department receives the letter unless otherwise notified by the
department.
(d) The department may deny the requested rights and privileges if
the department finds that:
(1) national banks domiciled in Indiana do not possess the
requested rights and privileges;
(2) the exercise of the requested rights and privileges by the bank
would adversely affect the safety and soundness of the bank;
(3) the exercise of the requested rights and privileges by the bank
would result in an unacceptable curtailment of consumer
protection; or
(4) the failure of the department to approve the requested rights
and privileges will not result in a competitive disadvantage to the
bank.
(e) The sixty (60) day period referred to in subsection (c) may be
extended by the department based on a determination that the bank's
letter raised issues requiring additional information or additional time
for analysis. If the sixty (60) day period is extended under this
subsection, the bank may exercise the requested rights and privileges
only if the bank receives prior written approval from the department.
However:
(1) the department must:
(A) approve or deny the requested rights and privileges; or
(B) convene a hearing;
not later than sixty (60) days after the department receives the
bank's letter; and
(2) if a hearing is convened, the department must approve or deny
the requested rights and privileges not later than sixty (60) days
after the hearing is concluded.
(f) The exercise of rights and privileges by a bank in compliance
with and in the manner authorized by this section is not a violation of
any provision of the Indiana Code or rules adopted under IC 4-22-2.
(g) If a bank receives approval to exercise the requested rights and
privileges granted to national banks domiciled in Indiana, the
department shall determine by order whether all banks may exercise
the same rights and privileges. In making the determination required by
this subsection, the department must ensure that the exercise of the
rights and privileges by all banks will not:
(1) adversely affect their safety and soundness; or
(2) unduly constrain Indiana consumer protection provisions.
(h) If the department denies the request of a bank under this section
to exercise any rights and privileges that are granted to national banks,
the bank may appeal the decision of the department to the circuit court
with jurisdiction in the county in which the principal office of the bank
is located. In an appeal under this section, the court shall determine the
matter de novo.
(b) This chapter does not apply to a third-party bill paying service with which the customer contracts solely for the customer's convenience of paying routine bills, in an arrangement in which the customer retains full control over all funds deposited. The types of payments made by a bill paying service are exempt from this chapter as long as the company's actions are not an attempt, as determined by the director, to circumvent limitations under this chapter.
(1) "Person" includes individuals, sole proprietorships, partnerships, limited liability companies, trusts, joint ventures, corporations, unincorporated organizations,
(2) "Debt management company" is any person doing business as a budget counseling, credit counseling, debt management, or debt pooling service or holding the person out, by words of similar import, as providing services to debtors in the management of their finances and debts, and
following:
(A) An entity A person that simply holds any money, funds,
check, personal check, money order, personal money order,
draft, or any other instrument for the transmission of money.
(B) A person or an entity known as a "budget service
company".
(3) "License" means a license issued under the provisions of this
chapter.
(4) "Licensee" means any person to whom a license has been
issued pursuant to the provisions of this chapter.
(5) "Contract debtor" means a debtor who has entered into a
contract written agreement with a licensee.
(6) "Debt" means an obligation arising out of personal, family, or
household use.
(7) "Debtor" means an individual whose principal debts and
obligations arise out of personal, family, or household use and
shall not apply to persons whose principal indebtedness arises out
of business purpose transactions.
(8) "Department" means the members of the department of
financial institutions.
(9) "Finances" means a savings deposit that is:
(A) made on behalf of a contract debtor;
(B) owned and controlled exclusively by the contract debtor
and not a licensee who has a power of attorney of the contract
debtor; and
(C) placed in a bank or savings institution chartered by the
state or federal government.
(10) "Affiliate" means a person that, directly or indirectly,
through one (1) or more intermediaries:
(A) controls;
(B) is controlled by; or
(C) is under common control with;
a person subject to this chapter.
(11) "Fee" means the total amount of money charged to a
contract debtor by a debt management company for the
administration of a debt management plan.
(12) "Plan" means a written debt repayment program in
which a debt management company furnishes debt
management services to a contract debtor and that includes
a schedule of payments to be made by or on behalf of the
contract debtor and used to pay debts owed by the contract
debtor.
(13) "Principal amount of the debt" means the total amount
of a debt at the time the contract debtor enters into an
agreement.
(14) "Agreement" means an agreement between a debt
management company and a debtor for the performance of
debt management services.
(15) "Trust account" means an account held by a licensee that
is:
(A) established in a bank insured by the Federal Deposit
Insurance Corporation;
(B) separate from other accounts held by the licensee;
(C) designated as a trust account or other account
designated to indicate that the money in the account is not
the money of the licensee; and
(D) used to hold money of one (1) or more contract debtors
for disbursement to creditors of the contract debtors.
(16) "Month" means a calendar month.
(17) "Day" means a calendar day.
(18) "Concessions" means assent to repayment of a debt on
terms more favorable to a contract debtor than the terms of
the contract between the debtor and a creditor.
(19) "Good faith" means honesty in fact and the observance
of reasonable standards of fair dealing.
(20) "Control of a related interest" refers to a situation in
which a person, directly or indirectly, or through or in
concert with one (1) or more other persons, possesses any of
the following:
(A) The ownership of, control of, or power to vote at least
twenty-five percent (25%) of the voting securities of a
related interest.
(B) The control in any manner of the election of a majority
of the directors of a related interest.
(C) The power to exercise a controlling influence over the
management or policies of a related interest. For purposes
of this clause, a person is presumed to have control,
including the power to exercise a controlling influence over
the management or policies of the related interest, if the
person:
(i) is an executive officer or a director of the related
interest and directly or indirectly owns, controls, or has
the power to vote more than ten percent (10%) of any
class of voting securities of the related interest; or
(ii) directly or indirectly owns, controls, or has the power
to vote more than ten percent (10%) of any class of
voting securities of the related interest and no other
person owns, controls, or has the power to vote a greater
percentage of that class of voting securities.
(1) the person or any of the person's employees or agents are located in Indiana; or
(2) the person:
(A) contracts with debtors who are residents of Indiana; or
(B) solicits business from residents of Indiana by advertisements or other communications sent or delivered through any of the following means:
(i) Mail.
(ii) Personal delivery.
(iii) Telephone.
(iv) Radio.
(v) Television.
(vi) The Internet or other electronic communications.
(vii) Any other means of communication.
(b) The director may request evidence of compliance with this section at:
(1) the time of application;
(2) the time of renewal of a license; or
(3) any other time considered necessary by the director.
(c) For purposes of subsection (b), evidence of compliance with this section may include:
(1) criminal background checks, including a national criminal history background check (as defined in IC 10-13-3-12) by the Federal Bureau of Investigation for any individual described in section 5(b)(2) or 5(b)(3) of this chapter;
(2) credit histories; and
(3) other background checks considered necessary by the director.
If the director requests a national criminal history background check under subdivision (1) for an individual described in that subdivision, the director shall require the individual to submit fingerprints to the department or to the state police department, as appropriate, at the time
evidence of compliance is requested under subsection (b). The
individual to whom the request is made shall pay any fees or costs
associated with the fingerprints and the national criminal history
background check. The national criminal history background check
may be used by the director to determine the individual's compliance
with this section. The director or the department may not release the
results of the national criminal history background check to any private
entity.
(d) The fee for a license or renewal shall be fixed by the department
under IC 28-11-3-5 and shall be nonrefundable. The department may
impose a fee under IC 28-11-3-5 for each day that a renewal fee due
and payable under this subsection is and any related documents that
are required to be submitted with the renewal are delinquent.
(e) If a person knowingly acts as a debt management company in
violation of this chapter, any agreement the person has made under this
chapter is void and the debtor under the agreement is not obligated to
pay any fees. If the debtor has paid any amounts to the person, the
debtor, or the department on behalf of the debtor, may recover the
payment from the person that violated this section.
(f) A license issued under this section:
(1) is not assignable or transferable; and
(2) must be renewed every year in the manner prescribed by
the director of the department.
The director of the department shall prescribe the form of the
renewal application. In order to be accepted for processing, a
renewal application must be accompanied by the license renewal
fee imposed under subsection (d) and all information and
documents requested by the director of the department.
(1)
(2) Violation of any of the provisions of this chapter.
(3) Fraud or deceit in procuring the issuance of a license or renewal under this chapter.
(4) Indulging in a continuous course of unfair conduct.
(5) Insolvency, bankruptcy, receivership, or assignment for the benefit of creditors by a licensee.
(6) Licensee lending money to any contract debtor that has subscribed to the licensee's services.
(7) Except as provided in subsection (c), offering to pay or give any cash,
(8) Except as provided in subsection (d), receiving any cash,
(9) Licensee requiring a debtor to purchase or agree to purchase a policy of insurance from which licensee receives a fee or other remuneration.
(10) If the licensee violates any reasonable rule or regulation made by the department under and within the authority of this chapter.
(11) Misleading advertising or representing that the licensee can provide protection from legal recourse or suits of creditors.
(12) Engaging in an unfair, unconscionable, or deceptive act or practice, including the knowing omission of any material information.
(13) Providing a contract debtor less than the full benefit of a compromise of a debt arranged by the licensee.
(14) Furnishing legal advice or performing legal services, unless the person furnishing the advice or performing the services:
(A) is licensed to practice law; and
(B) has been engaged by a debtor to provide legal services to the debtor.
(15) A fact or condition exists that, if the fact or condition had existed when the licensee applied for licensure as a debt management company, would have been a reason for denying the license.
(b) Except as provided in section 4.1 of this chapter, the denial, revocation, or suspension shall be made only after specific charges have been filed in writing, under oath, with the department or by the department, whereupon a hearing shall be had as to the reasons for such denial, revocation, or suspension and a certified copy of the charges shall be served on the licensee or the applicant for license not less than ten (10) days prior to the hearing.
(c) Notwithstanding subsection (a)(7), a licensee may reduce the fees of a contract debtor who is a client of the licensee if the contract
debtor refers a prospective customer to the licensee.
(d) Notwithstanding subsection (a)(8), a licensee may receive a fair
share creditor fee, based on disbursements made to the creditor, from
a contract debtor's creditors. If any creditor refuses to pay the fair
share creditor fee, the creditor must still be included in the contract
debtor's payment plan.
(e) If the director of the department:
(1) has just cause to believe an emergency exists from which it is
necessary to protect the interests of the public; or
(2) determines that the license was obtained for the benefit of, or
on behalf of, a person who does not qualify for a license;
the director may proceed with the revocation of the license under
IC 4-21.5-3-6.
(1) file any renewal
(2) pay any license renewal fee described under section 3 of this chapter;
(b) A person whose license is revoked under this section may:
(1) pay all delinquent fees and apply for a new license; or
(2) appeal the revocation to the department for an administrative review under IC 4-21.5-3. Pending the decision resulting from the hearing under IC 4-21.5-3 concerning the license revocation, the license remains in force.
(b) The department may not issue a license unless the department finds that the financial responsibility, character, and fitness of:
(1) the applicant and any significant affiliate of the applicant;
(2) each executive officer, director, or manager of the applicant, or any other individual having a similar status or performing a similar function for the applicant; and
(3) if known, each person directly or indirectly owning of record or owning beneficially at least ten percent (10%) of the outstanding shares of any class of equity security of the applicant;
warrant belief that the business will be operated honestly and fairly under this
(c) An application submitted under this section must indicate whether any individuals described in subsection (b)(2) or (b)(3):
(1) are, at the time of the application, under indictment for a felony
(2) have been convicted of or pleaded guilty or nolo contendere to a felony
(d) The department may deny an application under this section if the director of the department determines that the application was submitted for the benefit of, or on behalf of, a person who does not qualify for a license.
(e) Upon written request, an applicant is entitled to a hearing under IC 4-21.5 on the question of the qualifications of the applicant for a license.
or misrepresentation under the laws of Indiana or any other
jurisdiction.
(2) Any individuals described in section 5(b)(2) or 5(b)(3) of this
chapter have been convicted of or pleaded guilty or nolo
contendere to a felony involving fraud, deceit, or
misrepresentation under the laws of Indiana or any other
jurisdiction.
(b) If this section applies, the licensee shall provide to the
department the information required under section 5(c) of this chapter:
(1) not later than thirty (30) days after any person described in
subsection (a)
(A) has been put on notice of the indictment; or
(B) has been convicted of or pleaded guilty or nolo contendere
to the felony; or
whichever applies; or
(2) if the licensee's next license renewal fee under section 3(c) of
this chapter is due before the date described in subdivision (1),
along with the licensee's next license renewal fee under section
3(d) of this chapter.
(c) Not later than thirty (30) days after a licensee has been
served with notice of a civil action for violation of this chapter by
or on behalf of a debtor who resides or resided in Indiana on:
(1) the date an agreement that is the subject of the civil action
was entered into; or
(2) the date the civil action is filed;
the licensee shall provide written notice of the civil action to the
department.
(1) the licensee has prepared a budget analysis; and
(2) if the debtor is to make regular, periodic payments, the licensee:
(A) has prepared a plan for the debtor;
(B) has made a determination, based on the licensee's analysis of the information provided by the debtor and otherwise available to the licensee, that the plan is suitable for the debtor and the debtor will be able to meet the payment obligations under the plan; and
(C) believes that each creditor of the debtor listed as a participating creditor in the plan will accept payment of
the debtor's debts as provided in the plan.
(b) Before a debtor enters into an agreement with a licensee to
engage in a plan, the licensee shall:
(1) provide the debtor with a copy of the budget analysis and
plan required by subsection (a) in a form that identifies the
licensee and that the debtor may keep whether or not the
debtor enters into the agreement;
(2) inform the debtor of the availability, at the debtor's
option, of assistance provided through a toll free
communication system or in person, where reasonably
available to residents in Indiana, regarding the budget
analysis and plan required by subsection (a); and
(3) with respect to all creditors identified by the debtor or
otherwise known by the licensee to be creditors of the debtor,
provide the debtor with a list of:
(A) creditors that the licensee expects to participate in the
plan and grant concessions;
(B) creditors that the licensee expects to participate in the
plan but not grant concessions;
(C) creditors that the licensee expects not to participate in
the plan; and
(D) all other creditors.
(c) Except as provided in subsections (d), (e), and (f), before a
debtor enters into an agreement with a licensee, the licensee shall,
in a written form that is provided to the debtor separately, that
contains no other information, and that the debtor may keep
whether or not the debtor enters into the agreement, provide the
following information to the debtor:
(1) The licensee's name and business address of the licensee.
(2) A statement that:
(A) the licensee's plans are not suitable for all debtors and
the debtor may ask the licensee about other ways,
including bankruptcy, to deal with indebtedness;
(B) nonpayment of debt may lead creditors to increase
finance and other charges or undertake collection activity,
including litigation;
(C) unless the statement would be untrue, the licensee may
receive compensation from the creditors of the debtor; and
(D) unless the debtor is insolvent, if a creditor settles for
less than the full amount of the debt, the plan may result in
the creation of taxable income to the debtor, even though
the debtor does not receive any money.
(d) If a licensee may receive payments from a debtor's creditors
and the plan contemplates that the debtor's creditors will reduce
finance charges or fees for late payment, default, or delinquency,
the licensee may comply with subsection (c) by providing the
following disclosure in clear and conspicuous type, surrounded by
black lines:
"IMPORTANT INFORMATION FOR YOU TO CONSIDER
(1) Debt management plans are not right for all individuals,
and you may ask us to provide information about other ways,
including bankruptcy, to deal with your debts.
(2) We may receive compensation for our services from your
creditors.
_______________________________________
Name and business address of licensee".
(e) If a licensee will not receive payments from a debtor's
creditors and the plan contemplates that the debtor's creditors will
reduce finance charges or fees for late payment, default, or
delinquency, a licensee may comply with subsection (c) by
providing the following disclosure in clear and conspicuous type,
surrounded by black lines:
"IMPORTANT INFORMATION FOR YOU TO CONSIDER
Debt management plans are not right for all individuals, and
you may ask us to provide information about other ways,
including bankruptcy, to deal with your debts.
______________________________________
Name and business address of licensee".
(f) If an agreement contemplates that creditors will settle debts
for less than the full principal amount of debt owed, a licensee may
comply with subsection (c) by providing the following disclosure in
clear and conspicuous type, surrounded by black lines:
"IMPORTANT INFORMATION FOR YOU TO CONSIDER
(1) Our program is not right for all individuals, and you may
ask us to provide information about bankruptcy and other
ways to deal with your debts.
(2) Nonpayment of your debts under our program may:
(A) hurt your ability to obtain credit;
(B) lead your creditors to increase finance and other
charges; and
(C) lead your creditors to undertake activity, including
lawsuits, to collect the debts.
(3) Reduction of debt under our program may result in
taxable income to you, even though you will not actually
receive any money.
_________________________________________
Name and business address of licensee".
(a) An agreement between a licensee and a debtor must:
(1) be in a written form;
(2) be dated and signed by the licensee and the debtor;
(3) include the name of the debtor and the address where the debtor resides;
(4) include the name, business address, and telephone number of the licensee;
(5) be delivered to the debtor immediately upon formation of the agreement; and
(6) disclose the following:
(A) The services to be provided.
(B) The amount or method of determining the amount of all fees, individually itemized, to be paid by the debtor.
(C) The schedule of payments to be made by or on behalf of the debtor, including the amount of each payment, the date on which each payment is due, and an estimate of the date of the final payment.
(D) If a plan provides for regular periodic payments to creditors:
(i) each creditor of the debtor to which payment will be made, the amount owed to each creditor, and any concessions the licensee reasonably believes each
creditor will offer; and
(ii) the schedule of expected payments to each creditor,
including the amount of each payment and the date on
which the payment will be made.
(E) Each creditor that the licensee believes will not
participate in the plan and to which the licensee will not
direct payment.
(F) The manner in which the licensee will comply with the
licensee's obligations under section 9(j) of this chapter.
(G) A statement that:
(i) the licensee may terminate the agreement for good
cause, upon return of unexpended money of the debtor;
(ii) the debtor may cancel the agreement as provided in
section 8.6 of this chapter; and
(iii) the debtor may contact the department with any
questions or complaints regarding the licensee.
(H) The address, telephone number, and Internet address
or web site of the department.
(b) For purposes of subsection (a)(5), delivery of an electronic
record occurs when:
(1) the record is made available in a format in which the
debtor may retrieve, save, and print the record; and
(2) the debtor is notified that the record is available.
(c) An agreement must provide that:
(1) the debtor has a right to terminate the agreement at any
time without penalty, notwithstanding the close-out fee as
permitted by section 8.3(d) of this chapter, or obligation, by
giving the licensee written or electronic notice, in which event:
(A) the licensee shall refund all unexpended money that the
licensee or the licensee's agent has received from or on
behalf of the debtor for the reduction or satisfaction of the
debtor's debt; and
(B) all powers of attorney granted by the debtor to the
licensee are revoked and ineffective;
(2) the debtor authorizes any bank insured by the federal
deposit insurance corporation in which the licensee or the
licensee's agent has established a trust account to disclose to
the department any financial records relating to the trust
account;
(3) the licensee shall notify the debtor within five (5) days
after learning of a creditor's final decision to reject or
withdraw from a plan under the agreement; and
(4) the notice under subdivision (3) must include:
(A) the identity of the creditor; and
(B) a statement that the debtor has the right to modify or terminate the agreement.
licensee, other than the amount pursuant to subsection (g), is not
considered a debt owed by the debtor to the licensee.
(g) Upon:
(1) cancellation of the contract by a contract debtor; or
(2) termination of payments by a contract debtor;
a licensee may not withhold for the licensee's own benefit, in addition
to the amounts specified in subsection (f), more than one hundred
dollars ($100), which may be accrued as a close-out fee. The licensee
may not charge the contract debtor more than one (1) set up fee or
cancellation fee, or both, unless the contract debtor leaves the services
of the licensee for more than six (6) months.
(h) (g) A licensee may not enter into a contract an agreement with
a debtor unless a thorough, written budget analysis of the debtor
indicates that the debtor can reasonably meet the payments required
under a proposed debt program or finance program. plan. The
following must be included in the budget analysis:
(1) Documentation and verification of all income considered.
All income verification shall be dated not more than sixty (60)
days before the completion of the budget analysis.
(2) Monthly living expense figures must be reasonable for the
particular family size and part of the state.
(3) Documentation and verification, either by a current credit
bureau report, current debtor account statements, or direct
documentation from the creditor, of monthly debt payments
and balances to be paid outside the plan.
(4) Documentation and verification, either by a current credit
bureau report, current debtor account statements, or direct
documentation from the creditor, of the monthly debt
payments and current balances to be paid through the plan.
(5) The date of the budget analysis and the signature of the
debtor.
(i) (h) A licensee may not enter into a contract an agreement with
a contract debtor for a period longer than twenty-four (24) sixty (60)
months. Every thirty (30) months, the licensee shall complete a
thorough, written budget analysis of the contract debtor to ensure
the debt management plan is still suitable for the contract debtor
and the contract debtor will be able to meet the payment
obligations under the plan. When adjustments are needed to
change the indebtedness listed in the agreement, the licensee may
execute a new agreement using the revised figures. A licensee may
not increase the monthly fee percentage under section 8.3(c)(2)(A)
of this chapter during the term of the original debt management
plan agreement.
(j) (i) A licensee may provide services under this chapter in the
same place of business in which another business is operating, or from
which other products or services are sold, if the director issues a
written determination that:
(1) the operation of the other business; or
(2) the sale of other products and services;
from the location in question is not contrary to the best interests of the
licensee's contract debtors.
(k) (j) A licensee without a physical location in Indiana may:
(1) solicit sales of; and
(2) sell;
additional products and services to Indiana residents if the director
issues a written determination that the proposed solicitation or sale is
not contrary to the best interests of contract debtors.
(l) A licensee may assess a charge not to exceed twenty-five dollars
($25) for each return by a bank or other depository institution of a
dishonored check, negotiable order of withdrawal, or share draft issued
by the contract debtor.
(k) A licensee shall maintain a toll free communication system,
staffed at a level that reasonably permits a contract debtor to
speak to a counselor, debt specialist, or customer service
representative, as appropriate, during ordinary business hours.
(l) A debt management company shall act in good faith in all
matters under this chapter.
(1) impose, directly or indirectly, a fee or other charge on a debtor; or
(2) receive money from or on behalf of a debtor for debt management services.
(b) A licensee may not impose charges or receive payment for debt management services until the licensee and the debtor have agreed upon a plan and have signed an agreement that complies with sections 8, 8.6, and 9.5 of this chapter. All creditors must be notified of the debtor's and licensee's relationship.
(c) If a debtor assents to a plan, the licensee may charge the following:
(1) A set up fee of not more than fifty dollars ($50) for consultation, obtaining a credit report, and setting up an
account. Acceptance of a plan payment constitutes agreement
by the creditor to the plan.
(2) A monthly service fee of the lesser of:
(A) not more than fifteen percent (15%) of the monthly
amount the contract debtor agrees to pay through the
licensee, divided into equal monthly payments over the
term of the agreement; or
(B) not more than seventy-five dollars ($75) in any month.
The monthly service fee under this subdivision may be
charged for any one (1) month or part of a month. The
amount of a set up fee under subdivision (1) may not be
included in the calculation of the monthly service fee.
(d) Upon cancellation by a contract debtor or termination of
payments by a contract debtor, a licensee may not withhold for the
licensee's own benefit more than one hundred dollars ($100), which
may be accrued as a close-out fee.
(e) A licensee may not charge a contract debtor more than one
(1) set up fee or one (1) cancellation fee unless the contract debtor
leaves the services of the licensee for more than six (6) months.
(f) With respect to any additional charge not specifically
provided for in this section, the licensee must submit a written
explanation of the charge to the department indicating how the
charge would be assessed and the value or benefit to the contract
debtor. Supporting documents may be required by the department.
The department shall determine whether the charge:
(1) would be of benefit to the consumer; and
(2) is reasonable in relation to the benefits.
An additional charge is not permitted unless approved by the
department.
(g) For purposes of this chapter, the terms of an agreement
commence on the date on which the agreement is made.
(h) A licensee may assess a charge of not more than twenty-five
dollars ($25) for each return by a bank or other depository
institution of a dishonored check, negotiable order of withdrawal,
or share draft issued by the contract debtor.
(i) Any fee charged by the licensee to the debtor under this
section for services rendered by the licensee, other than the fees
described under subsection (e), is not considered a debt owed by
the debtor to the licensee.
agreement before midnight of the third business day after the
debtor enters into the agreement unless the agreement does not
comply with subsection (b) or section 8 or 9.5 of this chapter, in
which event the debtor may cancel the agreement at any time after
the debtor enters into the agreement and all fees paid by the debtor
shall be refunded to the debtor. To exercise the right to cancel, the
debtor must give written notice to the licensee. Notice by mail is
given when mailed.
(b) An agreement must be accompanied by a form that contains
in clear and conspicuous type, surrounded by bold black lines:
"NOTICE OF RIGHT TO CANCEL
You may cancel this agreement, without any penalty or
obligation, at any time before midnight of the third business
day that begins the day after you agree to it by electronic
communication or by signing it.
To cancel this agreement during this period, send an
electronic mail message to
____________________________ or mail or deliver a signed,
Electronic mail address of licensee
dated copy of this notice, or any other written notice to
___________________________________________________
Name of licensee
at _______________________________ before midnight on
Address of licensee
_________________.
Date
If you cancel this agreement within the 3 day period, we will
refund all the money you have already paid us.
You also may terminate this agreement at any later time, but we
may not be required to refund fees you have paid us.
I cancel this agreement,
__________________________________
Print your name
__________________________________
Signature
__________________________________
Date".
(c) If a personal financial emergency necessitates the
disbursement of a debtor's money to one (1) or more of the
debtor's creditors before the expiration of the third business day
after the date an agreement is signed, a debtor may waive the right
to cancel. To waive the right, the individual must send or deliver a
signed, dated statement in the debtor's own words describing the
circumstances that necessitate a waiver. The waiver must explicitly
waive the right to cancel. A waiver by means of a standard form
record is void.
(1) A contract debtor may file only one (1) letter of continuation with a licensee for any agreement.
(2) A letter of continuation must contain a detailed explanation of the reason or reasons for the missed payment.
(3) If an agreement for which a letter of continuation that meets the requirements of this subsection is filed, the agreement remains in effect and subject to cancellation for any future failure to make a payment as described in this subsection.
(4) An agreement between a licensee and a contract debtor must clearly provide for one (1) letter of continuation by a contract debtor.
(5) A contract debtor may not file a letter of continuation with a licensee at the beginning of an agreement.
(b) If a licensee or a contract debtor terminates an agreement, the licensee shall immediately return to the contract debtor any money of the contract debtor held in trust for the benefit of the contract debtor.
or agents and may be used for no purpose other than paying bills,
invoices, or accounts of said persons. All such trust funds received at
the main or branch offices of a licensee shall be deposited in a bank or
banks in an account or accounts in the name of the licensee designated
"trust account", or by some other appropriate name indicating that the
funds are not the funds of the licensee or its officers, employees, or
agents, on or before the close of the same banking day following
receipt.
(b) Prior to separation and deposit by the licensee, the funds may
only be used by the licensee for the making of change or the cashing of
checks in the normal course of its business. Such funds are not subject
to attachment, levy of execution, or sequestration by order of court
except by an obligor for whom a licensee is acting as an agent in
paying bills, invoices, or accounts.
(c) Each licensee shall make remittances within thirty (30) days
after initial receipt of funds, and thereafter remittances shall be made
within fifteen (15) days of receipt, less fees and costs, unless the
reasonable payment of one (1) or more of the debtor's obligations
requires that the funds be held for a longer period so as to accumulate
a sum certain. For the purpose of this section, the cancellation fee set
forth in section 8(g) of this chapter shall not be deemed an obligation
of the debtor.
(a) All money paid to a licensee by or on behalf of a contract
debtor for distribution to creditors under a plan is held in trust. On
or before the close of the same banking day following receipt, the
licensee shall deposit the money in a trust account established for
the benefit of the contract debtor to whom the licensee is furnishing
debt management services.
(b) A licensee shall do the following:
(1) Maintain separate records of account for each individual
to whom the licensee is furnishing debt management services.
(2) Disburse money paid by or on behalf of the contract
debtor to creditors of the contract debtor as disclosed in the
agreement.
(3) Make remittances not later than thirty (30) days after
initial receipt of funds. After the initial receipt of funds,
remittances shall be made not later than fifteen (15) days after
receipt of funds, less fees and costs, unless the reasonable
payment of one (1) or more of the contract debtor's
obligations requires that the funds be held for a longer period
to accumulate a sum certain. For purposes of this section, the
close-out fee set forth in section 8.3(d) of this chapter is not
considered an obligation of the contract debtor.
(4) Retain in the contract debtor's trust account, for charges,
an amount less than or equal to the sum of one (1) month's fee
as permitted by section 8.3(c)(2) of this chapter plus the
close-out fee as permitted by section 8.3(d) of this chapter,
unless a greater amount is approved in writing by the
department.
(5) Promptly:
(A) correct any payments that are not made or that are
misdirected as a result of an error by the licensee or other
person in control of the trust account; and
(B) reimburse the contract debtor for any costs or fees
imposed by a creditor as a result of the failure to pay or
misdirection.
(c) A licensee may not commingle money in a trust account
established for the benefit of contract debtors to whom the licensee
is furnishing debt management services with money of other
persons.
(d) A trust account must at all times have a cash balance equal
to the sum of the balances of each contract debtor's account.
(e) If a licensee has established a trust account under subsection
(a), the licensee shall reconcile the trust account at least every
thirty (30) days after receipt of the bank statement. The
reconciliation must compare the cash balance in the trust account
with the sum of the balances in each contract debtor's account. If
the licensee or the licensee's designee has more than one (1) trust
account, each trust account must be individually reconciled.
(f) If a licensee discovers, or has a reasonable suspicion of,
embezzlement or other unlawful appropriation of money held in
trust, the licensee shall:
(1) immediately notify the department in writing; and
(2) unless the department by rule provides otherwise, give
notice to the department describing the remedial action taken
or to be taken not later than five (5) days after the licensee
discovers, or has a reasonable suspicion of, the embezzlement
or other unlawful appropriation.
(g) If a contract debtor terminates an agreement or it becomes
reasonably apparent to a licensee that a plan has failed, the licensee
shall promptly refund to the contract debtor all money paid by or
on behalf of the contract debtor that has not been paid to creditors
less fees that are payable to the licensee under section 8.3(e) of this
chapter.
(h) Before relocating a trust account from one (1) bank to another, a licensee shall inform the department of the name, business address, and telephone number of the new bank. As soon as practicable, the licensee shall inform the department of the account number of the trust account at the new bank.
(1) indicating that the licensee no longer holds funds in trust for the contract debtor; and
(2) listing the name and address of:
(A) each creditor paid in full; and
(B) any creditors remaining unpaid.
(1) Misappropriate or misapply money held in trust.
(2) Exercise or attempt to exercise a power of attorney after a contract debtor has terminated an agreement.
(3) Initiate a transfer from a contract debtor's account at a bank or with another person unless the transfer is:
(A) a return of money to the contract debtor; or
(B) before the termination of an agreement, properly authorized by the agreement and this chapter, and for:
(i) payment to one (1) or more creditors under an agreement; or
(ii) payment of a fee.
(4) Offer a gift or bonus, premium, reward, or other compensation to a debtor for executing an agreement.
(5) Offer, pay, or give:
(A) a gift or bonus;
(B) a premium;
(C) a reward; or
(D) other compensation;
to a person for referring a prospective customer if the person making the referral has a financial interest in the outcome of debt management services provided to the customer.
(6) Receive a bonus, a commission, or other benefit for referring a debtor to a person.
(7) Structure a plan in a manner that would result in a negative amortization of any of a debtor's debts, unless a creditor that is owed a negatively amortizing debt agrees to refund or waive the finance charge upon payment of the principal amount of the debt.
(8) Compensate the licensee's employees on the basis of a formula that incorporates the number of debtors the employee induces to enter into agreements. It is not a violation of this subsection for a licensee to use the number of successfully completed debt management plans as a criterion for compensation for the licensee's employees.
(9) Settle a debt or lead a contract debtor to believe that a payment to a creditor is in settlement of a debt to the creditor unless, at the time of settlement, the contract debtor receives a certification by the creditor that the payment is in full settlement of the debt.
(10) Make a representation that:
(A) the licensee will furnish money to pay bills or prevent attachments;
(B) payment of a certain amount will permit satisfaction of a certain amount or range of indebtedness; or
(C) participation in a plan will or may prevent litigation, garnishment, attachment, repossession, foreclosure, eviction, or loss of employment.
(11) Misrepresent that the licensee is authorized or competent to furnish legal advice or perform legal services.
(12) Represent in the licensee's agreements, disclosures required by this chapter, advertisements, or Internet web site that the licensee is:
(A) a nonprofit entity unless the licensee is organized and properly operating as a nonprofit entity under the law of the state in which entity was formed; or
(B) a tax exempt entity unless the entity has received certification of tax exempt status from the Internal Revenue Service and is properly operating as a nonprofit
entity under the law of the state in which the entity was
formed.
(13) Take a confession of judgment or power of attorney to
confess judgment against a contract debtor.
(14) Employ an unfair, unconscionable, or deceptive act or
practice, including the knowing omission of any material
information.
(b) If a licensee furnishes debt management services to a debtor,
the licensee may not, directly or indirectly, do any of the following:
(1) Purchase a debt or obligation of the debtor.
(2) Receive from or on behalf of the debtor:
(A) a promissory note or other negotiable instrument other
than a check or a demand draft; or
(B) a postdated check or demand draft.
(3) Lend money or provide credit to the debtor.
(4) Obtain a mortgage or other security interest from any
person in connection with the services provided to the debtor.
(5) Except as permitted by federal law, disclose the identity or
identifying information of the debtor or the identity of the
debtor's creditors, except:
(A) to the department, upon proper demand;
(B) to a creditor of the debtor, to the extent necessary to
secure the cooperation of the creditor in a plan; or
(C) to the extent necessary to administer the plan.
(6) Charge the debtor for or provide credit or other
insurance, coupons for goods or services, membership in a
club, access to computers or the Internet, or any other matter
not directly related to debt management services or
educational services concerning personal finance.
(7) Furnish legal advice or perform legal services unless the
person furnishing the advice or performing the services is
licensed to practice law.
(c) This chapter does not authorize any person to engage in the
practice of law.
(d) A licensee may not receive a gift, bonus, premium, reward,
or other compensation, directly or indirectly, for advising,
arranging, or assisting a debtor in connection with obtaining an
extension of credit or other service from a lender or service
provider.
(1) may not use false, misleading, or deceptive advertising; and
(2) shall meet the following conditions in advertising:
(A) An advertisement may not include a statement that states or implies that no financial problem is too great for the licensee to solve.
(B) An advertisement may not include a statement that states or implies that the licensee will use the licensee's own cash to pay the debtor's accounts.
(C) All advertisements must contain the statement "We do not lend money.".
(D) All advertisements must contain the true name and address of the licensee.
(b) In administering this chapter and in order to determine whether this chapter is being complied with by a person engaging in acts subject to this chapter, the department may examine the records of a person and may make investigations of a person as necessary to determine compliance. Records subject to examination under this section include the following:
(1) Training, operating, and policy manuals.
(2) Minutes of:
(A) management meetings; and
(B) other meetings.
(3) Other records that the department determines are necessary to perform the department's investigation or examination.
(c) The department may also administer oaths or affirmations, subpoena witnesses, compel a witness's attendance, adduce evidence, and require the production of any matter that is relevant to the investigation. The department shall determine whether:
(1) the records maintained are sufficient; and
(2) the person has made the required information reasonably
available.
(d) If the department:
(1) investigates; or
(2) examines the books and records of;
a person that is subject to this chapter, the person shall pay all
reasonably incurred costs of the investigation or examination in
accordance with the fee schedule adopted by the department under
IC 28-11-3-5. Any costs required to be paid under this subsection
shall be paid not later than sixty (60) days after the person receives
a notice from the department of the costs being assessed. The
department may impose a fee, in an amount fixed by the
department under IC 28-11-3-5, for each day that the assessed
costs are not paid, beginning on the first day after the sixty (60)
day period described in this subsection.
(e) The department shall be given free access to the records
wherever located. If the person's records are located outside
Indiana, at the discretion of the director, the records shall be made
available to the department at a convenient location within
Indiana, or the person shall pay the reasonable and necessary
expenses for the department or the department's representative to
examine the records where the records are maintained.
(f) If a person fails to:
(1) obey a subpoena without a lawful excuse; or
(2) give testimony;
the department may apply to a civil court for an order compelling
compliance.
(g) The department shall not make public the name or identity
of a person whose acts or conduct the department investigates
under this section or the facts disclosed in the investigation.
However, this subsection does not apply to disclosures of
enforcement proceedings under this chapter.
(h) The department may:
(1) enter into a cooperative arrangement with another federal
or state agency having authority over debt management
companies; and
(2) exchange with the agency information about a person
subject to this chapter, including information obtained during
an examination of the person.
(i) If a person doing business as a debt management company
contracts with an outside vendor to provide a service that would
otherwise be undertaken internally by the person doing business as
a debt management company and be subject to the department's
routine examination procedures, the person that provides the
service to the person doing business as a debt management
company shall, at the request of the director, submit to an
examination by the department. If the director determines that an
examination under this subsection is necessary or desirable, the
examination may be made at the expense of the person to be
examined. If the person to be examined under this subsection
refuses to permit the examination to be made, the director may
order any person doing business as a debt management company
that receives services from the person refusing the examination to:
(1) discontinue receiving one (1) or more services from the
person refusing the examination; or
(2) otherwise cease conducting business with the person
refusing the examination.
(1) Order a debt management company or a director, employee, or other agent of a debt management company to cease and desist from any violations.
(2) Order a debt management company or a person that has caused a violation to correct the violation, including making restitution of money or property to a person aggrieved by a violation.
(3) Impose on a debt management company or a person that causes a violation of this chapter a civil penalty of not more than ten thousand dollars ($10,000) for each violation.
(4) Prosecute a civil action to:
(A) enforce an order;
(B) obtain restitution, an injunction, or other equitable relief; or
(C) accomplish both clauses (A) and (B).
(b) If a person violates or knowingly authorizes, directs, or aids in the violation of a final order issued under subsection (a)(1) or (a)(2), the department may impose a civil penalty of not more than twenty thousand dollars ($20,000) for each violation.
(c) The department may maintain an action in any county to enforce this chapter.
(d) The department may recover the reasonable costs of enforcing this chapter under subsections (a) through (c), including attorney's fees.
(e) In determining the amount of a civil penalty to impose under subsection (a) or (b), the department shall consider:
(1) the seriousness of the violation;
(2) the good faith of the person who violated this chapter;
(3) any previous violations by the person who violated this chapter;
(4) the deleterious effect of the violation on the public;
(5) the net worth of the person who violated this chapter; and
(6) any other factor the department considers relevant to the determination of a civil penalty.
(f) In addition to the revocation provision of section 4 of this chapter, a person who violates section 3, 5, 6, 8,
(b) As used in this section, "federal act" means the Electronic Signatures in Global and National Commerce Act (15 U.S.C. 7001 et seq., as amended).
(c) A licensee may satisfy the requirements of section 7.7, 8, or 9 of this chapter by means of the Internet or other electronic means if the licensee obtains a consumer's consent in the manner provided by Section 101(c)(1) of the federal act.
(d) The disclosures and materials required by section 7.7, 8, or 9 of this chapter shall be presented in a form that is capable of being accurately reproduced for later reference.
(e) With respect to disclosure by means of an Internet web site, the disclosure of the information required by section 7.7 of this chapter must appear on one (1) or more screens that:
(1) contain no other information; and
(2) the debtor must see before proceeding to assent to formation of an agreement.
(f) At the time of providing the materials and agreement required by sections 7.7, 8, and 9 of this chapter, a licensee shall inform the debtor that upon electronic, telephonic, or written request, the licensee shall:
(1) send the debtor a written copy of the materials; and
(2) comply with a request as provided in subsection (g).
(g) If a licensee is requested, after an agreement is completed or terminated, to send a written copy of the materials required by section 7.7, 8, or 9 of this chapter, the licensee shall send the materials at no charge to the debtor not later than three (3) business days after the request. However, the licensee is not required to comply with a request more than once per calendar month or if the licensee reasonably believes the request is made for purposes of harassment.
(h) A licensee that maintains an Internet web site shall disclose on the home page of the licensee's web site or on a page that is clearly and conspicuously connected to the home page by a link that clearly reveals the following:
(1) The licensee's name and all names under which the licensee does business.
(2) The licensee's principal business address, telephone number, and electronic mail address, if any.
(3) The names of the licensee's principal officers.
(i) A licensee may not terminate the licensee's agreement because a consumer who has consented to electronic communication in the manner provided by Section 101 of the federal act withdraws consent as provided in the federal act.
a voluntary contribution from a contract debtor for any service
provided to the contract debtor.
(1) the principal office of a bank;
(2) the principal office of an affiliate;
(3) a branch of an affiliate;
(4) an automated teller machine;
(5) a night depository;
(6) a temporary facility authorized in IC 28-2-13-22.5;
(7) a loan production office;
(8) a deposit production office; or
(9) other service delivery mechanisms not considered by the director to be a branch.
(1) to:
a product, a service, or an investment that is available to or offered by; or
(2) to engage in mergers, consolidations, reorganizations, or other activities or to exercise other powers authorized for;
national banks domiciled in Indiana.
(b) An industrial loan and investment company that intends to exercise any rights and privileges that are:
(1) granted to national banks; but
(2) not authorized for industrial loan and investment companies under the Indiana Code (except for this section) or any rule adopted under the Indiana Code;
shall submit a letter to the department describing in detail the requested rights and privileges granted to national banks that the company intends to exercise. If available, copies of relevant federal law, regulations, and interpretive letters must be attached to the letter submitted by the company.
(c) The department shall promptly notify the requesting company of the department's receipt of the letter submitted under subsection (b). Except as provided in subsection (e), the company may exercise the requested rights and privileges sixty (60) days after the date on which the department receives the letter unless otherwise notified by the department.
(d) The department may deny the requested rights and privileges if the department finds that:
(1) national banks domiciled in Indiana do not possess the requested rights and privileges;
(2) the exercise of the requested rights and privileges by the company would adversely affect the safety and soundness of the company;
(3) the exercise of the requested rights and privileges by the company would result in an unacceptable curtailment of consumer protection; or
(4) the failure of the department to approve the requested rights and privileges will not result in a competitive disadvantage to the company.
(e) The sixty (60) day period referred to in subsection (c) may be extended by the department based on a determination that the company's letter raised issues requiring additional information or additional time for analysis. If the sixty (60) day period is extended under this subsection, the company may exercise the requested rights
and privileges only if the company receives prior written approval from
the department. However:
(1) the department must:
(A) approve or deny the requested rights and privileges; or
(B) convene a hearing;
not later than sixty (60) days after the department receives the
company's letter; and
(2) if a hearing is convened, the department must approve or deny
the requested rights and privileges not later than sixty (60) days
after the hearing is concluded.
(f) The exercise of rights and privileges by a company in
compliance with and in the manner authorized by this section is not a
violation of any provision of the Indiana Code or rules adopted under
IC 4-22-2.
(g) If a company receives approval to exercise the requested rights
and privileges granted to national banks domiciled in Indiana, the
department shall determine by order whether all industrial loan and
investment companies may exercise the same rights and privileges. In
making the determination required by this subsection, the department
must ensure that the exercise of the rights and privileges by all
industrial loan and investment companies will not:
(1) adversely affect their safety and soundness; or
(2) unduly constrain Indiana consumer protection provisions.
(h) If the department denies the request of a company under this
section to exercise any rights and privileges that are granted to national
banks, the company may appeal the decision of the department to the
circuit court with jurisdiction in the county in which the principal
office of the company is located. In an appeal under this section, the
court shall determine the matter de novo.
(b) In conducting an examination of an industrial loan and
investment company, the department shall include an examination of
the affairs of all the industrial loan and investment company's affiliates
necessary to disclose fully:
(1) the relations between the industrial loan and investment
company and its affiliates; and
(2) the effect of the relations described in subdivision (1) upon the
affairs of the industrial loan and investment company.
In conducting the examination of an affiliate of an industrial loan and
investment company, the department has the same powers to examine
the affiliate as the department has to examine the affairs of the
industrial loan and investment company under this section.
(c) If an industrial loan and investment company contracts with
an outside vendor to provide a service that would otherwise be
undertaken internally by the industrial loan and investment
company and be subject to the department's routine examination
procedures, the person that provides the service to the industrial
loan and investment company shall, at the request of the director,
submit to an examination by the department. If the director
determines that an examination under this subsection is necessary
or desirable, the examination may be made at the expense of the
person to be examined. If the person to be examined under this
subsection refuses to permit the examination to be made, the
director may order any industrial loan and investment company
that receives services from the person refusing the examination to:
(1) discontinue receiving one (1) or more services from the
person; or
(2) otherwise cease conducting business with the person.
(1) on the same terms and conditions;
(2) with the same rights and privileges; and
(3) subject to the same duties and obligations;
as provided by law for banks of discount and deposit, trust companies, and other financial institutions.
(b) The power under subsection (a) includes the right to pledge securities or other assets for the repayment of the deposits if the pledge is
(1) to:
a product, a service, or an investment that is available to or offered by; or
(2) to engage in mergers, consolidations, reorganizations, or other activities or to exercise other powers authorized for;
national banks domiciled in Indiana.
(b) Subject to the conditions set forth in this section, a savings bank may exercise the rights and privileges that are or may be granted to national banks domiciled in Indiana.
(c) A savings bank that intends to exercise any rights and privileges that are:
(1) granted to national banks; but
(2) not authorized for a savings bank under the Indiana Code (except for this section) or any rule adopted under the Indiana Code;
shall submit a letter to the department describing in detail the requested rights and privileges granted to national banks that the savings bank intends to exercise. If available, copies of relevant federal law, regulations, and interpretive letters must be attached to the letter submitted by the company.
(d) The department shall promptly notify the requesting savings bank of the department's receipt of the letter submitted under subsection (c). Except as provided in subsection (f), the savings bank may exercise the requested rights and privileges sixty (60) days after the date on which the department receives the letter unless otherwise notified by the department.
(e) The department may deny the requested rights and privileges if the department finds that:
(1) national banks domiciled in Indiana do not possess the requested rights and privileges;
(2) the exercise of the requested rights and privileges by the savings bank would adversely affect the safety and soundness of the savings bank;
(3) the exercise of the requested rights and privileges by the savings bank would result in an unacceptable curtailment of consumer protection; or
(4) the failure of the department to approve the requested rights and privileges will not result in a competitive disadvantage to the
savings bank.
(f) The sixty (60) day period referred to in subsection (d) may be
extended by the department based on a determination that the savings
bank's letter raised issues requiring additional information or additional
time for analysis. If the sixty (60) day period is extended under this
subsection, the savings bank may exercise the requested rights and
privileges only if the savings bank receives prior written approval from
the department. However:
(1) the department must:
(A) approve or deny the requested rights and privileges; or
(B) convene a hearing;
not later than sixty (60) days after the department receives the
savings bank's letter; and
(2) if a hearing is convened, the department must approve or deny
the requested rights and privileges not later than sixty (60) days
after the hearing is concluded.
(g) The exercise of rights and privileges by a savings bank in
compliance with and in the manner authorized by this section is not a
violation of any provision of the Indiana Code or rules adopted under
IC 4-22-2.
(h) If a savings bank receives approval to exercise the requested
rights and privileges granted to national banks domiciled in Indiana,
the department shall determine by order whether all savings banks may
exercise the same rights and privileges. In making the determination
required by this subsection, the department must ensure that the
exercise of the rights and privileges by all savings banks will not:
(1) adversely affect their safety and soundness; or
(2) unduly constrain Indiana consumer protection provisions.
(i) If the department denies the request of a savings bank under this
section to exercise any rights and privileges that are granted to national
banks, the savings bank may appeal the decision of the department to
the circuit court with jurisdiction in the county in which the principal
office of the savings bank is located. In an appeal under this section,
the court shall determine the matter de novo.
(1) "Automated teller machine" (ATM) means a piece of unmanned electronic or mechanical equipment that performs routine financial transactions for authorized individuals.
(2) "Branch office" means an office, agency, or other place of
business at which deposits are received, share drafts are paid, or
money is lent to members of a credit union. The term does not
include:
(A) the principal office of a credit union;
(B) the principal office of a credit union affiliate;
(C) a branch office of a credit union affiliate;
(D) an automated teller machine; or
(E) a night depository.
(3) "Credit union" is a cooperative, nonprofit association,
incorporated under this chapter, for the purposes of educating its
members in the concepts of thrift and to encourage savings among
its members. A credit union should provide a source of credit at
a fair and reasonable rate of interest and provide an opportunity
for its members to use and control their own money in order to
improve their economic and social condition.
(4) "Department" refers to the department of financial institutions.
(5) "Surplus" means the credit balance of undivided earnings after
losses. The term does not include statutory reserves.
(6) "Unimpaired shares" means paid in shares less any losses for
which no reserve exists and for which there is no charge against
undivided earnings.
(7) "Related credit union service organization" means, in
reference to a credit union, a credit union service organization (as
defined and formed under Part 712 of the regulations of the
National Credit Union Administration, 12 CFR 712) in which
the credit union has invested under section 9(3)(J) 9(a)(4) of this
chapter.
(8) "Premises" means any office, branch office, suboffice, service
center, parking lot, real estate, or other facility where the credit
union transacts or will transact business.
(9) "Furniture, fixtures, and equipment" means office furnishings,
office machines, computer hardware, computer software,
automated terminals, and heating and cooling equipment.
(10) "Fixed assets" means:
(A) premises; and
(B) furniture, fixtures, and equipment.
(11) "Audit period" means a twelve (12) month period designated
by the board of directors of a credit union.
(12) "Community" means:
(A) a second class city;
(B) a third class city;
(C) a town;
(D) a county other than a county containing a consolidated city;
(E) a census tract;
(F) a township; or
(G) any other municipal corporation (as defined in IC 36-1-2-10).
(13) "Control of a related interest" refers to a situation in which an individual directly or indirectly, or through or in concert with one (1) or more other individuals, possesses any of the following:
(A) The ownership of, control of, or power to vote at least twenty-five percent (25%) of any class of voting securities of the related interest.
(B) The control in any manner of the election of a majority of the directors of the related interest.
(C) The power to exercise a controlling influence over the management or policies of the related interest. For purposes of this clause, an individual is presumed to have control, including the power to exercise a controlling influence over the management or policies of a related interest, if the individual:
(i) is an executive officer or a director of the related interest and directly or indirectly owns, controls, or has the power to vote more than ten percent (10%) of any class of voting securities of the related interest; or
(ii) directly or indirectly owns, controls, or has the power to vote more than ten percent (10%) of any class of voting securities of the related interest and no other person owns, controls, or has the power to vote a greater percentage of that class of voting securities.
(14) "Executive officer" includes any of the following officers of a credit union:
(A) The chairman of the board of directors.
(B) The president.
(C) A vice president.
(D) The cashier.
(E) The secretary.
(F) The treasurer.
(15) "Immediate family", for purposes of section 17.1 of this chapter, means the spouse of an individual, the individual's minor children, and any of the individual's children, including adults, residing in the individual's home.
(16) "Officer" means any individual who is not solely a director
or committee member and participates or has the authority to
participate in major policymaking functions of a credit union,
regardless of whether:
(A) the individual has an official title;
(B) the individual's title designates the individual as an
assistant; or
(C) the individual is serving without salary or other
compensation.
(17) "Related interest", with respect to an individual, means:
(A) a partnership, a corporation, or another business
organization that is controlled by the individual; or
(B) a political campaign committee:
(i) controlled by the individual; or
(ii) the funds or services of which benefit the individual.
(18) Except as provided in section 9(3)(J) section 9(a)(4) of this
chapter, "capital and surplus" means the sum of:
(A) undivided profits;
(B) reserve for contingencies;
(C) regular reserve; and
(D) allowance for loan and lease losses.
(1) To issue shares of its capital stock to its members. No commission or compensation shall be paid for securing members or for the sale of shares.
(2) To make loans to officers, directors, or committee members under
(3) To invest in any of the following:
(A) Bonds, notes, or certificates that are the direct or indirect obligations of the United States, or of the state, or the direct obligations of a county, township, city, town, or other taxing district or municipality or instrumentality of Indiana and that are not in default.
(B) Bonds or debentures issued by the Federal Home Loan Bank Act (12 U.S.C. 1421 through 1449) or the Home Owners' Loan Act (12 U.S.C. 1461 through 1468).
(C)
(D) Mortgages on real estate situated in Indiana which are fully insured under Title 2 of the National Housing Act (12
U.S.C. 1707 through 1715z).
(E) Obligations issued by farm credit banks and banks for
cooperatives under the Farm Credit Act of 1971 (12 U.S.C.
2001 through 2279aa-14).
(F) In savings and loan associations, other credit unions that
are insured under IC 28-7-1-31.5, and certificates of
indebtedness or investment of an industrial loan and
investment company if the association or company is federally
insured. Not more than twenty percent (20%) of the assets of
a credit union may be invested in the shares or certificates of
an association or company; nor more than forty percent (40%)
in all such associations and companies.
(G) Corporate credit unions.
(H) Federal funds or similar types of daily funds transactions
with other financial institutions.
(I) Mutual funds created and controlled by credit unions, credit
union associations, or their subsidiaries. Mutual funds referred
to in this clause may invest only in instruments that are
approved for credit union purchase under this chapter.
(J) Shares, stocks, or obligations of any credit union service
organization (as defined in Section 712 of the Rules and
Regulations of the National Credit Union Administration) with
the approval of the department. Not more than ten percent
(10%) of the capital and surplus and unimpaired shares of the
credit union may be invested under this clause. However, a
credit union may invest more than ten percent (10%) of the
capital and surplus and unimpaired shares with the prior
approval of the department.
(I) Shares or certificates of an open-end management
investment company registered with the Securities and
Exchange Commission under the Investment Company Act
of 1940 (15 U.S.C. 80a-1 through 15 U.S.C. 80a-3 and 15
U.S.C. 80a-4 through 15 U.S.C. 80a-64), if all of the
following conditions are met:
(i) The fund's assets consist of and are limited to
securities in which a credit union may invest directly.
(ii) The credit union has an equitable and undivided
interest in the underlying assets of the fund.
(iii) The credit union is not liable for acts or obligations
of the fund.
(iv) The credit union's investment in any one (1) fund
does not exceed fifteen percent (15%) of the amount of
the credit union's net worth.
(K) (J) For a credit union that is well capitalized (as defined
in Section Part 702 of the Rules and Regulations of the
National Credit Union Administration, 12 CFR 702),
investment securities, as may be defined by a statute or a
policy or rule of the department and subject to the following:
(i) The department may prescribe, by policy or rule,
limitations or restrictions on a credit union's investment in
investment securities.
(ii) The total amount of any investment securities purchased
or held by a credit union may never exceed at any given time
ten percent (10%) of the capital and surplus of the credit
union. However, the limitations imposed by this item do not
apply to investments in the direct or indirect obligations of
the United States or in the direct obligations of a United
States territory or insular possession, or in the direct
obligations of the state or any municipal corporation or
taxing district in Indiana.
(iii) A credit union may not purchase for its own account
any bond, note, or other evidence of indebtedness that is
commonly designated as a security that is speculative in
character or that has speculative characteristics. For the
purposes of this item, a security is speculative or has
speculative characteristics if at the time of purchase the
security is in default or is rated below the first four (4) rating
classes by a generally recognized security rating service.
(iv) A credit union may purchase for its own account a
security that is not rated by a generally recognized security
rating service if the credit union at the time of purchase
obtains financial information that is adequate to document
the investment quality of the security.
(v) A credit union that purchases a security for its own
account shall maintain sufficient records of the security to
allow the security to be properly identified by the
department for examination purposes.
(vi) Except as otherwise authorized by this title, a credit
union may not purchase any share of stock of a corporation.
If a credit union possesses stock or another equity
investment as a result of a loan default, the credit union
shall dispose of the investment within a reasonable
period that does not exceed one (1) year or a longer
period if approved by the department.
(vii) Subject to items (i) through (iv), a credit union may purchase yankee dollar deposits, eurodollar deposits, banker's acceptances, deposit notes, bank notes with original weighted average maturities of less than five (5) years, and investments in obligations of, or issued by, any state or political subdivision (including any agency, corporation, or instrumentality of a state or political subdivision).
(4) With the prior approval of the department, and subject to the limitations of this subsection, a credit union may organize, invest in, or loan money to a credit union service organization (as defined in Part 712 of the regulations of the National Credit Union Administration, 12 CFR 712). A credit union may not loan or invest in a credit union service organization if the aggregate amount of all such loans or investments in a particular credit union service organization is greater than ten percent (10%) of the capital, surplus, and unimpaired shares of the credit union without the prior written approval of the department. A credit union may organize, invest in, or loan money to a credit union service organization described in this subdivision only if the following requirements are met:
(A) The credit union service organization is adequately capitalized or has a reasonable plan for adequate capitalization if the credit union service organization is to be formed or is newly formed.
(B) The credit union service organization is structured and operated as a separate legal entity from the credit union.
(C) The credit union obtains a written legal opinion that the credit union service organization is structured and operated in a manner that limits the credit union's potential liability for the debts and liabilities of the credit union service organization to not more than the loss of money invested in or loaned to the credit union service organization by the credit union.
(D) The credit union service organization agrees in writing to prepare financial statements and provide the financial statements to the credit union at least quarterly, and to the
department upon request.
(E) The credit union service organization agrees in writing
to obtain an audit of the credit union service organization
from a certified public accountant at least annually and
provide a copy of each audit report to the credit union, and
to the department upon request. A wholly owned credit
union service organization is not required to obtain a
separate annual audit if the credit union service
organization is included in the annual consolidated audit
of the credit union that is the credit union service
organization's parent.
(F) The credit union service organization operates in
compliance with all applicable federal and state laws.
(4) (5) To deposit its funds into:
(A) depository institutions that are federally insured; or
(B) state chartered credit unions that are privately insured by
an insurer approved by the department.
(5) (6) To purchase, hold, own, or convey real estate as may be
conveyed to the credit union in satisfaction of debts previously
contracted or in exchange for real estate conveyed to the credit
union.
(6) (7) To own, hold, or convey real estate as may be purchased
by the credit union upon judgment in its favor or decrees of
foreclosure upon mortgages.
(7) (8) To issue shares of stock and upon the terms, conditions,
limitations, and restrictions and with the relative rights as may be
stated in the bylaws of the credit union, but no stock may have
preference or priority over the other to share in the assets of the
credit union upon liquidation or dissolution or for the payment of
dividends except as to the amount of the dividends and the time
for the payment of the dividends as provided in the bylaws.
(8) (9) To charge the member's share account for the actual cost
of a necessary locator service when the member has failed to keep
the credit union informed about the member's current address.
The charge shall be made only for amounts paid to a person or
concern normally engaged in providing such service, and shall be
made against the account or accounts of any one (1) member not
more than once in any twelve (12) month period.
(9) (10) To transfer to an accounts payable account, a dormant
account, or a special account share accounts which have been
inactive, except for dividend credits, for a period of at least two
(2) years. The credit union shall not consider the payment of
dividends on the transferred account.
(10) (11) To invest in fixed assets with the funds of the credit
union. An investment in fixed assets in excess of five percent
(5%) of its assets is subject to the approval of the department. A
credit union may rent excess space at the credit union's main
office or branch as a source of income.
(11) (12) To establish branch offices, upon approval of the
department, provided that all books of account shall be
maintained at the principal office.
(12) (13) To pay an interest refund on loans proportionate to the
interest paid during the dividend period by borrowers who are
members at the end of the dividend period.
(13) (14) To purchase life savings and loan protection insurance
for the benefit of the credit union and its members, if:
(A) the coverage is placed with an insurance company licensed
to do business in Indiana; and
(B) no officer, director, or employee of the credit union
personally benefits, directly or indirectly, from the sale or
purchase of the coverage.
(14) (15) To sell and cash negotiable checks, travelers checks,
and money orders for members.
(15) (16) To purchase members' notes from any liquidating credit
union, with written approval from the department, at prices agreed
upon by the boards of directors of both the liquidating and the
purchasing credit unions. However, the aggregate of the unpaid
balances of all notes of liquidating credit unions purchased by any
one (1) credit union shall not exceed ten percent (10%) of the
purchasing credit union's capital and surplus unless special
written authorization has been granted by the department.
(16) (17) To exercise such incidental powers necessary or
requisite to enable it to carry on effectively the business for which
it is incorporated.
(17) (18) To act as a custodian or trustee of any trust created or
organized in the United States and forming part of a tax
advantaged savings plan which qualifies or qualified for specific
tax treatment under Section 223, 401(d), 408, 408A, or 530 of the
Internal Revenue Code, if the funds of the trust are invested only
in share accounts or insured certificates of the credit union.
(18) (19) To issue shares of its capital stock or insured certificates
to a trustee or custodian of a pension plan, profit sharing plan, or
stock bonus plan which qualifies for specific tax treatment under
Sections 401(d) or 408(a) of the Internal Revenue Code.
(A) granted to federal credit unions; but
(B) not authorized for credit unions under the Indiana Code (except for this section) or any rule adopted under the Indiana Code;
if the credit union complies with section 9.2 of this chapter.
(A) exempt from taxation under Section 501(c)(3) of the Internal Revenue Code; and
(B) located or conducting activities in communities in which the credit union does business.
Participation may be in the form of either charitable contributions or participation loans. In either case, disbursement of funds through the administering organization is not required to be limited to members of the credit union. Total contributions or participation loans may not exceed one tenth of one percent
(ATM):
(A) at any location within Indiana; or
(B) as permitted by the laws of the state in which the
automated teller machine is to be located.
(26) (27) To demand and receive, for the faithful performance and
discharge of services performed under the powers vested in the
credit union by this article:
(A) reasonable compensation, or compensation as fixed by
agreement of the parties;
(B) all advances necessarily paid out and expended in the
discharge and performance of its duties; and
(C) unless otherwise agreed upon, interest at the legal rate on
the advances referred to in clause (B).
(27) (28) Subject to any restrictions the department may impose,
to become the owner or lessor of personal property acquired upon
the request and for the use of a member and to incur additional
obligations as may be incident to becoming an owner or lessor of
such property.
(b) A credit union shall maintain files containing credit and
other information adequate to demonstrate evidence of prudent
business judgment in exercising the investment powers granted
under this chapter or by rule, order, or declaratory ruling of the
department.
(1) to:
(A) create;
(B) deliver;
(C) acquire; or
(D) sell;
a product, a service, or an investment that is available to or offered by; or
(2) to engage in mergers, consolidations, reorganizations, or other activities or to exercise other powers authorized for;
federal credit unions domiciled in Indiana.
(b) A credit union that intends to exercise any rights and privileges that are:
(1) granted to federal credit unions; but
(2) not authorized for credit unions under the Indiana Code (except for this section) or any rule adopted under the Indiana
Code;
shall submit a letter to the department describing in detail the requested
rights and privileges granted to federal credit unions that the credit
union intends to exercise. If available, copies of relevant federal law,
regulations, and interpretive letters must be attached to the letter
submitted by the credit union.
(c) The department shall promptly notify the requesting credit union
of the department's receipt of the letter submitted under subsection (b).
Except as provided in subsection (e), the credit union may exercise the
requested rights and privileges sixty (60) days after the date on which
the department receives the letter unless otherwise notified by the
department.
(d) The department may deny the requested rights and privileges if
the department finds that:
(1) federal credit unions domiciled in Indiana do not possess the
requested rights and privileges;
(2) the exercise of the requested rights and privileges by the credit
union would adversely affect the safety and soundness of the
credit union;
(3) the exercise of the requested rights and privileges by the credit
union would result in an unacceptable curtailment of consumer
protection; or
(4) the failure of the department to approve the requested rights
and privileges will not result in a competitive disadvantage to the
credit union.
(e) The sixty (60) day period referred to in subsection (c) may be
extended by the department based on a determination that the credit
union's letter raised issues requiring additional information or
additional time for analysis. If the sixty (60) day period is extended
under this subsection, the credit union may exercise the requested
rights and privileges only if the credit union receives prior written
approval from the department. However:
(1) the department must:
(A) approve or deny the requested rights and privileges; or
(B) convene a hearing;
not later than sixty (60) days after the department receives the
credit union's letter; and
(2) if a hearing is convened, the department must approve or deny
the requested rights and privileges not later than sixty (60) days
after the hearing is concluded.
(f) The exercise of rights and privileges by a credit union in
compliance with and in the manner authorized by this section is not a
violation of any provision of the Indiana Code or rules adopted under
IC 4-22-2.
(g) If a credit union receives approval to exercise the requested
rights and privileges granted to federal credit unions domiciled in
Indiana, the department shall determine by order whether all credit
unions may exercise the same rights and privileges. In making the
determination required by this subsection, the department must ensure
that the exercise of the rights and privileges by all credit unions will
not:
(1) adversely affect their safety and soundness; or
(2) unduly constrain Indiana consumer protection provisions.
(h) If the department denies the request of a credit union under this
section to exercise any rights and privileges that are granted to federal
credit unions, the credit union may appeal the decision of the
department to the circuit court with jurisdiction in the county in which
the principal office of the credit union is located. In an appeal under
this section, the court shall determine the matter de novo.
(1) persons having a common bond of occupation, trade, or professional association;
(2) members of a labor organization;
(3) members of a church;
(4) persons engaged in a common trade or profession within a well defined geographical location;
(5) employees of the credit union;
(6) persons who are members of a farm bureau cooperative, or other farm bureau organization, and who have subscribed to one (1) or more shares; or
(7) persons who reside or are employed within a community.
(b) A credit union may expand its membership with an additional qualified group or groups upon prior approval of the department.
(c) Membership cards must be kept on file and maintained in the credit union's main office for inspection by examiners and must contain at least the following information:
(1) Account number, name, address, date of birth, signature of member, and the date signed.
(2) A statement that the member is eligible for membership in the credit union by reason of employment, membership, affiliation, association, or other relationship with the organization, institution, corporation, or entity included in the credit union's field of membership.
(3) Date, signature, and title of person authorized to record approval by the board, membership officer, or executive committee.
(1) became a member of a credit union; and
(2) did not qualify under section 10(a) of this chapter or the articles of incorporation of the credit union.
The membership of any illegal member, as determined by the department, shall be terminated and all accounts shall be purged from the active share accounts of the credit union within the period specified in writing by the department. However, a loan agreement between a terminated member and the credit union is unaffected by the termination and, if a loan involving an illegal member is secured by shares, the share account, to the extent encumbered by the loan, remains valid until unencumbered.
(1) A credit union may accept a trust as a member if:
(A) any of the settlors living at the time of application are eligible for membership; or
(B) none of the settlors is living at the time of application and one (1) or more beneficiaries are eligible for membership.
(2) An account owned by one (1) or more individuals may be titled or retitled in the name of a trust and not in the name of individuals if all of the following are met:
(A) The trust is eligible for membership in the credit union under subdivision (1).
(B) Each owner of the account consents in writing to titling or retitling the account in the name of the trust.
(C) Any beneficiaries listed on the account are removed as
beneficiaries by the owners.
(D) The account is an account that provides tax deferrals
or any other tax benefit under state or federal law.
(3) If an account is retitled in the name of a trust under
subdivision (2), the membership of an individual who had
owned all or an interest in the account is terminated unless
the individual:
(A) is a member based on ownership of another account;
or
(B) qualifies for, applies for, and is accepted into
membership.
(b) If a credit union contracts with an outside vendor to provide a service that would otherwise be undertaken internally by the credit union and be subject to the department's routine examination procedures, the person that provides the service to the credit union shall, at the request of the director, submit to an examination by the department. If the director determines that an examination under this subsection is necessary or desirable, the examination may be made at the expense of the person to be examined. If the person to be examined under this subsection refuses to permit the examination to be made, the director may order any credit union that receives services from the person refusing the examination to:
(1) discontinue receiving one (1) or more services from the person; or
(2) otherwise cease conducting business with the person.
(b) The bylaws:
(1) may provide for a credit committee; and
(2) if a credit committee is provided for, must state whether the credit committee is to be elected by the members or appointed by the board of directors.
(c) The credit committee must consist of not fewer than three (3) nor more than seven (7) members. A director may not be a member of either the credit committee or the supervisory committee.
(d) Each member of the board and each member of the credit committee or the supervisory committee shall take an oath. The length of the term of a member of the board or of the credit committee or the supervisory committee must be set forth in the bylaws.
(e) If a credit union replaces the chief executive officer of the credit union, the credit union shall give the department written notice of the replacement not later than thirty (30) days after replacing a person as the chief executive officer.
(f) Each individual elected or appointed to serve as a director, supervisory committee member, or credit committee member of a credit union, or as a member of any other committee that performs significant ongoing functions relating to the ongoing operations of the credit union, shall meet all of the following criteria:
(1) The individual is a member of the credit union and in good standing according to reasonable criteria established by the credit union board.
(2) The individual is acceptable as a bonding risk by a bonding company licensed to do business in this state.
(3) The individual has not been removed as a director, officer, committee member, or employee of a financial institution by a federal regulator, a state regulator, or a court with jurisdiction.
(4) The department has not removed the individual as a director, officer, committee member, or employee of a credit union, financial institution, or other legal entity under the department's enforcement powers under any law of this state.
(5) The individual has not been convicted of a crime involving dishonesty or breach of trust.
(6) The individual is not habitually negligent in paying the individual's financial obligations as determined by criteria
reasonably established by the credit union board.
(7) The individual has not been convicted by a court with
jurisdiction of a violation, or found in violation by a court
with jurisdiction or the department, of any law of this state
enforced or administered by the department.
(g) If an individual no longer meets one (1) or more of the
requirements of subsection (f) while serving as a director,
supervisory committee member, or credit committee member of a
credit union, or as a member of any other committee that performs
significant ongoing functions relating to the ongoing operations of
the credit union, the:
(1) individual immediately shall be removed from that office
without further action of the members of the credit union
board; and
(2) credit union shall appoint or elect a replacement to fill the
vacancy in the manner described in the bylaws.
(1) a chairperson;
(2) a vice chairperson or vice chairpersons;
(3) a secretary;
(4) a treasurer; and
(5) other officers determined necessary by the board of directors.
(b) The board may appoint officers of the credit union.
(c) The office of secretary and treasurer may be held by the same person. The board may appoint:
(1) an assistant secretary;
(2) an assistant treasurer; or
(3) both an assistant secretary and an assistant treasurer.
(d) The board of directors shall have the general management of the affairs, funds, and records of the credit union and shall meet at least monthly, in person or by any means of communication by which all directors participating may simultaneously hear each other during the meeting. A director participating in a meeting in accordance with this subsection is considered to be present in person at the meeting. Minutes of every meeting of the board of directors or executive committee shall be kept and maintained.
(e) The board may appoint an executive committee to exercise
authority delegated to it by the board. All actions taken by the
executive committee shall be subject to ratification by the board. The
board retains ultimate responsibility for authority delegated to an
executive committee.
(f) Unless the bylaws provide otherwise, It is the duty of the
directors to do the following:
(1) To act upon all applications for membership unless the board
has appointed a membership officer. The board shall receive the
report of the membership officer monthly and shall act upon all
those applications for membership not approved by the
membership officer.
(2) To determine rates of interest on loans.
(3) (1) To determine:
(A) the maximum number of shares which may be held by a
member; and
(B) the maximum amount which may be loaned to a member.
(4) To declare dividends.
(5) (2) To amend the bylaws, provided that the qualifications for
membership in the credit union are principally defined in the
articles of incorporation.
(6) (3) To fill vacancies on the board and the credit committee
until the next election.
(7) To invest the funds of the credit union or to delegate the
authority for investments to an executive committee or manager.
However, the board of directors shall review all investments made
by the executive committee or manager at least monthly.
(8) (4) To set the compensation of members of the board, credit
committee, or supervisory committee.
(9) (5) To establish and annually review written lending and
investment policies and maintain the policies on file in other
policies necessary for the prudent operation of the credit union.
(6) To approve an annual operating budget for the credit
union.
(g) The board may appoint loan officers. Each loan officer shall
furnish to the credit committee or to the board a record of each loan
approved or denied at its next meeting. A loan officer, including the
treasurer or assistant treasurer, shall not have authority to disburse
funds of the credit union for any loan which has been approved by the
loan officer. Not more than one (1) member of the credit committee
may be appointed as loan officer.
(h) A credit union board is responsible for the performance of
all of the duties listed in this subsection. The board may delegate
the performance of the duties to the chief executive officer, who
may further delegate one (1) or more of the following duties:
(1) Approving, disapproving, or otherwise acting on
applications for membership.
(2) Determining the interest rates on loans and on deposits.
(3) Hiring employees other than the chief executive officer and
fixing the employees' compensation.
(4) Making and selling investments according to investment
policies adopted by the board.
(5) Designating one (1) or more depositories for funds.
(6) Establishing procedures to implement policies of the credit
union board.
(7) Establishing internal controls as necessary.
(8) Determining the amount of a dividend after providing for
any required reserves and declaring the dividend.
(i) The board of directors by a majority vote may suspend or
remove any officer from the officer's duties as an officer.
(j) Unless specifically prohibited by the bylaws, if this chapter
requires or allows a credit union board to take an action at a
meeting, the board may take that action without a meeting if a
consent in writing setting forth the action taken is signed by all of
the directors entitled to vote on the matter. A written consent
under this subsection must contain one (1) or more written
approvals, each of which sets forth the action taken and bears the
signature of one (1) or more directors. The directors shall deliver
the directors' signed approvals to the secretary, and the secretary
shall file the approvals in the corporate records of the credit union.
An action taken by written consent under this subsection is
effective on the date that all the directors have approved the
consent unless the consent specifies a different effective date. A
consent signed by all the directors has the same effect as a
unanimous vote. The credit union may represent that the action
was approved by a unanimous vote in any document filed with the
department under this act.
(b) Unless a matter involves setting dividends, loan rates, or fees for services or other general policy applicable to all members of the credit union, a director, a committee member, an officer, or an employee of a credit union shall not in any manner, directly or
indirectly, participate in the deliberation or board action on any
matter that affects the director's, committee member's, officer's,
or employee's pecuniary interest or the pecuniary interest of an
entity other than the credit union in which the director, committee
member, officer, or employee is interested.
(c) If one (1) or more directors are disqualified from
participating in a matter before the credit union board under
subsection (b), the remaining qualified directors present at the
meeting, if together with the disqualified director constitutes a
quorum, may by majority vote exercise all the powers of the board
with respect to the matter under consideration. If all of the
directors are disqualified, the members of the credit union shall act
on the matter.
(d) If one (1) or more committee members are disqualified from
participating in a matter before the committee under subsection
(b), the remaining qualified committee members, if together with
the disqualified committee member constitutes a quorum, may by
majority vote exercise all the powers of the committee with respect
to the matter under consideration. If all the committee members
are disqualified, the credit union board shall act on the matter.
(b) Loans to members may be made only under the following terms and conditions:
(1) All loans shall be evidenced by notes signed by the borrowing member.
(2) Except as otherwise provided in this section, the terms of any loan to a member with a maturity of more than six (6) months shall provide for principal and interest payments that will amortize the obligation in full within the terms of the loan contract. If the income of the borrowing member is seasonal, the terms of the loan contract may provide for seasonal amortization.
(3) Loans may be made upon the security of improved or unimproved real estate. Except as otherwise specified in this section, such loans must be secured by a first lien upon real estate
prior to all other liens, except for taxes and assessments not
delinquent, and may be made with repayment terms other than as
provided in subdivision (2). When the amount of a loan is at least
two hundred fifty thousand dollars ($250,000), the fair cash value
of real estate security shall be determined by a written appraisal
made by one (1) or more qualified state licensed or certified
appraisers designated by the board of directors. The credit union
loan folder for real estate mortgage loans shall include: when
applicable:
(A) the loan application;
(B) the mortgage instrument;
(C) the note;
(D) the disclosure statement;
(E) the documentations documentation of property insurance;
(F) an appraisal on the real estate for which the loan is made;
and
(G) the attorney's opinion of titles or a certificate of title
insurance on the real estate upon which the mortgage loan is
made.
(4) Loans made upon security of real estate are subject to the
following restrictions:
(A) Real estate loans in which no principal amortization is
required shall provide for the payment of interest at least
annually and shall mature within five (5) years of the date of
the loan unless extended and shall not exceed fifty percent
(50%) of the fair cash value of the real estate used as security.
(B) Real estate loans on improved real estate, except for
variable rate mortgage loans and rollover mortgage loans
provided for in subdivision (5), shall require substantially
equal payments at successive intervals of not more than one
(1) year, shall mature within thirty (30) years, and shall not
exceed one hundred percent (100%) of the fair cash value of
the real estate used as security.
(C) Real estate loans on unimproved real estate may be made.
The terms of the loan shall:
(i) require substantially equal payments of interest and
principal at successive intervals of one (1) year or less;
(ii) mature within ten (10) years; and
(iii) not exceed eighty-five percent (85%) of the fair cash
value of the real estate used as security.
(D) Loans primarily secured by a mortgage which constitutes
a second lien on improved real estate may be made only if the
aggregate amount of all loans on the real estate does not
exceed one hundred percent (100%) of the fair cash value of
the real estate after such loan is made. Repayment terms shall
be in accordance with subdivision (2).
(E) Real estate loans may be made for the construction of
improvements to real property. Funds borrowed may be
advanced as work on the improvements progresses.
Repayment terms must comply with subdivision (2).
(5) Subject to the limitations of subdivision (3), variable rate
mortgage loans and rollover mortgage loans may be made under
the same limitations and rights provided state chartered savings
associations under IC 28-1-21.5 (before its repeal) or IC 28-15 or
federal credit unions.
(6) As used in this subdivision, "originating lender" means the
participating lender with which the member contracts. A
credit union may participate with other state and federal
depository financial institutions (as defined in IC 28-1-1-6) or
credit union service organizations in making loans to credit
union members and may sell a participating interest in any of its
loans under written participation loan policies established by
the board of directors. However, the credit union may not sell
more than ninety percent (90%) of the principal of participating
loans outstanding at the time of sale. A participating credit
union that is not the originating lender may participate only
in loans made to the credit union's own members or to
members of another participating state or federal credit
union. A master participation agreement must be properly
executed. The agreement must include provisions for
identifying, either through documents incorporated by
reference or directly in the agreement, the participation loan
or loans before the sale of the loans.
(7) Notwithstanding subdivisions (1) through (6), a credit union
may make any of the following:
(A) Any loan that may be made by a federal credit union.
However, IC 24-4.5 applies to any loan that is:
(i) made under this clause; and
(ii) within the scope of IC 24-4.5.
Any provision of federal law that is in conflict with IC 24-4.5
does not apply to a loan made under this clause.
(B) Subject to subdivision (3), any alternative mortgage loan
(as defined in IC 28-15-11-2) that may be made by a savings
association (as defined in IC 28-15-1-11) under IC 28-15-11.
A loan made under this clause by a credit union is subject to
the same terms, conditions, exceptions, and limitations that
apply to an alternative mortgage loan made by a savings
association under IC 28-15-11.
(8) A credit union may make a loan under either:
(A) subdivisions (2) through (6); or
(B) subdivision (7);
but not both. A credit union shall make an initial determination as
to whether to make a loan under subdivisions (2) through (6) or
under subdivision (7). If the credit union determines that a loan or
category of loans is to be made under subdivision (7), the written
loan policies of the credit union must include that determination.
A credit union may not combine the terms and conditions that
apply to a loan made under subdivisions (2) through (6) with the
terms and conditions that apply to a loan made under subdivision
(7) to make a loan not expressly described and authorized either
under subdivisions (2) through (6) or under subdivision (7).
(c) Nothing in this section prevents any credit union from taking an
indemnifying or second mortgage on real estate as additional security.
(1) The loan must comply with all requirements under this chapter that apply to loans made to other borrowers.
(2) The loan may not be on terms more favorable than those extended to other borrowers.
(3) The borrower may not:
(A) take part in the consideration of; or
(B) vote on;
the borrower's loan application.
(4) Except as provided in subsection (b), a credit union may not make a loan under this section to an individual, the individual's immediate family, or the individual's related interests if the amount of the loan, either by itself or when added to the amounts of all other loans made under this section to the individual, the individual's immediate family, or the individual's related interests, exceeds the greater of:
(A) five percent (5%) of the credit union's capital and surplus; or
(B) twenty-five thousand dollars ($25,000);
unless the loan is first approved by the credit union's board of directors.
(5) A credit union may not make a loan under this section to an individual, the individual's immediate family, or the individual's related interests if the amount of the loan, either by itself or when added to the amounts of all other loans made under this section to the individual, the individual's immediate family, or the individual's related interests, exceeds the lending limits set forth in IC 28-7-1-39.
(6) The total amount of all loans made under this section may not exceed the credit union's capital and surplus. However, the limit set forth in this subdivision does not apply to either of the following:
(A) A loan, in any amount, secured by a perfected security interest in bonds, notes, certificates of indebtedness, or treasury bills of the United States or in other obligations fully guaranteed as to principal and interest by the United States.
(B) A loan, in any amount, secured by a perfected security interest in a segregated deposit account in the lending credit union.
(b) Approval by the board of directors under subsection (a)(4) is not required for an extension of credit made under a line of credit approved under subsection (a)(4) if the extension of credit is made not later than fourteen (14) months after the line of credit was approved.
(c) The department may apply the provisions of 12 CFR 215 (Regulation O) in applying and administering this section.
(d) If a loan made to or cosigned, endorsed, or guaranteed by a director or a member of the supervisory, credit, or other committee is more than three (3) months delinquent, the individual:
(1) is automatically removed from the individual's position as director or committee member; and
(2) is ineligible to serve as a director or committee member for two (2) years.
The director may waive the application of this subsection if the director determines that it is in the best interests of the credit union.
(b) The supervisory committee shall supervise the acts of the board
of directors, credit committee, and officers.
(c) By a majority vote, the supervisory committee may call a
meeting of the shareholders to consider any violation of this chapter,
or of the bylaws, or any practice of the credit union which, in the
opinion of the committee is unsafe and unauthorized.
(d) The supervisory committee shall fill vacancies in its own
number until the next annual meeting of the members.
(e) At the close of the audit period, the supervisory committee shall
make or cause to be made a thorough audit of the credit union for each
audit period and shall make a full report to the directors. The audit
shall be made at any time during the one hundred twenty (120) days
following the close of the audit period. Tapes, work papers, schedules,
and evidence of verification of accounts shall be retained until the next
examination by the department. A summary of the report shall be read
at the annual meeting and shall be filed and preserved with the records
of the credit union.
(f) A credit union with assets of at least ten million dollars
($10,000,000) five million dollars ($5,000,000) shall have an annual
audit performed by an outside professional accounting firm. The
department may require a professional outside audit to be performed
upon any credit union when the department questions the safety and
soundness of the credit union.
(g) Minutes of every meeting of the supervisory committee shall
be kept and maintained.
FOLLOWS [EFFECTIVE JULY 1, 2010]: Sec. 20.1. (a) Shares may
be issued as the bylaws provide. The provisions of IC 28-1-20-6 apply
to loans to any borrower and shall inure to the benefit of the credit
union. Shares may be issued in a joint tenancy with right of
survivorship, but no joint tenant shall be permitted to vote, obtain
loans, or hold office, unless the tenant is a member.
(b) A credit union may issue shares to and receive deposits from
a minor. The minor may withdraw the deposits or shares and any
dividends or interest on the deposits or shares. A deposit,
investment in a share, or withdrawal under this subsection by a
minor is valid and enforceable. The minor is considered an adult
with respect to the deposit, investment, or withdrawal.
(b) A credit union may receive deposits of state and federal public funds, including the right to pledge securities or other assets for the repayment of the deposits if the pledge is permitted by applicable law or regulation.
(b) A credit union may have an undivided profits account. The undivided profits account may be transferred to the regular reserve.
(c) The department may, by rule, revise the formula prescribed by
this section. A revised formula must be prudent and must reasonably
be expected to protect the credit unions.
(d) Financial statements of credit unions must provide for full and
fair disclosure of all assets, liabilities, and members' equity, including
such allowance for loan loss accounts necessary to present fairly the
financial position, and all income and expenses necessary to present
fairly the results of operation for the period concerned.
(e) The maintenance of an allowance for loan losses and investment
or other losses does not exempt a credit union from the requirement set
forth in subsection (a) or regulation CU-2. The totals of the regular
reserve, the allowance for loan losses account, and the allowance for
investment losses shall be combined for determining the percentage of
gross income to be transferred to the regular reserve.
(f) Loan losses of a credit union must be charged against the
allowance for loan loss. Adjustments to the allowance for loan losses
shall be made before the distribution of any dividend so that the
allowance for loan loss represents the value of loans and anticipated
losses resulting from:
(1) uncollectible loans, notes, and contracts receivable, including
any uncollectible accrued interest receivable thereon;
(2) assets acquired in liquidation of loans; and
(3) loans purchased from other credit unions.
(g) Adjustments to the allowance for loan losses must be recorded
in the expense account "provision for loan losses".
(h) If the balance of the allowance for loan losses is considered to
be in excess of the amount needed to meet the full and fair disclosure
requirements, the excess amount must be transferred to the regular
reserve account or deducted from the provision for loan loss expense
account.
(1) has only share accounts that are insured by an agency of the federal government, the state, or an insuring entity that is approved by the department to insure credit union shares;
(2) has assets of five hundred thousand dollars ($500,000) or more; and
(3) has been in operation for more than four (4) years;
may maintain reserves in accordance with this section.
(b) For purposes of this section, "risk assets" means all assets
except the following:
(1) Cash on hand.
(2) Deposits or shares in federally or state insured banks,
savings and loan associations, and credit unions.
(3) Investments that are direct or indirect obligations of the
United States government or its agencies.
(4) Loans to other credit unions.
(5) Student loans insured under the Higher Education Act (20
U.S.C. 1071 et seq.) or similar state insurance programs.
(6) Loans insured under the National Housing Act (12 U.S.C.
1703) by the Federal Housing Authority.
(7) Credit union mutual funds authorized by the Indiana
Credit Union Act under IC 28-7-1-9(3)(I).
(8) Prepaid expenses.
(9) Accrued interest on nonrisk investments.
(10) Furniture and equipment.
(11) Land and buildings.
(12) Loans fully secured by a pledge of shares in the lending
credit union, equal to and maintained to at least the amount
of loan outstanding.
(13) Loans that are purchased from liquidating credit unions
and guaranteed by an insuring agency of the federal
government, the state, or an agency approved by the
department to insure credit union share accounts.
(c) At the end of each accounting period, the gross income shall
be determined. Based on the amount of gross income, ten percent
(10%) of the gross income shall be set aside, as a regular reserve,
until the reserve shall equal four percent (4%) of total risk assets,
and then five percent (5%) of the gross income shall be set aside,
until the reserve equals six percent (6%) of total risk assets.
(d) Except for the method of calculating the regular reserve
formula, all other provisions of section 24 of this chapter
pertaining to entrance fees and charges, requirements of a special
reserve for delinquent loans, and waiver of such special reserve,
apply to credit unions that have reserves that are calculated under
this section.
(1) Causes a loss to the credit union.
(2) Commits fraud or another misdeed against the credit union or against a person on the premises of the credit union.
(b) Pending action by the credit union board at the credit union board's next regularly scheduled meeting, a credit union may immediately suspend any credit union services to a member who does any of the following:
(1) Causes a loss to the credit union.
(2) Commits fraud or another misdeed against:
(A) the credit union; or
(B) a person on the premises of the credit union.
(c) A member may withdraw from a credit union at any time. However, the credit union may require a notice of withdrawal from the withdrawing member as a condition of withdrawal.
(d) Unless the withdrawal of a member occurs on a maturity date or not later than seven (7) days after a maturity date, a credit union may require that a withdrawing member give sixty (60) days written notice of the member's intention to withdraw shares. A credit union may waive an applicable notice period for a specific member or account in writing.
(e) After a termination or withdrawal under this section, the former member has no rights in the credit union. However, the termination or withdrawal does not release the former member from any remaining liability to the credit union.
(1) is uncertain under the agreement governing the account of who is entitled to receive the payment; or
(2) has actual knowledge of a dispute between any account owners, beneficiaries with present vested rights in the account, or other persons concerning ownership of the money in the account, the proposed withdrawal, or any previous withdrawals from the account.
(b) If a credit union refuses to make a payment under subsection (a), the credit union:
(1) shall notify, in writing, the account owners, beneficiaries with present vested rights in the account, and other persons claiming an interest in the account of the basis for the credit union's refusal; and
(2) may refuse to make the payment until all interested parties
consent in writing to the requested payment or a court with
jurisdiction orders the credit union to make the payment.
(c) The credit union is not liable in damages as a result of an
action taken under this section.
(1) in the form of a blanket fidelity bond issued by a corporate surety authorized to transact business in Indiana; or
(2) through the establishment of a separate reserve fund within the credit union for that purpose.
(b) An official of a credit union shall discharge the duties of the official's position in good faith and with the degree of diligence, care, and skill that an ordinarily prudent person would exercise under similar circumstances in a like position. In discharging the official's duties, an official may rely upon:
(1) the opinion of legal counsel for the credit union;
(2) the report of an independent appraiser selected with reasonable care by:
(A) the board; or
(B) an officer of the credit union; or
(3) financial statements of the credit union:
(A) represented to the official to be correct by the:
(i) chief executive officer; or
(ii) officer of the credit union having charge of the credit union's records; or
(B) stated in a written report by an independent public or certified public accountant or firm of accountants fairly to reflect the financial condition of the credit union.
(c) As used in this section, "credit union" includes all other credit unions that become related to a credit union by a consolidation or merger and the resulting or continuing credit union.
(d) A credit union may indemnify a director, a committee
member, an officer, an employee, or an agent to the extent and in
the same manner that a corporation may indemnify a director,
committee member, officer, employee, or agent under
IC 28-13-13-2 through IC 28-13-13-13.
(b) The board of directors of each credit union participating in the merger must by majority vote approve a joint agreement of merger.
(c) After the resolutions approving a joint agreement of merger have been adopted by the board of directors of each credit union, the credit unions shall submit the resolutions and joint agreement to the department for approval. The department may, in the department's discretion, approve or disapprove the resolution and joint agreement. In deciding whether to approve or disapprove the resolution and joint agreement under this section, the department shall consider the following factors:
(1) Whether the credit unions subject to the proposed transaction are operated in a safe, sound, and prudent manner. (2) Whether the financial condition of any credit union subject to the proposed transaction will jeopardize the financial stability of any other credit unions subject to the proposed transaction. (3) Whether the proposed transaction will result in a credit union that has inadequate capital, unsatisfactory management, or poor earnings prospects.
(4) Whether the proposed transaction, in the department's judgment and considering the available information under the prevailing circumstances, will result in an institution that is more favorable to the stakeholders than if the entities were to remain separate. (5) Whether the management or other principals of the credit union that will result from the proposed transaction are qualified by character and financial responsibility to control and operate in a legal and proper manner the resulting credit union. (6) Whether the credit unions subject to the proposed transaction furnish all the information the department requires in reaching the department's decision.
(d) If the joint agreement is approved by the department, any credit
union whose existence will terminate as a result of the merger shall
submit the joint agreement to a vote of its shareholders at the meeting
directed by the resolution of the board of directors. A majority of the
shareholders present at the meeting may approve the joint agreement.
However, the department may permit the merger to become effective
without the affirmative vote of the membership of a credit union if that
credit union is in danger of insolvency or if the qualified group or
groups associated with the credit union either have ceased or will soon
cease to exist.
(e) After approval of the joint agreement by the shareholders of the
merging credit unions, each credit union shall execute in triplicate
articles of merger, on forms furnished by the department, which shall
set forth the following:
(1) The time and place of the meeting of the board of directors at
which the plan was approved.
(2) The vote by which the plan was approved by the board.
(3) A copy of the resolution or other action by which the plan was
agreed upon.
(4) The time and place of the meeting of the members at which
the plan was approved.
(5) The vote by which the plan was approved by the members.
(f) The articles, joint agreement, and resolutions shall be delivered
to the department for certification, which shall be evidenced in the
manner prescribed in IC 28-12-5, and shall be presented to the
secretary of state for recording. The secretary of state shall file one (1)
copy of the articles of merger and shall issue a certificate of merger and
two (2) copies of the articles of merger to the surviving credit union.
The date on which the secretary of state issues the certificate of merger
is the effective date of the merger.
(g) The articles of merger shall be filed with the county recorder of
the county in which the principal office of the surviving credit union is
located.
under this subsection, the applicant shall indicate for each location at
which another business will be conducted:
(1) the nature of the other business;
(2) the name under which the other business operates;
(3) the address of the principal office of the other business;
(4) the name and address of the business's resident agent in
Indiana; and
(5) any other information the director may require.
(b) An application submitted under this section must indicate
whether any individual described in section 8(a)(2) or 8(a)(3) of this
chapter at the time of the application:
(1) is under indictment for a felony involving fraud, deceit, or
misrepresentation under the laws of Indiana or any other
jurisdiction; or
(2) has been convicted of or pleaded guilty or nolo contendere to
a felony involving fraud, deceit, or misrepresentation under the
laws of Indiana or any other jurisdiction.
(c) The director may request that the applicant provide evidence of
compliance with this section at:
(1) the time of application;
(2) the time of renewal of a license; or
(3) any other time considered necessary by the director.
(d) For purposes of subsection (c), evidence of compliance with this
section may include:
(1) criminal background checks, including a national criminal
history background check (as defined in IC 10-13-3-12) by the
Federal Bureau of Investigation for any individual described in
subsection (b);
(2) credit histories; and
(3) other background checks considered necessary by the director.
If the director requests a national criminal history background check
under subdivision (1) for an individual described in that subdivision,
the director shall require the individual to submit fingerprints to the
department or to the state police department, as appropriate, at the time
evidence of compliance is requested under subsection (c). The
individual to whom the request is made shall pay any fees or costs
associated with the fingerprints and the national criminal history
background check. The national criminal history background check
may be used by the director to determine the individual's compliance
with this section. The director or the department may not release the
results of the national criminal history background check to any private
entity.
(1) the applicant and any significant affiliate of the applicant;
(2) each
(3) if known, each person directly or indirectly owning of record or owning beneficially at least ten percent (10%) of the outstanding shares of any class of equity security of the applicant;
are such that the business will be operated honestly, fairly, and efficiently and that the convenience and needs of the public exist for the operation of the business in the community wherein the applicant proposes to operate, it shall issue and deliver a license to the applicant, which license shall authorize the applicant to engage in the business of pawnbroking.
(b) The director is entitled to request evidence of compliance with the requirements of this section by the licensee, including any affiliate or person described in subsection (a), at:
(1) the time of issuance of the license;
(2) the time of renewal of the license; or
(3) any other time considered necessary by the director.
A license shall remain in effect until it is surrendered, revoked, or suspended. If the department denies the application, it shall notify the applicant of the denial.
(c) The department may deny an application under this section if the director determines that the application was submitted for the benefit of, or on behalf of, a person who does not qualify for a license.
(d) If a licensee replaces a manager, the licensee shall give the department written notice of the replacement not later than thirty (30) days after engaging another person to serve as manager.
(1) Notify the department of:
(A) the licensee's intention to cease engaging in business as a pawnbroker in Indiana; and
(B) the date on which the licensee's pawnbroking business will cease.
(2) Surrender the license to the department.
(3) Provide the following to all pledgers that have loans outstanding with the licensee:
(A) Notice of:
(i) the licensee's intention to cease engaging in business as a pawnbroker in Indiana; and
(ii) the date on which the licensee's pawnbroking business will cease.
(B) Instructions, approved by the director, on how pledged articles may be redeemed before the date identified under clause (A)(ii).
(b) If:
(1) a licensee ceases engaging in business as a pawnbroker in Indiana without complying with subsection (a); and
(2) the director determines that it is in the public interest that the department
the director may appoint a liquidating agent to conclude the affairs of the licensee's pawnbroker business in Indiana. The department may use the proceeds of the licensee's bond under section 5 of this chapter to pay the expenses of the liquidation.
(c) If:
(1) a license is revoked under section 13 of this chapter and the director determines that it is not in the best interests of the public for the licensee to liquidate the business; or
(2) the director otherwise determines that it is in the best interests of the public;
the director may appoint a liquidating agent to conclude the affairs of the licensee's pawnbroker business in Indiana. The department may use the proceeds of the licensee's bond under section 5 of this chapter to pay the expenses of liquidation.
misrepresentation under the laws of Indiana or any other
jurisdiction; or
(2) has been convicted of or pleaded guilty or nolo contendere to
a felony involving fraud, deceit, or misrepresentation under the
laws of Indiana or any other jurisdiction.
(b) If this section applies, the licensee shall provide to the
department the information required under section 4(b) of this chapter:
(1) not later than thirty (30) days after the licensee or any
individual described in section 8(a)(2) or 8(a)(3) of this chapter
(A) has been put on notice of the indictment; or
(B) has been convicted of or pleaded guilty or nolo contendere
to the felony;
whichever applies; or
(2) if the licensee's next license renewal fee under section 11 of
this chapter is due before the date described in subdivision (1),
along with the licensee's next license renewal fee under section 11
of this chapter.
chapter. Every licensee shall preserve such books, accounts, and
records, including cards used in the card system for at least two (2)
years after making the final entry on any loan recorded therein. The
books and records of the licensee shall be kept so that the pawnbroking
business transacted in Indiana may be readily separated and
distinguished from the business of the licensee transacted elsewhere
and from any other business in which the licensee may be engaged. To
determine whether the licensee is complying with this chapter and with
rules adopted by the department under this chapter, the department may
examine the books, accounts, and records required to be kept by the
licensee under this subsection. If the department examines the books,
accounts, and records of the licensee under this subsection, the licensee
shall pay all reasonably incurred costs of the examination in
accordance with the fee schedule adopted under IC 28-11-3-5.
(b) If a pawnbroker, in the conduct of the business, purchases an
article from a seller, the purchase shall be evidenced by a bill of sale
properly signed by the seller. All bills of sale must be in duplicate and
must recite the following separate items:
(1) Date of bill of sale.
(2) Amount of consideration.
(3) Name of pawnbroker.
(4) Description of each article sold. However, if multiple articles
of a similar nature that do not contain an identification or serial
number (such as precious metals, gemstones, musical recordings,
video recordings, books, or hand tools) are delivered together in
one (1) transaction, the description of the articles is adequate if
the description contains the quantity of the articles delivered and
a physical description of the type of articles delivered, including
any other unique identifying marks, numbers, names, letters, or
special features.
(5) Signature of seller.
(6) Address of seller.
(7) Date of birth of the seller.
(8) The type of government issued identification used to verify the
identity of the seller, together with the name of the governmental
agency that issued the identification, and the identification
number present on the government issued identification.
(c) If a pawnbroker, in the conduct of the business, purchases an
article from a seller on the condition of selling the property back at a
stipulated price, the transaction shall be evidenced by a bill of sale
properly signed by the seller. All such bills of sale must be in duplicate
and recite the information in subsection (b) and must also contain the
following information:
(1) Date of resale.
(2) Amount of resale.
(d) The original copy of the bill of sale shall be retained by the
pawnbroker. The second copy shall be delivered to the seller by the
pawnbroker at the time of sale. The heading on all bill of sale forms
must be in boldface type.
(e) Each licensee shall maintain a record of control indicating the
number of accounts and dollar value of all outstanding pawnbroking
receivables. Each licensee shall maintain a separate record of
transactions subject to subsection (c).
(f) If a licensee contracts with an outside vendor to provide a
service that would otherwise be undertaken internally by the
licensee and be subject to the department's routine examination
procedures, the person that provides the service to the licensee
shall, at the request of the director, submit to an examination by
the department. If the director determines that an examination
under this subsection is necessary or desirable, the examination
may be made at the expense of the person to be examined. If the
person to be examined under this subsection refuses to permit the
examination to be made, the director may order any licensee that
receives services from the person refusing the examination to:
(1) discontinue receiving one (1) or more services from the
person; or
(2) otherwise cease conducting business with the person.
(b) If a local ordinance or other law requires the retention of the pledge for a specific period of time, the pawnbroker shall comply with the local ordinance or other law if the retention period does not exceed ten (10) days.
pledge to the pledger in accordance with the remitter's instructions. If
the remittance is insufficient to cover the amount due, the pawnbroker
shall either notify the remitter of the amount of the deficiency or send
the pledge subject to the payment of shipping charges by the consignee.
The pawnbroker's liability for the pledge shall cease upon delivery of
the pledge to the carrier or his agent.
(b) If a local ordinance or other law requires the retention of the
pledge for a specific period, the pawnbroker shall comply with the
local ordinance or other law if the retention period does not exceed
ten (10) days.
(b) An application for a license must be submitted on a form prescribed by the department and must include the information required by the department.
(c) An application submitted under this section must indicate whether any individuals described in section 35(b)(2) or 35(b)(3) of this chapter:
(1) are, at the time of the application, under indictment for a felony
(2) have been convicted of or pleaded guilty or nolo contendere to a felony
(d) The director may request evidence of compliance with this section at:
(1) the time of application;
(2) the time of renewal of a license; or
(3) any other time considered necessary by the director.
(e) For purposes of subsection (d), evidence of compliance may include:
(1) criminal background checks, including a national criminal
history background check (as defined in IC 10-13-3-12) by the
Federal Bureau of Investigation for an individual described in
section 35(b)(2) or 35(b)(3) of this chapter;
(2) credit histories; and
(3) other background checks considered necessary by the director.
If the director requests a national criminal history background check
under subdivision (1) for an individual described in that subdivision,
the director shall require the individual to submit fingerprints to the
department or to the state police department, as appropriate, at the time
evidence of compliance is requested under subsection (d). The
individual to whom the request is made shall pay any fees or costs
associated with the fingerprints and the national criminal history
background check. The national criminal history background check
may be used by the director to determine the individual's compliance
with this section. The director or the department may not release the
results of the national criminal history background check to any private
entity.
(b) If a license is granted, the application fee constitutes the license fee for the applicant's activities through
(b) If this section applies, the licensee shall provide to the department the information required under section 24(5)(B) or 25(6)(B) of this chapter, whichever applies:
(1) not later than thirty (30) days after the licensee or individual described in section 35(b)(2) or 35(b)(3) of this chapter
(2) if the licensee's next license renewal fee under section 37 of this chapter is due before the date described in subdivision (1), along with the licensee's next license renewal fee under section 37 of this chapter.
(b) If the director determines that a reasonable belief exists that a person is operating without a valid license or in violation of this chapter, the director has the authority to investigate and examine the records of that person. The person examined must pay the reasonably incurred costs of the examination.
(c) Except as provided in section 42(a)(2) of this chapter, the director must give the licensee forty-five (45) days written notice before conducting an onsite examination.
(d) If the director determines, based on the licensee's financial statements and past history of operations in Indiana, that an onsite examination is unnecessary, the director may waive the onsite examination.
(e) If the director concludes that an onsite examination of a licensee is necessary, the licensee shall pay all reasonably incurred costs of such examination in accordance with the fee schedule adopted under IC 28-11-3-5.
(f) An onsite examination may be conducted in conjunction with examinations to be performed by representatives of agencies of another state or states. In lieu of an onsite examination, a director may accept the examination report of an agency of another state, or a report prepared by an independent accounting firm. A report accepted under this subsection shall be considered, for all purposes, to be an official report of the director.
(g) If a licensee contracts with an outside vendor to provide a service that would otherwise be undertaken internally by the licensee and be subject to the department's routine examination procedures, the person that provides the service to the licensee shall, at the request of the director, submit to an examination by
the department. If the director determines that an examination
under this subsection is necessary or desirable, the examination
may be made at the expense of the person to be examined. If the
person to be examined under this subsection refuses to permit the
examination to be made, the director may order any licensee that
receives services from the person refusing the examination to:
(1) discontinue receiving one (1) or more services from the
person; or
(2) otherwise cease conducting business with the person.
(b) Each application for a license shall be in writing in such form as the director may prescribe and shall include all of the following:
(1) The following information pertaining to the applicant:
(A) Name.
(B) Residence address.
(C) Business address.
(2) The following information pertaining to any individual described in section 12(b)(1) of this chapter:
(A) Name.
(B) Residence address.
(C) Business address.
(D) Whether the person:
(i) is, at the time of the application, under indictment for a felony
(ii) has been convicted of or pleaded guilty or nolo contendere to a felony
(3) The address where the applicant's office or offices will be located. If any business, other than the business of cashing checks under this chapter, will be conducted by the applicant or another
person at any of the locations identified under this subdivision,
the applicant shall indicate for each location at which another
business will be conducted:
(A) the nature of the other business;
(B) the name under which the other business operates;
(C) the address of the principal office of the other business;
(D) the name and address of the business's resident agent in
Indiana; and
(E) any other information that the director may require.
(4) Such other data, financial statements, and pertinent
information as the director may require.
(c) The application shall be filed with a nonrefundable fee fixed by
the department under IC 28-11-3-5.
(b) The department may refuse to issue a license for any of the following reasons:
(1) Any of the following has been convicted of a felony
(A) An executive officer, director, or manager of the applicant, or any other individual having a similar status or performing a similar function for the applicant.
(B) Any person directly or indirectly owning of record or owning beneficially at least ten percent (10%) of the outstanding shares of any class of equity security of the applicant.
(2) The application was submitted for the benefit of, or on behalf of, a person who does not qualify for a license.
(c) The director of the department may request evidence of compliance with this section by the licensee at:
(1) the time of application;
(2) the time of renewal of the licensee's license; or
(3) any other time considered necessary by the director.
(d) For purposes of subsection (c), evidence of compliance may include:
(1) criminal background checks, including a national criminal history background check (as defined in IC 10-13-3-12) by the Federal Bureau of Investigation for any individual described in
subsection (b)(1);
(2) credit histories; and
(3) other background checks considered necessary by the director.
If the director requests a national criminal history background check
under subdivision (1) for an individual described in that subdivision,
the director shall require the individual to submit fingerprints to the
department or to the state police department, as appropriate, at the time
evidence of compliance is requested under subsection (c). The
individual to whom the request is made shall pay any fees or costs
associated with the fingerprints and the national criminal history
background check. The national criminal history background check
may be used by the director to determine the individual's compliance
with this section. The director or the department may not release the
results of the national criminal history background check to any private
entity.
(b) If this section applies, the licensee shall provide to the
department the information required under section 11(b)(2)(D) of this
chapter:
(1) not later than thirty (30) days after the licensee or individual
described in section 11(b)(2) of this chapter
(A) has been put on notice of the indictment; or
(B) has been convicted of or pleaded guilty or nolo contendere
to the felony; or
whichever applies; or
(2) if the licensee's next license renewal fee under section 15 of
this chapter is due before the date described in subdivision (1),
along with the licensee's next license renewal fee under section 15
of this chapter.
(b) If the department examines the books, accounts, and records of a licensee, the licensee shall pay all reasonably incurred costs of the examination in accordance with the fee schedule adopted under IC 28-11-3-5.
(c) If a licensee contracts with an outside vendor to provide a service that would otherwise be undertaken internally by the licensee and be subject to the department's routine examination procedures, the person that provides the service to the licensee shall, at the request of the director, submit to an examination by the department. If the director determines that an examination under this subsection is necessary or desirable, the examination may be made at the expense of the person to be examined. If the person to be examined under this subsection refuses to permit the examination to be made, the director may order any licensee that receives services from the person refusing the examination to:
(1) discontinue receiving one (1) or more services from the person; or
(2) otherwise cease conducting business with the person.
(1) file any renewal
(2) pay any license renewal fee described under section 15 of this chapter;
(b) A person whose license is revoked under this section may:
(1) pay all delinquent fees and apply for a new license; or
(2) appeal the revocation to the department for an administrative review under IC 4-21.5-3. Pending the decision resulting from the hearing under IC 4-21.5-3 concerning the license revocation, the license remains in force.
(b) The governor may reappoint a member appointed under section 3(a)(2) of this chapter.
( c) Notwithstanding the expiration of a member's term, the member continues to serve until a successor is appointed and qualified.
(2) all members of the public physically present at the place where the meeting is conducted;
to simultaneously communicate with each other during the
meeting.
(c) A member who participates in a meeting under subsection
(b) is considered to be present at the meeting.
(d) A member who participates in a meeting under subsection
(b) may act as a voting member on official action only if that
official action is voted upon by at least four (4) members of the
board physically present at the place where the meeting is
conducted.
(e) The memoranda of the meeting prepared under
IC 5-14-1.5-4 must state the name of each member who:
(1) was physically present at the place where the meeting was
conducted;
(2) participated in the meeting by using a means of
communication described in subsection (b); and
(3) was absent.
(f) A member who participates in a meeting under subsection
(b) may not cast the deciding vote on any official action.
(1) declares, under IC 10-14-3-12, a state of emergency in all or part of Indiana; or
(2) in the absence of a declaration under subdivision (1), gives prior approval to the director;
the director is authorized to take necessary and appropriate action to establish or preserve safe and sound methods of banking and other action the director considers necessary under the circumstances to promote and safeguard the interests of depositors, debtors, consumers,
(b) In making an examination, the department may examine any of the officers or agents of the institution under oath.
(c) The department may require an independent audit by a certified public accountant, subject to the standards the department determines.
(d) The department, in the classification of assets, may disregard the amount of an asset in its analysis of capital adequacy of the financial institution until the amount of the asset is recovered.
(e) After the examiners complete the examination of a financial institution, the examiners:
(1) shall submit their written findings and recommendations to:
(A) the board of directors; and
(B) other parties authorized by the board of directors and approved by the director; and
(2) may confer with the parties listed in subdivision (1) on the findings and recommendations.
(f) Upon the conclusion of an examination, a full, true, and detailed report of the condition of the financial institution shall be made to the department by the examiners in the form prescribed by the department.
(g) A financial institution subject to examination by the department may not cause, by contract or otherwise, any data processing or other similar service to be performed, either on or off its premises, until written assurances are furnished to the department by the financial institution and the entity providing the service that the performance of the service will be subject to regulation and examination by the department to the same extent as if the service was being performed by the financial institution on its own premises. Entities that provide data processing or other similar services to more than one (1) financial institution need only file one (1) written assurance to cover all financial institutions to which the entity provides services.
(h) The report of an examination conducted under this section:
(1) is the exclusive property of the department; and
(2) except as provided in subsection (i), shall not be distributed, published, or duplicated without the prior authorization of the director.
(i) A financial institution that is or seeks to become a member of the Federal Home Loan Bank System may provide a copy of a report of an examination conducted by the department to the Federal Home Loan Bank for the confidential use of the Federal Home Loan Bank if the director and the Federal Home Loan Bank have entered into a written agreement that provides that the report of the examination:
(1) remains the property of the department; and
(2) is not:
(A) subject to inspection under IC 5-14-3;
(B) subject to subpoena;
(C) subject to discovery; or
(D) admissible in evidence in any civil action.
(j) Except as provided in subsection (i), a person who knowingly or intentionally possesses, distributes, publishes, or duplicates a report of an examination conducted under this section without the prior
authorization of the director commits a Class B misdemeanor.
(k) If a financial institution contracts with an outside vendor to
provide a service that would otherwise be undertaken internally by
the financial institution and be subject to the department's routine
examination procedures, the person that provides the service to the
financial institution shall, at the request of the director, submit to
an examination by the department. If the director determines that
an examination under this subsection is necessary or desirable, the
examination may be made at the expense of the person to be
examined. If the person to be examined under this subsection
refuses to permit the examination to be made, the director may
order any financial institution that receives services from the
person refusing the examination to:
(1) discontinue receiving one (1) or more services from the
person; or
(2) otherwise cease conducting business with the person.
(b) The department shall fix and collect, on an annual basis, a schedule of fees for the services rendered and the duties performed by the department in the administration of financial institutions.
(c) The fees may not exceed the comparative cost to the department in the administration of financial institutions. In determining the costs, the department may classify the assets of financial institutions and fix fees at different rates for the examination, supervision, regulation, and liquidation of the classes of assets, based on the proportionate cost and expense incurred by the department in making examinations and in the administration of financial institutions.
(d) The fees shall be charged and collected until changed or modified by the department. A change or modification of fees may not be adopted more often than one (1) time each state fiscal year. A modified schedule of fees is effective on the first day of the state fiscal year following the fiscal year in which the modification is adopted.
(e) Administrative charges included in the fee are in addition to charges collected under other statutes.
(f) If the reasonable costs of performing an examination of a financial institution exceed the fees established under this section, the financial institution shall pay the excess costs not later than
thirty (30) days after receipt of an invoice from the department.
The department may impose a fee, in an amount fixed by the
department under this section, for each day that the excess costs
are not paid, beginning on the first day after the thirty (30) day
period described in this subsection.
(1) committed a violation of a statute, a rule, a final cease and desist order, any condition imposed in writing by the director in connection with the grant of any application or other request by the financial institution, or any written agreement between the financial institution and the director or the department;
(2) engaged or participated in an unsafe or unsound practice in connection with the financial institution;
(3) committed or engaged in an act, an omission, or a practice that constitutes a breach of fiduciary duty as director, officer, or employee; or
(4) been convicted of, has pleaded guilty or nolo contendere to, or is under indictment for, a felony involving fraud, deceit, or misrepresentation under the laws of Indiana or any other jurisdiction;
the director, subject to subsection (b), may issue and serve upon the officer, director, or employee a notice of the director's intent to issue an order removing the person from the person's office or employment, an order prohibiting any participation by the person in the conduct of the affairs of any financial institution, or an order both removing the person and prohibiting the person's participation.
(b) A violation, practice, or breach specified in subdivision (a) is subject to the authority of the director under subsection (a) if the director finds any of the following:
(1) By reason of the violation, practice, or breach, the financial institution has suffered or will probably suffer substantial financial loss or other damage.
(2) The interests of the financial institution's depositors could be seriously prejudiced by reason of the violation, practice, or breach of fiduciary duty.
(3) The violation, practice, or breach involves personal dishonesty on the part of the officer, director, or employee involved.
(4) The violation, practice, or breach demonstrates a willful or
continuing disregard by the officer, director, or employee for the
safety and soundness of the financial institution.
(c) A person who:
(1) is under indictment for;
(2) has been convicted of; or
(3) has pleaded guilty or nolo contendere to;
a felony involving fraud, deceit, or misrepresentation under the laws of
Indiana or any other jurisdiction may not serve as a director, an officer,
or an employee of a financial institution, or serve in any similar
capacity, unless the person obtains the written consent of the
department. director.
(d) A financial institution that willfully permits a person to serve the
financial institution in violation of subsection (b) or (c) is subject to a
civil penalty of five hundred dollars ($500) for each day the violation
continues. A civil penalty paid under this subsection must be deposited
into the financial institutions fund established by IC 28-11-2-9.
(1) contain a statement of the facts constituting the alleged practice, violation, or breach;
(2) state the facts alleged in support of the violation, practice, or breach;
(3) state the director's intention to enter an order under section 3(a) of this chapter;
(4) be delivered to the board of directors of the financial institution;
(5) be delivered to the officer, director, or employee concerned; and
(6) specify the procedures that must be followed to initiate a hearing to contest the facts alleged.
(b) If a hearing is requested within ten (10) days after service of the written notice, the
(1) a final order under section 7 of this chapter for the immediate removal of the officer, director, or employee affected;
(2) a final order under section 7 of this chapter prohibiting further participation by the officer, director, or employee, in any manner,
in the conduct of affairs of any financial institution;
(3) a final order under section 7 of this chapter requiring the
financial institution and its directors, officers, employees, and
agents to:
(A) cease and desist from the practice or violation; or
(B) take affirmative action to correct the conditions resulting
from the practice or violation;
(4) a final order consisting of any combination of orders described
in subdivisions (1) through (3);
(5) a reprimand of the individuals, entities, or other persons
concerned; or
(6) a dismissal of the entire matter.
(c) If no hearing is requested within the time specified in subsection
(b), the director may proceed to issue a final order described in
subsection (b)(1), (b)(2), (b)(3), or (b)(4) on the basis of the facts set
forth in the written notice.
(d) An officer, director, or employee who is removed from a
position under a removal order that has become final may not
participate in the conduct of the affairs of any financial institution
without the approval of the director.
(e) The director may, for the protection of the financial institution
or the interests of its depositors, suspend from office or prohibit from
participation in the affairs of the financial institution an officer, a
director, or an employee of a financial institution who is the subject of
a written notice served by the director under subsection (a). section
3(a) of this chapter. A suspension or prohibition under this subsection
becomes effective upon service of the notice. Unless stayed by a court
in a proceeding authorized by subsection (f), the notice suspension or
prohibition shall remain in effect pending completion of the
proceeding under proceedings related to the written notice served
under subsection (a) section 3(a) of this chapter and until the effective
date of an order entered by the director department under subsection
(b) or the director under subsection (c). Copies of the notice shall
also be served upon the financial institution or subsidiary of which the
person is an officer, a director, or an employee.
(f) Not more than ten (10) days after an officer, a director, or an
employee has been suspended from office or prohibited from
participation in the conduct of the affairs of the financial institution or
subsidiary under subsection (e), the officer, director, or employee may
apply to a court having jurisdiction for a stay of the suspension or
prohibition pending completion of the proceedings under subsection
(b), related to the notice served under section 3(a) of this chapter,
and the court may stay the suspension of prohibition.
(g) The department shall maintain an official record of a proceeding
under this chapter.
(1) cause insolvency of the financial institution;
(2) cause substantial dissipation of assets or earnings of the financial institution; or
(3) otherwise seriously prejudice the interests of the depositors of the financial institution;
the
(b) A temporary order may:
(1) require the financial institution to cease and desist from the practice or violation;
(2) require the financial institution to take affirmative action to correct the conditions resulting from the practice or violation; or
(3) suspend or prohibit a director, an officer, or an employee from participating in the conduct of the affairs of the financial institution.
(c) A temporary order is effective upon service and remains effective and enforceable until the earliest of the following:
(1) The issuance of an injunction by a court under subsection (d).
(2) The dismissal of the charges by the department.
(3) The effective date of a final order under section 7 of this chapter.
(d) A financial institution served with a temporary order under this section may apply to a court having jurisdiction for an injunction to stay, modify, or vacate the order.
(b) Unless the director has entered into a consent agreement
described in section 5 of this chapter, a final order must include
separately stated findings of fact and conclusions of law for all aspects
of the order.
(c) A final order may do any of the following:
(1) Require the financial institution and its directors, officers,
employees, and agents to do any of the following:
(A) Cease and desist from the practice or violation.
(B) Take affirmative action to correct the conditions resulting
from the practice or violation.
(2) Suspend or prohibit a director, an officer, or an employee from
participating in the affairs of a financial institution or subsidiary.
(3) Impose a civil penalty not to exceed the amount specified in
section 9 of this chapter.
(d) A final order shall be issued in writing within ninety (90) days
after conclusion of the a hearing held under section 4(b) of this
chapter, unless this period is waived or extended with the written
consent of all parties or for good cause shown.
(e) If the financial institution, director, or officer does not appear
individually or by a duly authorized representative at the a hearing held
under section 4(b) of this chapter, the financial institution, director,
or officer is considered to have consented to the issuance of a final
order.
(f) The director may keep a final order confidential if the director
determines that the immediate release of the order would endanger:
(1) the stability of the financial institution; or
(2) the security of depositors' funds.
However, after two (2) years after the date of its issuance, a final order
is no longer confidential under IC 28-1-2-30.
(1) An order issued under this chapter.
(2) A written agreement entered into by the department or the director and:
(A) a financial institution; or
(B) any director, officer, employee, or agent of the financial institution.
(3) Any condition imposed in writing by the department or the director on:
(A) a financial institution; or
(B) any director, officer, employee, or agent of the financial institution;
in connection with any application, notice, or request concerning the financial institution.
(1)
(2) after
commits a Class D felony.
(1) to the board of directors, its chairman, or the secretary of the corporation; or
(2) if the articles of incorporation or bylaws so provide, to another designated officer.
(b) A resignation is effective when the notice is delivered unless the notice specifies a later effective date. If a resignation is made effective at a later date and the corporation accepts the future effective date, the corporation's board of directors may fill the pending vacancy before the effective date if the board of directors provides that the successor does not take office until the effective date.
(c) A board of directors may remove any officer at any time with or without cause.
(d) An officer who appoints another officer or assistant officer may remove the appointed officer or assistant officer at any time with or without cause.
(e) If a corporation replaces the chief executive officer of the corporation, the corporation shall give the department written notice of the replacement not later than thirty (30) days after the chief executive officer is replaced.
(1) to:
(A) create;
(B) deliver;
(C) acquire; or
(D) sell;
a product, a service, or an investment that is available to or offered by; or
(2) to engage in mergers, consolidations, reorganizations, or other activities or to exercise other powers authorized for;
federal savings associations domiciled in Indiana.
(b) Subject to this section, savings associations may exercise the rights and privileges that are granted to federal savings associations.
(c) A savings association that intends to exercise any rights and privileges that are:
(1) granted to federal savings associations; but
(2) not authorized for savings associations under:
(A) the Indiana Code (except for this section); or
(B) a rule adopted under IC 4-22-2;
shall submit a letter to the department, describing in detail the requested rights and privileges granted to federal savings associations that the savings association intends to exercise. If available, copies of relevant federal law, regulations, and interpretive letters must be attached to the letter.
(d) The department shall promptly notify the requesting savings association of its receipt of the letter submitted under subsection (c). Except as provided in subsection (f), the savings association may exercise the requested rights and privileges sixty (60) days after the date on which the department receives the letter unless otherwise notified by the department.
(e) The department may deny the requested rights and privileges if the department finds that:
(1) federal savings associations in Indiana do not possess the requested rights and privileges;
(2) the exercise of the requested rights and privileges by the savings association would adversely affect the safety and soundness of the savings association;
(3) the exercise of the requested rights and privileges by the savings association would result in an unacceptable curtailment
of consumer protection; or
(4) the failure of the department to approve the requested rights
and privileges will not result in a competitive disadvantage to the
savings association.
(f) The sixty (60) day period referred to in subsection (d) may be
extended by the department based on a determination that the savings
association letter raises issues requiring additional information or
additional time for analysis. If the sixty (60) day period is extended
under this subsection, the savings association may exercise the
requested rights and privileges only if the savings association receives
prior written approval from the department. However:
(1) the department must:
(A) approve or deny the requested rights and privileges; or
(B) convene a hearing;
not later than sixty (60) days after the department receives the
savings association's letter; and
(2) if a hearing is convened, the department must approve or deny
the requested rights and privileges not later than sixty (60) days
after the hearing is concluded.
(g) The exercise of rights and privileges by a savings association in
compliance with and in the manner authorized by this section does not
constitute a violation of any provision of the Indiana Code or rules
adopted under IC 4-22-2.
(h) If a savings association receives approval to exercise the
requested rights and privileges granted to national savings associations
domiciled in Indiana, the department shall determine by order whether
all savings associations may exercise the same rights and privileges. In
making the determination required by this subsection, the department
must ensure that the exercise of the rights and privileges by all savings
associations will not:
(1) adversely affect their safety and soundness; or
(2) unduly constrain Indiana consumer protection provisions.
(i) If the department denies the request of a savings association
under this section to exercise any rights and privileges that are granted
to national savings associations, the company may appeal the decision
of the department to the circuit court with jurisdiction in the county in
which the principal office of the savings association is located.
(1) an individual;
(2) a supervised financial organization (as defined in
IC 24-4.5-1-301); IC 26-1-4-102.5);
(3) an insurance company or a pension fund; or
(4) any other entity that has the authority to make loans.
(b) The recorder shall record the statement and notice of intention
to hold a lien when presented under section 3 of this chapter in the
miscellaneous record book. The recorder shall charge a fee for
recording the statement and notice in accordance with IC 36-2-7-10.
When the statement and notice of intention to hold a lien is recorded,
the lien is created. The recorded lien relates back to the date the
mechanic or other person began to perform the labor or furnish the
materials or machinery. Except as provided in subsections (c) and (d),
a lien created under this chapter has priority over a lien created after it.
(c) The lien of a mechanic or materialman does not have priority
over the lien of another mechanic or materialman.
(d) The mortgage of a lender has priority over all liens created under
this chapter that are recorded after the date the mortgage was recorded,
to the extent of the funds actually owed to the lender for the specific
project to which the lien rights relate. This subsection does not apply
to a lien that relates to a construction contract for the development,
construction, alteration, or repair of the following:
(1) A Class 2 structure (as defined in IC 22-12-1-5).
(2) An improvement on the same real estate auxiliary to a Class
2 structure (as defined in IC 22-12-1-5).
(3) Property that is:
(A) owned, operated, managed, or controlled by:
(i) a public utility (as defined in IC 8-1-2-1);
(ii) a municipally owned utility (as defined in IC 8-1-2-1);
(iii) a joint agency (as defined in IC 8-1-2.2-2);
(iv) a rural electric membership corporation formed under
IC 8-1-13-4;
(v) a rural telephone cooperative corporation formed under
IC 8-1-17; or
(vi) a not-for-profit utility (as defined in IC 8-1-2-125);
regulated under IC 8; and
(B) intended to be used and useful for the production,
transmission, delivery, or furnishing of heat, light, water,
telecommunications services, or power to the public.
(1) to consumer loans, consumer related loans, consumer credit sales, consumer related sales, and consumer leases, as those terms
are defined in IC 24-4.5, subject to adjustment, where applicable,
of the dollar amounts set forth in those definitions under
IC 24-4.5-1-106;
(2) to any loan primarily secured by an interest in land or sale of
an interest in land that is a mortgage transaction (as defined in
IC 24-4.5-1-301) IC 24-4.5-1-301.5) if the transaction is
otherwise a consumer loan or consumer credit sale; and
(3) to any other loan transaction or extension of credit, regardless
of the amount of the principal of the loan or extension of credit,
if unlawful force or the threat of force is used to collect or to
attempt to collect any of the property loaned or any of the
consideration for the loan or extension of credit in question.
(b) This chapter applies regardless of whether the contract is made
directly or indirectly, and whether the receipt of the consideration is
received or is due to be received before or after the maturity date of the
loan.
; (10)SE0328.1.209. --> SECTION 209. THE FOLLOWING ARE REPEALED [EFFECTIVE JULY 1, 2010]: IC 24-4.4-1-203; IC 24-4.4-3-112; IC 24-4.5-1-203; IC 24-4.5-1-301; IC 24-4.5-1-303; IC 24-4.5-2-104; IC 24-4.5-3-103; IC 24-4.5-3-104; IC 24-4.5-3-503.5; IC 24-4.5-3-506; IC 24-4.5-3-507; IC 24-4.5-6-103.5; IC 24-4.5-6-114; IC 28-1-29-7; IC 28-1-29-10; IC 28-1-29-12; IC 28-7-1-26; IC 28-15-11-13.
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