Bill Text: IN HB1239 | 2012 | Regular Session | Enrolled
Bill Title: Financial institutions and consumer credit.
Spectrum: Bipartisan Bill
Status: (Enrolled - Dead) 2012-03-06 - Signed by the Governor [HB1239 Detail]
Download: Indiana-2012-HB1239-Enrolled.html
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AN ACT to amend the Indiana Code concerning financial institutions.
available when required for the purposes intended, provided that, prior
written approval of the Director of the Department of Financial
Institutions shall be if required whenever by the governing body, such
time certificates of deposits or other similar arrangements shall be
secured to the full amount thereof by direct obligations of, or
obligations the principal of and the interest on which are
unconditionally guaranteed by, the United States of America of the type
permitted for direct investment of the escrow fund. All interest or other
income earned on such investments shall first be used to pay the
interest on the refunding bonds as it becomes due. Any excess shall
become a part of and held in the escrow fund. Any balance remaining
in the escrow fund after redemption of all the bonds being refunded
shall be deposited in the sinking fund after redemption of all the bonds
being refunded shall be deposited in the sinking fund established for
the payment of the principal and interest on the refunding bonds.
(b) Notwithstanding any other provision of this article or IC 24-4.5, the department may adopt emergency rules under IC 4-22-2-37.1, to remain effective until codified in the Indiana Code, in order to provide for a system of licensing creditors and mortgage loan originators that meets the requirements of the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (H.R. 3221 Title V) and the interpretations of that Act issued by the Secretary of Housing and Urban Development and the Consumer Financial Protection Bureau.
(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,
(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 as in effect December 31,
(1) the creditor requires the debtor to make at any time during the term of the mortgage;
(2) represents the entire amount of the outstanding balance with respect to the mortgage; and
(3) the entire amount of which is due as of a specified date or at the end of a specified period;
if the aggregate amount of the minimum periodic payments required under the mortgage would not fully amortize the outstanding balance by the specified date or at the end of the specified period. The term does not include a payment required by a creditor under a due-on-sale clause (as defined in 12 U.S.C. 1701j-3(a)) or a payment required by a creditor under a provision in the mortgage that permits the creditor to accelerate the debt upon the debtor's default or failure to abide by the material terms of the mortgage.
(b) This article does not apply to the following:
(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.
(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) a registered
mortgage loan originator, when acting for an entity described in
subsection (6). or (7); or (b) an individual who:(i) performs the
duties of a mortgage loan originator for an entity described in
subsection (6) or (7); and (ii) is required to be registered with the
NMLSR not later than July 29, 2011. A privately insured state
chartered credit union shall also comply with the system of
mortgage loan originator registration developed by the Federal
Financial Institutions Examinations Council under Section 1507
of the federal Secure 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.
(12) Agencies, instrumentalities, and government owned
corporations of The United States, any state or local government,
or any agency or instrumentality of any governmental entity,
including United States government sponsored enterprises.
(13) A person in whose name a tablefunded transaction is closed,
as described in section 301(34)(a) of this chapter. However, the
exemption provided by this subsection does not apply if:
(a) the transaction:
(i) is secured by a dwelling that is a mobile home, a
manufactured home, or a trailer; and
(ii) is not also secured by an interest in land; and
(b) the person in whose name the transaction is closed, as
described in section 301(34)(a) of this chapter, sells the
dwelling to the debtor through a retail installment contract or
other similar transaction.
(13) (14) A bona fide nonprofit entity organization not operating
in a commercial context, as determined by the director, if the
following criteria are satisfied:
(A) (a) Subject to clause (B), (b), the entity organization
originates only one (1) or both of the following types of
mortgage transactions:
(i) Zero (0) interest first lien mortgage transactions.
(ii) Zero (0) interest subordinate lien mortgage transactions.
(B) (b) The entity organization does not require, under the
terms of the mortgage or otherwise, balloon payments with
respect to the mortgage transactions described in clause (A).
(a).
(C) (c) The entity organization is exempt from federal income
taxation under Section 501(c)(3) of the Internal Revenue
Code.
(D) (d) The entity's organization's primary purpose is to
serve the public by helping low income individuals and
families build, repair, and purchase housing.
(E) (e) The entity organization uses only:
(i) unpaid volunteers; or
(ii) employees whose compensation is not based on the
number or size of any mortgage transactions that the
employees originate;
to originate the mortgage transactions described in clause
(A). (a).
(F) (f) The entity organization does not charge loan
origination fees in connection with the mortgage transactions
described in clause (A). (a).
(15) A bona fide nonprofit organization (as defined in section
301(37) of this chapter) if the following criteria are satisfied:
(a) For each calendar year that the organization seeks the
exemption provided by this subdivision, the organization
certifies, not later than December 31 of the preceding
calendar year and on a form prescribed by the director
and accompanied by such documentation as required by
the director, that the organization is a bona fide nonprofit
organization (as defined in section 301(37) of this chapter).
(b) The director determines that the organization
originates only mortgage transactions that are favorable to
the debtor. For purposes of this clause, a mortgage
transaction is favorable to the debtor if the director
determines that the terms of the mortgage transaction are
consistent with terms of mortgage transactions made in a
public or charitable context, rather than in a commercial
context.
(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 products, horticultural products, viticultural products, 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 credit service 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.
(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.
(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 (34)(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.
(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.
(10) "Director" refers to the director of the department of financial institutions or the director's designee.
(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 Office of the Comptroller of the Currency, the Office of Thrift Supervision, the National Credit Union Administration, and the Federal Deposit Insurance Corporation.
(14) "First lien mortgage transaction" means:
(a) a consumer 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 or a land contract (or another
(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.
(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 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.
(21) "Mortgage loan originator" means an individual who, for
compensation or gain, or in the expectation of compensation or
gain, regularly 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 consumer 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 or a
land contract (or another equivalent consensual security interest
equivalent to a mortgage or a land contract) on a dwelling or
on residential real estate upon which a dwelling is constructed or
intended to be constructed. The term does not include a land
contract.
(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.
(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.
(28) "Person" includes an individual or an organization.
(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.
(33) "Revolving first lien mortgage transaction" means 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, finance charges, and other appropriate charges are debited to an account; and
(c) the debtor has the privilege of paying the balances in installments.
(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, not later than one (1) business day after the funding of the transaction, to the mortgage creditor providing the funding.
(35) "Unique identifier" means a number or other identifier
assigned by protocols established by the NMLSR.
(36) "Land contract" means a contract for the sale of real estate in
which the seller of the real estate retains legal title to the real
estate until the total contract price is paid by the buyer.
(37) "Bona fide nonprofit organization" means an
organization that the does the following, as determined by the
director, under criteria established by the director:
(a) Maintains tax exempt status under Section 501(c)(3) of
the Internal Revenue Code.
(b) Promotes affordable housing or provides home
ownership education or similar services.
(c) Conducts the organization's activities in a manner that
serves public or charitable purposes.
(d) Receives funding and revenue and charges fees in a
manner that does not encourage the organization or the
organization's employees to act other than in the best
interests of the organization's clients.
(e) Compensates the organization's employees in a manner
that does not encourage employees to act other than in the
best interests of the organization's clients.
(f) Provides to, or identifies for, debtors mortgage
transactions with terms that are favorable to the debtor (as
described in section 202(b)(15) of this chapter) and
comparable to mortgage transactions and housing
assistance provided under government housing assistance
programs.
(g) Maintains certification by the United States
Department of Housing and Urban Development or
employs counselors who are certified by the Indiana
housing and community development authority.
(38) "Regularly engaged", with respect to a person who
extends or originates first lien mortgage transactions, refers
to a person who:
(a) extended or originated more than five (5) first lien
mortgage transactions in the preceding calendar year; or
(b) extends or originates, or will extend or originate, more
than five (5) first lien mortgage transactions in the current
calendar year if the person did not extend or originate
more than five (5) first lien mortgage transactions in the
preceding calendar year.
JULY 1, 2012]: Sec. 201. (1) A creditor or mortgage servicer shall
provide, in writing, an accurate payoff amount for a first lien mortgage
transaction to the debtor not later than seven (7) business days
(excluding legal public holidays, Saturdays, and Sundays) after the
creditor or mortgage servicer receives the debtor's written request for
the accurate payoff amount. A payoff statement provided by a creditor
or mortgage servicer under this subsection must include show the date
the statement was prepared and the payoff amount as of that date,
including an itemization of itemize the unpaid principal balance and
each fee, charge, or other sum included within the payoff amount. A
creditor or mortgage servicer who fails to provide an accurate payoff
amount is liable for:
(a) one hundred dollars ($100) if an accurate payoff amount is not
provided by the creditor or mortgage servicer not later than seven
(7) business days (excluding legal public holidays, Saturdays, and
Sundays) 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 seven (7) business days
(excluding legal public holidays, Saturdays, and Sundays) 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 five (5) business days
(excluding legal public holidays, Saturdays, and Sundays) 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 (excluding legal public holidays,
Saturdays, and Sundays) 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. The thirty (30) day period
described in this subsection may be extended for not more than fifteen
(15) business days (excluding legal public holidays, Saturdays, and
Sundays) if, before the end of the thirty (30) day period, the creditor,
the servicer, or the creditor's agent notifies the debtor of the extension
and the reason the extension is needed. 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.
(a) an application filed under this section; or
(b) a renewal application filed under section 403 of this chapter;
is or becomes inaccurate or incomplete in a material respect, the
applicant shall promptly file a correcting amendment with the
department.
(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 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;
(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
(e) other background checks considered necessary by the director.
(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.
(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.
(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.
(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.
(9) A fee as established by the department under IC 28-11-3-5 may be charged for each day a fee under subsection 8(b) or 8(c) is delinquent.
(10) Except in a transaction approved under section 406 of this chapter, a license issued under this section is not assignable or transferable.
(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 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 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.
(7) Notwithstanding any other provision of law, any:
(a) application, renewal, or other form or document that:
(i) relates to licenses issued under this article; and
(ii) is made or produced in an electronic format;
(b) document filed as an electronic record in a multistate
automated repository established and operated for the
licensing or registration of mortgage lenders, brokers, or loan
originators; or
(c) electronic record filed through the NMLSR;
is considered a valid original document when reproduced in paper
form by the department.
(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
(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 have certified to the department that they continue to meet all the standards for licensing contained in section 402 of this chapter.
(e) The creditor has provided in the creditor's renewal application:
(i) any information describing material changes in the information contained in the creditor's original application for licensure, or in any previous application, including any previous renewal application; and
(ii) any other information the director requires in order to evaluate the renewal of the license issued under this article.
(2) A license issued by the department authorizing a person to engage in first lien mortgage transactions as a creditor under this article may be revoked or 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 402 of this chapter;
not later than sixty (60) days after the due date.
(3) A person whose license is revoked or 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 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.
(4) If, at any time, the information or record contained in:
(a) an original application for licensure filed under section
402 of this chapter; or
(b) a renewal application filed under this section;
is or becomes inaccurate or incomplete in a material respect, the
applicant shall promptly file a correcting amendment with the
department.
(2) An order issued under subsection (1) must:
(a) include:
(i) a statement of the place, date, and time for a meeting with the department,
(ii) a description of the action contemplated by the department; and
(iii) a statement of the facts or conduct supporting the issuance of the order; and
(b) be accompanied by a notice stating that the licensee is entitled to:
(i) a reasonable opportunity to be heard; and
(ii) show the licensee's compliance with all lawful requirements for retention of the license;
at the meeting described in subdivision (a)(i).
(3) After the meeting described in subsection (2)(a)(i), the department
(a) the licensee has repeatedly and willfully violated:
(i) this article or any rule, order, or guidance document
(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
(c) the licensee obtained the license for the benefit of, or on
behalf of, another person;
(d) the licensee knowingly or intentionally made material
misrepresentations to, or concealed material information
from, the department; or
(c) (e) facts or conditions exist which would clearly have justified
the department in refusing to grant a license had the facts or
conditions been known to exist at the time the application for the
license was made. that, had they existed at the time the licensee
applied for the license, would have been grounds for the
department to deny the issuance of the license.
(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:
(a) the revocation or suspension;
(b) if a suspension has been ordered, the duration of the
suspension;
(c) the procedure for appealing the revocation or suspension
under IC 4-21.5-3-5; and
(d) any other terms and conditions that apply to 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 as a creditor 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 subsection 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).
(7) A If a person's license is revoked, suspended, or
relinquished, the revocation, suspension, or relinquishment of a
license does not impair or affect the any obligation of owed by any
person under any preexisting lawful contract. between: (a) the person;
whose license has been revoked, suspended, or relinquished; and (b)
any debtor.
(8) The department may reinstate a license or terminate a
suspension 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, there is no fact or condition that exists that clearly would
justify the department in refusing to reinstate a license.
(9) (8) If the director (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 a license through an emergency or
another temporary order under IC 4-21.5-3-6. IC 4-21.5-4.
(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
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.
(5) A creditor shall give the department written notice of the
resignation, discharge, or termination of an employee, independent
contractor, or agent against whom allegations were made that
accused the employee, independent contractor, or agent of:
(a) violating this article or other laws, regulations, rules, or
industry standards of conduct applicable to first lien
mortgage transactions; or
(b) fraud, dishonesty, theft, or the wrongful taking of
property.
The creditor shall provide the department the notice required
under this subsection not later than thirty (30) days after the
effective date of the resignation, discharge, or termination.
but in the case of a revolving first lien mortgage transaction, the two (2)
years required under this subsection is measured from the date of each
entry relating to the transaction.
(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 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 licensed creditor
or the exempt entity as required by the department, but not more
frequently than annually, in the form prescribed by the department.
(6) A 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 licensed creditor's
activities;
not later than thirty (30) days after the date of the event described in
this subsection.
(7) A licensee shall file notification with the department if the
licensee or any director, executive officer, or manager of the licensee
has been convicted of or pleaded guilty or nolo contendere to a felony
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.
(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 to applicable state and federal laws, rules, regulations, policies, and guidance; 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 this article is a reference to the law as in effect December 31,
(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.
(1) the creditor requires the debtor to make at any time during the term of the mortgage;
(2) represents the entire amount of the outstanding balance with respect to the mortgage; and
(3) the entire amount of which is due as of a specified date or at the end of a specified period;
if the aggregate amount of the minimum periodic payments required under the mortgage would not fully amortize the outstanding balance by the specified date or at the end of the specified period. The term does not include a payment required by a creditor under a due-on-sale clause (as defined in 12 U.S.C. 1701j-3(a)) or a payment required by a creditor under a provision in the mortgage that permits the creditor to accelerate the debt upon the debtor's default or failure to abide by the material terms of the mortgage.
(b) This article does not apply to the following:
(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.).
(13) The United States, any state or local government, or any
agency or instrumentality of any governmental entity, including
United States government sponsored enterprises.
(13) (14) A bona fide nonprofit entity organization not operating
in a commercial context, as determined by the director, if the
following criteria are satisfied:
(A) Subject to clause (B), the entity organization originates
only one (1) or both of the following types of mortgage
transactions:
(i) Zero (0) interest first lien mortgage transactions.
(ii) Zero (0) interest subordinate lien mortgage transactions.
(B) The entity organization does not require, under the terms
of the mortgage or otherwise, balloon payments with respect
to the mortgage transactions described in clause (A).
(C) The entity organization is exempt from federal income
taxation under Section 501(c)(3) of the Internal Revenue
Code.
(D) The entity's organization's primary purpose is to serve
the public by helping low income individuals and families
build, repair, and purchase housing.
(E) The entity organization uses only:
(i) unpaid volunteers; or
(ii) employees whose compensation is not based on the
number or size of any mortgage transactions that the
employees originate;
to originate the mortgage transactions described in clause
(A).
(F) The entity organization does not charge loan origination
fees in connection with the mortgage transactions described
in clause (A).
(15) A bona fide nonprofit organization (as defined in section
301.5(45) of this chapter) if the following criteria are satisfied:
(a) For each calendar year that the organization seeks the
exemption provided by this subdivision, the organization
certifies, not later than December 31 of the preceding
calendar year and on a form prescribed by the director
and accompanied by such documentation as required by
the director, that the organization is a bona fide nonprofit
organization (as defined in section 301.5(45) of this
chapter).
(b) The director determines that the organization
originates only mortgage transactions that are favorable to
the debtor. For purposes of this clause, a mortgage
transaction is favorable to the debtor if the director
determines that the terms of the mortgage transaction are
consistent with terms of mortgage transactions made in a
public or charitable context, rather than in a commercial
context.
JULY 1, 2012]: Sec. 301.5. In addition to definitions appearing in
subsequent chapters in this article, the following definitions apply
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
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 credit service 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) 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, 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 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 Office of 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 consumer 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 or a land contract (or another
(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,
regularly 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 24-4.4 or is made by an employee
of a person licensed or exempt from licensing under this article or
under IC 24-4.4, 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 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 consumer 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 or a land
contract (or another equivalent consensual security interest equivalent
to a mortgage or a land contract) on a dwelling or on residential real
estate upon which a dwelling is constructed or intended to be
constructed. The term does not include a land contract.
(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", with respect to a person who extends consumer credit, refers to a person who:
(a) extended consumer credit:
(i) more than twenty-five (25) times; or
(ii)
in the preceding calendar year; or
(b) extends or will extend consumer credit:
(i) more than twenty-five (25) times; or
(ii)
in the current calendar year, if the person did not meet the numerical standards described in subdivision (a) in the preceding 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 consumer 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 or a land
contract (or another equivalent consensual security interest equivalent
to a mortgage or a land contract) that constitutes a subordinate lien
on a dwelling or on residential real estate upon which a dwelling is
constructed or intended to be constructed. The term does not include
a land contract.
(43) "Unique identifier" means a number or other identifier assigned
by protocols established by the NMLSR.
(44) "Land contract" means a contract for the sale of real estate in
which the seller of the real estate retains legal title to the real estate
until the total contract price is paid by the buyer.
(45) "Bona fide nonprofit organization" means an organization
that does the following, as determined by the director under
criteria established by the director:
(a) Maintains tax exempt status under Section 501(c)(3) of
the Internal Revenue Code.
(b) Promotes affordable housing or provides home
ownership education or similar services.
(c) Conducts the organization's activities in a manner that
serves public or charitable purposes.
(d) Receives funding and revenue and charges fees in a
manner that does not encourage the organization or the
organization's employees to act other than in the best
interests of the organization's clients.
(e) Compensates the organization's employees in a manner
that does not encourage employees to act other than in the
best interests of the organization's clients.
(f) Provides to, or identifies for, debtors mortgage
transactions with terms that are favorable to the debtor (as
described in section 202(b)(15) of this chapter) and
comparable to mortgage transactions and housing
assistance provided under government housing assistance
programs.
(g) Maintains certification by the United States
Department of Housing and Urban Development or
employs counselors who are certified by the Indiana
housing and community development authority.
(2) At the time of prepayment of a credit sale not subject to the provisions of rebate upon prepayment (section 210 of this chapter), 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, in writing, an accurate payoff amount for the consumer credit sale to the debtor within seven (7) business days (excluding legal public holidays, Saturdays, and Sundays) after the creditor or mortgage servicer receives the debtor's written request for the accurate consumer credit sale payoff amount. A payoff statement provided by a creditor or mortgage servicer under this subsection must
(A) one hundred dollars ($100) if an accurate consumer credit sale payoff amount is not provided by the creditor or mortgage servicer within seven (7) business days (excluding legal public holidays, Saturdays, and Sundays) 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 seven (7) business days (excluding legal public holidays, Saturdays, and Sundays)
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" does not
include a land contract and means a consumer credit sale in which a
mortgage or a land contract (or another equivalent consensual
security interest equivalent to a mortgage or a land contract) that
constitutes a lien is created or retained against land upon which there
is constructed or intended to be constructed 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 five (5) business days
(excluding legal public holidays, Saturdays, and Sundays) 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 (excluding legal public holidays,
Saturdays, and Sundays) 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. The thirty (30) day period
described in this subsection may be extended for not more than fifteen
(15) business days (excluding legal public holidays, Saturdays, and
Sundays) if, before the end of the thirty (30) day period, the creditor,
the servicer, or the creditor's agent notifies the debtor of the extension
and the reason the extension is needed. 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.
(a) credit is granted by a person that is not regularly engaged 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 credit service 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.
(2) With respect to a consumer related sale not made pursuant to a revolving charge account, the parties may contract for an amount comprising the amount financed and a credit service charge not in excess of twenty-one percent (21%) per year calculated according to the actuarial method on the unpaid balances of the amount financed.
(3) With respect to a consumer related sale made pursuant to a revolving charge account, the parties may contract for a credit service charge not in excess of that permitted by the provisions on credit service charge for revolving charge accounts (IC 24-4.5-2-207).
(4) A person engaged in consumer related sales is not required to comply with IC 24-4.5-6-201 through IC 24-4.5-6-203.
to a consumer loan that is primarily secured by an interest in land, a
lender may contract for a penalty for prepayment of the loan in full, not
to exceed two percent (2%) of any amount prepaid within sixty (60)
days of the date of the prepayment in full, after deducting all refunds
and rebates as of the date of the prepayment. However, the penalty may
not be imposed:
(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 (section 210 of this chapter), the
total finance charge, including the prepaid finance charge but
excluding the loan origination fee allowed under section 201 of this
chapter, 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 section 201 of this
chapter.
(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, in writing, an
accurate payoff amount for the consumer loan to the debtor within
seven (7) business days (excluding legal public holidays, Saturdays,
and Sundays) after the creditor or mortgage servicer receives the
debtor's written request for the accurate consumer loan payoff amount.
A payoff statement provided by a creditor or mortgage servicer under
this subsection must include show the date the statement was prepared
and the payoff amount as of that date, including an itemization of
itemize the unpaid principal balance and each fee, charge, or other
sum included within the 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 seven (7) business days (excluding legal public
holidays, Saturdays, and Sundays) 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 seven (7) business days (excluding legal public holidays, Saturdays, and Sundays) 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
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.
(a) an application filed under section 502 of this chapter or section 502.1 of this chapter; or
(b) a renewal application filed under section 503.6 of this chapter;
is or becomes inaccurate or incomplete in a material respect, the applicant shall promptly file a correcting amendment with the department.
(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 for a person
licensed 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
(e) other background checks considered necessary by the director.
(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.
(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.
(7) Upon written request, the applicant is entitled to a hearing on the
question of the qualifications of the applicant for a license as provided
in IC 4-21.5.
(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) Examination fees as established by the department under
IC 28-11-3-5.
(c) An annual renewal fee as established by the department under
IC 28-11-3-5.
(9) A fee as established by the department under IC 28-11-3-5 may
be charged for each day a fee under subsection (8)(b) or (8)(c) is
delinquent.
(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.
(11) Except in a transaction approved under section 515 of this
chapter, a license issued under this section is not assignable or
transferable.
(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.
(7) Notwithstanding any other provision of law, any:
(a) application, renewal, or other form or document that:
(i) relates to licenses issued under this article; and
(ii) is made or produced in an electronic format;
(b) document filed as an electronic record in a multistate
automated repository established and operated for the
licensing or registration of mortgage lenders, brokers, or loan
originators; or
(c) electronic record filed through the NMLSR;
is considered a valid original document when reproduced in paper
form by the department.
(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
(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 have certified to the department that they 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.
(vi) The creditor has provided in the creditor's renewal application any information describing material changes in the information contained in the creditor's original application for licensure, or in any previous application, including any previous renewal application, along with any other information the director requires in order to evaluate the renewal of the license issued under this article.
(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 revoked or 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 revoked or 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 revocation or suspension to the department for an administrative review under IC 4-21.5-3.
Pending the decision from a hearing under IC 4-21.5-3 concerning license revocation or suspension, a license remains in force.
(4) If, at any time, the information or record contained in:
(a) an original application for licensure filed under section 502 or 502.1 of this chapter; or
(b) a renewal application filed under this section;
is or becomes inaccurate or incomplete in a material respect, the applicant shall promptly file a correcting amendment with the department.
(a) make consumer loans; or
(b) engage in consumer credit sales that are mortgage transactions;
an order to show cause why the license should not be revoked or suspended for a period determined by the department.
(2) An order
(a) include:
(i) a statement of the place, date, and time for a meeting with the department,
(ii) a description of the action contemplated by the department; and
(iii) a statement of the facts or conduct supporting the issuance of the order; and
(b) be accompanied by a notice stating that the licensee is entitled to:
(i) a reasonable opportunity to be heard; and
(ii) show the licensee's compliance with all lawful requirements for retention of the license;
at the meeting described in subdivision (a)(i).
(3) After the meeting described in subsection (2)(a)(i), the department
(a) the licensee has repeatedly and willfully violated:
(i) this article or any rule, order, or guidance document
lawfully made pursuant to this article; adopted or issued by
the department; or
(b) the licensee has repeatedly and willfully violated (ii) any
other state or federal consumer credit laws, rules, or
regulations applicable to consumer credit transactions;
(c) (b) the licensee does not meet the licensing qualifications
under section 503 of this chapter; or
(c) the licensee obtained the license for the benefit of, or on
behalf of, a person who does not qualify for the license;
(d) the licensee knowingly or intentionally made material
misrepresentations to, or concealed material information
from, the department; or
(d) (e) 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. that, had they existed at the time the licensee
applied for the license, would have been grounds for the
department to deny the issuance of the license.
(2) Except as provided in 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:
(a) the revocation or suspension;
(b) if a suspension has been ordered, the duration of the
suspension;
(c) the procedure for appealing the revocation or suspension
under IC 4-21.5-3-5; and
(d) any other terms and conditions that apply to the
revocation or suspension.
Within 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 make consumer loans may relinquish the license by notifying the department in writing of its relinquishment, but this relinquishment
(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).
(7)
(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.
(5) Every creditor required to be licensed under this article shall file
with the department a composite report as required by the department,
but not more frequently than annually, in the form prescribed by the
department relating to all consumer loans made by the licensee. The
department shall consult with comparable officials in other states for
the purpose of making the kinds of information required in the reports
uniform among the states. Information contained in the reports shall be
confidential and may be published only in composite form. The
department may impose a fee in an amount fixed by the department
under IC 28-11-3-5 for each day that a creditor fails to file the report
required by this subsection.
(6) A creditor required to be licensed under this article shall file
notification with the department if the licensee:
(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.
(7) Every licensee shall file notification with the department if the
licensee or any director, executive officer, or manager of the licensee
has been convicted of or pleaded guilty or nolo contendere to a felony
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.
FOLLOWS [EFFECTIVE JULY 1, 2012]: Sec. 602. Definition:
"Consumer Related Loan"; Rate of Loan Finance Charge _ (1) A
"consumer related loan" is a loan in which is not subject to the
provisions of IC 24-4.5 applying to consumer loans and in which the
principal does not exceed fifty thousand dollars ($50,000) if the debtor
is a person other than an organization. the following apply:
(a) The loan is made by a person who is not regularly engaged
as a lender in credit transactions of the same kind.
(b) The debtor is a person other than an organization.
(c) The debt is primarily for a personal, family, or household
purpose.
(d) Either the debt is payable in installments or a loan finance
charge is made.
(e) 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.
(2) With respect to a consumer related loan, including one made
pursuant to a revolving loan account, the parties may contract for the
payment by the debtor of a loan finance charge not in excess of that
permitted by the provisions on loan finance charge for consumer loans
other than supervised loans (IC 24-4.5-3-201).
(3) A person engaged in consumer related loans is not required
to comply with:
(a) the licensing requirements set forth in section 503 of this
chapter; or
(b) IC 24-4.5-6-201 through IC 24-4.5-6-203.
(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 that is a first lien mortgage transaction if the sale is otherwise a consumer credit
sale.
(2) "Consumer loan" includes a loan that is a first lien mortgage
transaction if the loan is otherwise a consumer loan.
(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 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
(b) The authority to require a creditor to comply with the prepayment penalty provisions set forth in IC 24-4.5-3-209.
(c) The authority to investigate complaints filed with the department by debtors.
(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.
(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.
(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, the department may apply to any civil court with jurisdiction for an order compelling compliance.
(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.
(1) has committed a violation of a statute, a rule, a final cease and desist order, a condition imposed in writing by the director in connection with the grant of an application or other request by the creditor, or a written agreement between the creditor and the director or the department;
(2) has committed fraudulent or unconscionable conduct; or
(3) has been convicted of
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
(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.
(e) A creditor shall give the department written notice of the resignation, discharge, or termination of an employee, independent contractor, or agent against whom allegations were made that accused the employee, independent contractor, or agent of:
(1) violating this article or other laws, regulations, rules, or industry standards of conduct applicable to consumer credit transactions; or
(2) fraud, dishonesty, theft, or the wrongful taking of property.
The creditor shall provide the department the notice required under this subsection not later than thirty (30) days after the effective date of the resignation, discharge, or termination.
(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 sections 201 and 203 of this chapter and this
section shall notify the department not later than thirty (30) days after
the person:
(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
(e) 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.
(2) Persons required to file notification who are assignees shall pay a fee as prescribed and fixed by the department under subsection (1) on the unpaid balances at the time of the assignment of obligations arising from consumer credit sales, consumer leases, and consumer loans made in Indiana taken by assignment during the preceding calendar year, but an assignee need not pay a fee with respect to an obligation on which the assignor or other person has already paid a fee.
(3) Persons required to file notification who are assignors shall pay a fee as prescribed by the department under subsection (1) on the unpaid balances at the time of the assignment of obligations arising from consumer credit sales, consumer leases, and consumer loans made in Indiana during the preceding calendar year unless the assignee has already paid the fees.
(4) Persons required to renew a license under
(5) A person that is required to file notification under IC 24-4.5-6-202 shall pay a fee at the same rate as prescribed and fixed by the department under subsection (1) on the original unpaid balances of all closed end credit obligations originating from the person's place of business during the time preceding the notification as specified under subsection (1), unless the fees for the obligations have been paid by another person.
(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.
(4) After
the cash amount of the principal of the small loan to the lender not later
than the end of the business day immediately following the day on
which the small loan was made.
(6) (7) 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.
(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 fixed by the department under IC 28-11-3-5 for each day a lessor is late in:
(1) submitting the information required under IC 24-7-8-2; or
(2) paying a fee under subsection (a) or (b).
(b) This subsection applies to a home loan, or the refinancing or
consolidation of a home loan, that:
(1) is closed after June 30, 2009; and
(2) has an interest rate that is subject to change at one (1) or more
times during the term of the home loan.
A creditor in a transaction to which this subsection applies may not
contract for and may not charge the borrower a prepayment fee or
penalty.
(c) This subsection applies to a home loan 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 five (5) business days (excluding legal public
holidays, Saturdays, and Sundays) 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 (excluding legal public holidays, Saturdays, and Sundays) 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. The thirty (30) day period described in this
subsection may be extended for not more than fifteen (15) business
days (excluding legal public holidays, Saturdays, and Sundays) if,
before the end of the thirty (30) day period, the creditor, the servicer,
or the creditor's agent notifies the debtor of the extension and the
reason the extension is needed. As used in this subsection, "short sale"
means a transaction in which the property that is the subject of a home
loan is sold for an amount that is less than the amount of the borrower's
outstanding obligation on the home loan. A creditor, a servicer, or a
creditor's agent 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.
(1) A home loan subject to this article.
(2) To the extent allowed under federal law, a loan described in IC 24-9-1-1 that is secured by a mortgage or a land contract (or another
mortgage or a land contract) on real estate in Indiana on which
there is located or will be located a structure or structures:
(A) designed primarily for occupancy of one (1) to four (4)
families; and
(B) that is or will be occupied by a borrower as the borrower's
principal dwelling.
(3) A first lien mortgage transaction (as defined in
IC 24-4.4-1-301) subject to IC 24-4.4.
(4) A consumer credit sale subject to IC 24-4.5-2 in which a
mortgage or a land contract (or another equivalent consensual
security interest equivalent to a mortgage or a land contract)
that constitutes a lien is created or retained against land:
(A) that is located in Indiana; and
(B) upon which there is constructed or intended to be
constructed a dwelling that is or will be used by the debtor
primarily for personal, family, or household purposes.
(5) A consumer credit loan subject to IC 24-4.5-3 in which a
mortgage or a land contract (or another equivalent consensual
security interest equivalent to a mortgage or a land contract)
that constitutes a lien is created or retained against land:
(A) that is located in Indiana; and
(B) upon which there is constructed or intended to be
constructed a dwelling that is or will be used by the debtor
primarily for personal, family, or household purposes.
(6) A loan in which a mortgage or a land contract (or another
equivalent consensual security interest equivalent to a mortgage
or a land contract) that constitutes a lien is created or retained
against land:
(A) that is located in Indiana;
(B) upon which there is constructed or intended to be
constructed 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 constructed or intended to be constructed a
dwelling that is purchased by or through the borrower for
investment or other business purposes.
(7) A reverse mortgage transaction that is secured by real estate
in Indiana on which there is located a structure that is occupied by
a borrower as the borrower's principal dwelling.
The term does not include a land contract.
(b) As used in this section, "real estate transaction" means the sale or lease of any legal or equitable interest in real estate:
(1) that is located in Indiana;
(2) upon which there is constructed or intended to be constructed a dwelling; and
(3) that is classified as residential for property tax purposes.
(c) A person may not do any of the following:
(1) Divide a home loan transaction into separate parts with the intent of evading a provision of this article.
(2) Structure a home loan transaction as an open-end loan with the intent of evading the provisions of this article if the home loan would be a high cost home loan if the home loan had been structured as a closed-end loan.
(3) Engage in a deceptive act in connection with a mortgage transaction or a real estate transaction.
(4) Engage in, or solicit to engage in, a real estate transaction or a mortgage transaction without a permit or license required by law.
(5) With respect to a real estate transaction or a mortgage transaction, represent that:
(A) the transaction has:
(i) certain terms or conditions; or
(ii) the sponsorship or approval of a particular person or entity;
that it does not have and that the person knows or reasonably should know it does not have; or
(B) the real estate or property that is the subject of the transaction has any improvements, appurtenances, uses, characteristics, or associated benefits that it does not have and that the person knows or reasonably should know it does not have.
(6) Maintain or offer to maintain an account for the receipt of funds for the payment of real estate taxes and insurance unless the person is any of the following:
(A) Any of the following that is chartered under the laws of a state or the United States:
(i) A bank.
(ii) A savings and loan association.
(iii) A credit union.
(iv) A savings bank.
(B) The creditor in a mortgage transaction.
(C) A mortgage servicer acting on behalf of the creditor in a
mortgage transaction.
(D) A closing agent (as defined in IC 27-7-3.7-1).
(7) Fail to provide the notice required under subsection (d), within
the time specified in subsection (d), if the person is a seller in a
real estate transaction described in subsection (d).
(d) This subsection applies to a real estate transaction that involves
a land contract between the seller and the buyer in the transaction. If
the real estate that is the subject of the transaction is subject to any
encumbrance, including any tax lien, foreclosure action, legal
judgment, or other encumbrance affecting the title to the real estate, the
seller must provide written notice by certified mail, return receipt
requested, of the encumbrance to the buyer:
(1) not later than the time the land contract is executed, if the
encumbrance is created before or at the time the land contract is
executed; or
(2) not later than ten (10) business days after the encumbrance is
created, if the encumbrance is created after the land contract is
executed.
(1) enact, issue, or enforce ordinances, resolutions, regulations, orders, requests for proposals, or requests for bids pertaining to financial or lending activities, including ordinances, resolutions, and rules that disqualify persons from doing business with a municipality and that are based upon lending terms or practices; or
(2) impose reporting requirements or any other obligations upon persons regarding financial services or lending practices or upon subsidiaries or affiliates that:
(A) are subject to the jurisdiction of the department of financial institutions;
(B) are subject to the jurisdiction or regulatory supervision of the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency,
(C) are chartered by the United States Congress to engage in secondary market mortgage transactions;
(D) are created by the Indiana housing and community
development authority; or
(E) originate, purchase, sell, assign, securitize, or service
property interests or obligations created by financial
transactions or loans made, executed, originated, or purchased
by persons referred to in clauses (A), (B), (C), or (D).
(1) "Financial institution" means any bank, trust company, corporate fiduciary, savings association, credit union, savings bank, bank of discount and deposit, or industrial loan and investment company organized or reorganized under the laws of this state, and includes licensees under IC 24-4.4 and IC 24-4.5.
(2) "Bank" or "bank or trust company" means a financial institution organized or reorganized as a bank, bank of discount and deposit, or trust company under the laws of this state with the express power to receive and accept deposits of money subject to withdrawal by check, and possessing such other rights and powers granted by the provisions of this article in express terms or by implication. The term "bank" or "bank or trust company" does not include a savings association, credit union, or industrial loan and investment company.
(3) "Domestic corporation" means a corporation formed under the laws of this state, and "foreign corporation" means every other corporation.
(4) "Articles of incorporation" includes both the original articles of incorporation and any and all amendments thereto, except where the original articles of incorporation only are expressly referred to, and includes articles of merger and consolidation, and, in the case of corporations organized before July 1, 1933, articles of reorganization, and all amendments thereto.
(5) "Incorporator" means one (1) of the signers of the original articles of incorporation.
(6) "Subscriber" means one who subscribes for shares of stock in a financial institution.
(7) "Shareholder" means one who is a holder of record of shares of stock in a financial institution.
(8) "Capital stock" means the aggregate amount of the par value of all shares of capital stock.
(9) "Capital" means the aggregate amount paid in on the shares of capital stock of a financial institution issued and outstanding.
(10) "Capital and surplus" or "unimpaired capital and unimpaired surplus" has the meaning set forth in 12 CFR 32.2.
(11) "Assets" includes all of the property and rights of every kind of a financial institution, and the term "fixed assets" means such assets as are not intended to be sold or disposed of in the ordinary course of business.
(12) "Principal office" means that office maintained by the financial institution in this state, the address of which is required by the provisions of this article to be kept on file in the office of the secretary of state.
(13) "Subscription" means any written agreement or undertaking, accepted by a financial institution, for the purchase of shares of capital stock in the financial institution.
(14) "Department" means the department of financial institutions.
(15) "Member" means a member of the department of financial institutions.
(16) "Branch" means any office, agency, mobile unit, messenger service, or other place of business
(A) the principal office of a bank;
(B) the principal office of an affiliate;
(C) a branch of an affiliate;
(D) an automated teller machine;
(E) a night depository;
(F) a temporary facility authorized in IC 28-2-13-22.5;
(G) a loan production office;
(H) a deposit production office; or
(I) other service delivery mechanisms not considered by the director to be a branch.
(17) "Subsidiary" means any foreign or domestic corporation or limited liability company in which the parent bank, savings bank, savings association, or industrial loan and investment company had at least eighty percent (80%) ownership before July 1, 1999, or is formed or acquired in accordance with IC 28-13-16 after June 30, 1999.
(18) "Savings bank" means a financial institution that:
(A) was organized, reorganized, or operating under IC 28-6 (before its repeal) before January 1, 1993;
(B) is formed as the result of a conversion under:
(i) IC 28-1-21.7;
(ii) IC 28-1-21.8;
(iii) IC 28-1-21.9; or
(iv) IC 28-1-30; or
(C) is incorporated under IC 28-12.
(19) "Corporate fiduciary" means a financial institution whose primary business purpose is to engage in the trust business (as defined in IC 28-14-1-8) and the execution and administration of fiduciary accounts as a nondepository trust company incorporated under Indiana law.
(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 director 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 director determines that any material information submitted is substantially inaccurate; or
(C) the director 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 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 a transaction if the director determines
that the direct or beneficial ownership of the bank, trust company, stock
savings bank, holding company, corporate fiduciary, or industrial loan
and investment company 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 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 subsection must be made not later
than ten (10) days after the president or other chief executive officer
becomes aware of the transfer of the shares of stock on the books of
the financial institution or holding company.
(h) To assist the department in making a determination under
subsection (c), the director may conduct any investigation the
director determines is warranted, including any background check
described in IC 28-11-5-4.5.
(i) This subsection applies to a transaction described in 12 CFR
303.83(b)(1), including the following:
(1) The acquisition of voting shares through inheritance.
(2) The acquisition of voting shares through a bona fide gift.
(3) The acquisition of voting shares in satisfaction of a debt
previously contracted in good faith, other than the acquisition
of a defaulted loan secured by a controlling amount of the
voting securities of a bank, trust company, stock savings bank,
bank holding company, corporate fiduciary, or industrial loan
and investment company.
In a transaction to which this subsection applies, the acquiring
person shall use the person's best effort to comply with the
requirements of this section. However, it is not a violation of this
section if the acquiring person is not able to satisfy the
requirements of this section and notifies the department of the
acquisition not later than thirty (30) calendar days after the
acquisition and provides any relevant information requested by the
department. This subsection does not limit the authority of the
department to conduct any investigation necessary to approve or
disapprove the transaction under subsection (c).
(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 or
a federal regulator may impose by regulation, rule, or policy, or
guidance, 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) As used in this chapter, "shareholder", with respect to a:
(1) mutual savings bank; or
(2) mutual saving association;
refers to a member of the mutual savings bank or mutual savings association.
SECTION 113, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2012]: Sec. 4. (a) After the resolutions
approving a joint agreement of merger have been adopted by the board
of directors of each of the corporations, such resolutions and joint
agreement shall be submitted for approval by the department. Subject
to any approvals required under federal law, the department may,
in its discretion, approve or disapprove the resolution and joint
agreement.
(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.
(5) Whether the management or other principals of the institution
that will result from the proposed transaction under this chapter
are qualified by character and financial responsibility to control
and operate in a legal and proper manner the resulting institution.
(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.
(1) mutual savings bank; or
(2) mutual savings association;
that is the subject of a proposed merger or consolidation under this chapter.
(1) deliver to the corporation before the vote is taken written notice of the shareholder's demand for payment for the shareholder's shares if the proposed action is effected; and
(2) not vote the shareholder's shares in favor of the proposed action.
(1) the shareholder's request to withdraw the shareholder's demand is consented to by the corporation;
(2) the merger or consolidation is abandoned;
(3) the shareholders revoke the authority to effect the merger or consolidation;
(4) a petition for the determination of value by a court is not filed within the time provided in this section; or
(5) a court of competent jurisdiction determines that the shareholder is not entitled to the relief provided by this section.
notice of the date of that action to each dissenting shareholder who has
made demand under this section. For purposes of giving this notice, the
corporation shall use the shareholder's address which appears on the
corporate records. In the notice the corporation shall include a written
offer to the shareholder to pay for the shareholder's shares at a specified
price considered by the corporation to be the value of them. If within
thirty (30) days after the date on which the merger or consolidation was
effected the value of the shares is agreed upon between a dissenting
shareholder and the surviving or new corporation, the surviving or new
corporation shall make payment to the shareholder for the shares. The
surviving or new corporation shall make the payment within ninety
(90) days after the date on which the merger or consolidation was
effected, upon surrender of the certificate or certificates representing
the shares. Upon payment of the agreed value, the dissenting
shareholder ceases to have any interest in the shares.
(g) (h) If within the period of thirty (30) days a dissenting
shareholder and the surviving or new corporation do not so agree, then
either the corporation or the dissenting shareholder may file a petition
in any circuit or superior court in the county in Indiana where the
principal office of the corporation is located requesting that the court
determine the value of the shares. However, the petition must be filed
within ninety (90) days after the effective date of the merger or
consolidation. Two (2) or more dissenting shareholders may join as
plaintiffs or be joined as defendants in the action, and two (2) or more
actions may be transferred and consolidated to avoid inconsistent
results and promote judicial economy. The jurisdiction of the court is
plenary and exclusive.
(h) (i) The court shall render judgment against the surviving or new
corporation for payment of an amount equal to the value of each
dissenting share multiplied by the number of dissenting shares that any
dissenting shareholder who is a party is entitled to require the surviving
or new corporation to purchase. The judgment is payable only upon the
endorsement and delivery to the surviving or new corporation of the
certificates for the shares described in the judgment. Any party may
appeal from the judgment.
(i) (j) Within twenty (20) days after the merger or consolidation is
effected, the shareholder shall submit the certificate or certificates
representing the shareholder's shares to the corporation for notation on
the certificate or certificates that demand for payment has been made.
The shareholder's failure to do so, at the option of the corporation,
terminates the shareholder's rights under this section unless a court of
competent jurisdiction, for good and sufficient cause shown, otherwise
directs. If shares represented by a certificate on which notation has
been so made are transferred, each new certificate issued for those
shares shall bear a similar notation together with the name of the
original dissenting holder of the shares, and a transferee of the shares
acquires by the transfer no rights in the corporation other than those
which the original dissenting shareholder had after making demand for
payment of the value of the shares.
(1) The name and address of the depository financial institution.
(2) The name and address of each proposed purchaser of conversion shares and a description of that purchaser's relationship to the depository financial institution.
(3) The title, per unit par value, number, and per unit and aggregate offering price of shares that the converted depository financial institution will issue.
(4) The number and percentage of shares that each investor will purchase or acquire in a merger or other combination.
(5) The aggregate number and percentage of shares that each director or officer of the converted depository financial institution, and any affiliates (as defined in IC 28-1-18.2-1) or associates (as defined in 12 CFR 563b.25) of the director or officer, will purchase.
(6) A description of any liquidation account to be established in connection with the voluntary supervisory conversion.
(7) Certified copies of all resolutions of the board of directors of the depository financial institution relating to the conversion.
(1) Evidence establishing that the depository financial institution with mutual ownership meets the eligibility requirements set forth in this chapter.
(2) An opinion of qualified, independent counsel or of an independent, certified public accountant concerning the tax consequences of the conversion, or an IRS ruling indicating that
the transaction qualifies as a tax free reorganization.
(3) A plan of voluntary supervisory conversion that complies with
section 8 of this chapter.
(4) A business plan, when required by the department.
(5) The depository financial institution's most recent audited
financial statements and call report.
(6) A detailed explanation of how the current capital levels make
the depository financial institution eligible to engage in a
voluntary supervisory conversion under this chapter.
(7) A description of the estimated conversion expenses.
(8) Evidence supporting the value of any noncash asset
contributions. Appraisals must be acceptable to the department
and each noncash asset must meet all other department policy
guidelines.
(9) Pro forma financial statements that reflect the effects of the
transaction. The depository financial institution must identify its
tangible, core, and risk based capital levels and show the
adjustments necessary to compute the pro forma capital levels.
The depository financial institution must prepare its pro forma
statements in conformance with department regulations and
policy.
(10) The proposed articles of incorporation and bylaws, if any, of
the depository financial institution formed as a result of the
voluntary supervisory conversion.
(11) The proposed stock certificate form, if any, for the depository
financial institution formed as a result of the voluntary
supervisory conversion.
(12) A copy of any agreements between the depository financial
institution formed as a result of the voluntary supervisory
conversion and proposed purchasers.
(13) A copy and description of all existing and proposed
employment contracts. The depository financial institution formed
as a result of the voluntary supervisory conversion must include
information describing the term, salary, and severance provisions
of the contract, the identity and background of the officer or
employee to be employed, and the amount of any conversion
shares to be purchased by the officer or employee or his or her
affiliates (as defined in IC 28-1-18.2-1) or associates (as defined
in 12 CFR 563b.25).
(14) Any:
(A) required filings under federal law; or
(B) waivers of compliance with federal law obtained as a
result of conflicts with state law.
(15) Applications for permission to organize a stock association
and for approval of a merger, if applicable, and a copy of any
application for Federal Home Loan Bank membership or FDIC
insurance of accounts, if applicable.
(16) A statement describing any other applications required under
federal or state banking laws for all transactions related to the
conversion, copies of all dispositive documents issued by
regulatory authorities relating to the applications, and, if
requested by the department, copies of the applications and
related documents.
(17) A description of any of the features of the application that do
not conform to the requirements of this section, including any
request for waiver of such requirements.
(18) An opinion of counsel acceptable to the department as to
the legality of the voluntary supervisory conversion.
(19) Any other information or documents requested by the
director.
(1) mutual savings bank; or
(2) mutual saving association;
refers to a member of the mutual savings bank or mutual savings association.
(1) sets forth the terms and conditions of the sale, lease, exchange, or other disposition; and
(2) directs that the proposed disposition be submitted to a vote of the
meeting.
The meeting shall be called by the resolution and notice of the meeting
shall be given in the manner provided in IC 28-13-5-8.
(b) Subject to section 5(c) of this chapter, and any approvals required under federal law, the department may approve a resolution if the corporation has and will have assets in excess of the corporation's liabilities and either of the following applies:
(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) An officer or a director of a corporation whose proposed disposition is approved by the department under subsection (b) may not negotiate for or receive any economic benefit in connection with any sale of assets under this chapter, except for:
(1) compensation and other benefits paid to the officer or director and to officers and directors of the purchasing institution in the ordinary course of business;
(2) any economic benefit realized by all shareholders as a result of the disposition; or
(3) any economic benefit received as part of a compensation or benefit plan existing at the time of the disposition and approved before the initiation of sale negotiations.
(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.
lease, exchange, or other disposition of the property and assets of a
corporation under this chapter. Any dissenting shareholder shall have
such rights and remedies as provided for in IC 28-1-7-21.
(b) For purposes of the application of IC 28-1-7-21 to this chapter,
the "effective date" of a sale, lease, exchange, or other disposition
under this chapter, within the meaning of IC 28-1-7-21, shall be is the
date upon which the disposition was authorized by the shareholders of
the corporation.
(c) In a proposed disposition described in section 3(b) of this
chapter, if the corporation that is the subject of the proposed
disposition is a mutual savings bank or a mutual savings
association, the rights and remedies for dissenting shareholders set
forth in IC 28-1-7-21 do not apply.
(b) After the board of directors of a corporation agrees to purchase all or substantially all of the assets of one (1) or more corporations, the board resolution approving the purchase and an application in the form prescribed by the director of the department must be submitted for approval by the department.
(c) Subject to any approvals required under federal law, the department, in its discretion, may approve or disapprove an application and a board resolution submitted under subsection (b). In deciding whether to approve or disapprove the board resolution and application, 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 management or other principals of the institution that will result from the proposed transaction under this chapter are qualified by character and financial responsibility to 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 of the information the department requires in reaching the department's decision.
(7) If deposits are to be transferred as part of the proposed transaction, whether the resulting institution will maintain adequate federal deposit insurance or such other deposit insurance as approved by the director.
(d) The approval of the department of the purchase of all or substantially all of the assets of one (1) or more corporations is not required under this section if the resulting corporation is a corporation organized or reorganized under the laws of:
(1) a state (as defined in IC 28-2-17-19) other than Indiana; or
(2) the United States.
(b) Unless the language used specifically indicates otherwise, the terms "bank or trust company" and "bank and trust company" as used in IC 28-1-11 through IC 28-1-20 mean any bank or trust company organized under this article and any bank of discount and deposit, loan and trust and safe deposit company, or trust company organized under any statute enacted prior to February 24, 1933.
(b) Subject to such regulations, rules, policies, and guidance 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, 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) (9) 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 fifteen percent (15%) of
the capital and surplus of the bank or trust company.
(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) (c) 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.
small business investment companies then held by the bank would
exceed five percent (5%) of its total equity capital.
(b) A bank or trust company may purchase for its own account and
sell:
(1) shares of open-end investment companies the portfolios of
which consist solely of securities that are eligible for purchase
and sale by national banking associations; and
(2) collateralized obligations that are eligible for purchase and
sale by national banking associations. However, a bank or trust
company may purchase for its own account and sell the
obligations only to the extent that a national banking association
can purchase and sell those obligations.
(c) A bank or trust company may deposit its funds in:
(1) a federally chartered savings association; or
(2) a savings association or other entity organized and operated
according to federal law or the laws of any state or the District of
Columbia;
the accounts of which are insured by the Federal Deposit Insurance
Corporation.
(d) A bank or trust company 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 subsection, a
security is speculative or has speculative characteristics if at the time
of purchase the security:
(1) is rated below the first four (4) rating classes by a generally
recognized security rating service;
(2) is in default; or
(3) is otherwise considered speculative by the director.
(e) A bank or trust company may purchase for its own account a
security that is not rated by a generally recognized security rating
service if:
(1) the bank or trust company at the time of purchase obtains
financial information that is adequate to document the investment
quality of the security; and
(2) the security is not otherwise considered speculative by the
director.
(f) Except as otherwise authorized by this title, a bank or trust
company may not purchase any share of stock of a corporation that is
not a subsidiary of that bank or trust company unless the purchase is
considered expedient to prevent loss from a debt previously contracted
in good faith. Any shares of stock thus acquired by a bank or trust
company that would not have been eligible for purchase shall be sold
and disposed of within six (6) months from the date of acquisition
unless the director grants an extension of time for the sale and
disposition.
(g) Notwithstanding any other provision of this article, a bank or
trust company may purchase for its own account shares of stock of a
banker's bank insured by the Federal Deposit Insurance Corporation or
a holding company that owns or controls a banker's bank insured by the
Federal Deposit Insurance Corporation. For the purposes of this
subsection, a "banker's bank" is a bank (as defined in IC 28-2-14-2):
(1) the stock of which is owned exclusively by other banks (as
defined in IC 28-2-14-2), or by a bank holding company the stock
of which is owned exclusively by other banks (as defined in
IC 28-2-14-2); and
(2) that is engaged exclusively in providing services to other
banks (as defined in IC 28-2-14-2), and to their officers, directors,
and employees.
A bank's or trust company's holdings of the stock of an insured banker's
bank or of a holding company that owns or controls an insured banker's
bank may not exceed ten percent (10%) of the capital and surplus of
the bank or trust company. A bank or trust company may not purchase
the stock of an insured banker's bank or of a holding company that
owns or controls an insured banker's bank if, after the purchase, the
bank or trust company would own more than five percent (5%) of any
class of voting securities of the banker's bank or holding company.
(h) Notwithstanding any other provision of this article, a bank or
trust company may invest in a casualty insurance company organized
solely for the purpose of insuring banks, trust companies, and bank
holding companies and their officers and directors from and against
liabilities, including those covered by bankers' blanket bonds and
director and officer liability insurance and other public liability
insurance. The investment must take the form of:
(1) the purchase for the bank's or trust company's own account of
shares of stock of the casualty insurance company or shares of
stock of an association of banks organized for the purpose of
funding the casualty insurance company; or
(2) loans to such an association of banks.
The total investment of any bank or trust company under this
subsection may not exceed five percent (5%) of the capital and surplus
of the bank or trust company.
(i) Any bank or trust company may establish or acquire a subsidiary
that engages in:
(1) the sale, distribution, or underwriting of securities issued by investment companies (as defined in Section 3 of the Investment Company Act of 1940 (15 U.S.C. 80a-3); or
(2) the underwriting or distribution of securities backed by or representing an interest in mortgages.
(j) As used in this section, "total equity capital" means unimpaired capital stock, unimpaired surplus, unimpaired undivided profits, subordinated debt that has been approved by the state or federal regulatory agencies, and one hundred percent (100%) of loan reserves.
(k) The department may define an investment security by department policy or by rule.
(l) A bank or trust company may establish a trading account for the purchase and resale of securities that are otherwise eligible for purchase or resale by the bank or trust company. The trading account must comply with the requirements established by policy or rule of the department.
(m) A bank or trust company 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.
(1) affordable housing development;
(2) small business and micro-enterprise support;
(3) commercial, industrial, and retail revitalization, retention, and expansion;
(4) capacity development and technical assistance support for community development corporations;
(5) employment and training efforts;
(6) human resource development; and
(7) social service enterprises.
(b) As used in this section, "community development corporation" means a private, nonprofit corporation:
(1) whose board of directors is comprised primarily of community representatives and business, civic, and community leaders; and
(2) whose principal purpose includes the provision of:
(A) housing;
(B) community based economic development projects; and
(C) social services;
that primarily benefit low-income individuals and communities.
(c) As used in this section, "capital and surplus" has the meaning set forth in IC 28-1-1-3(10).
(d) Subject to the limitations of this section, other laws, and any regulation, rule, policy, or guidance adopted by the department concerning investments in community based economic development, any bank or trust company may invest directly or indirectly in equity investments in a corporation, a limited partnership, a limited liability company, or another entity organized as:
(1) a community development corporation;
(2) an entity formed primarily to support community based economic development;
(3) an entity qualifying for the new markets tax credits under 26 U.S.C. 45D; or
(4) an entity approved by the director as being formed for a predominantly civic, community, or public purpose and that:
(A) primarily benefits low and moderate income individuals;
(B) primarily benefits low and moderate income areas;
(C) primarily benefits areas targeted for redevelopment by a government entity; or
(D) is a qualified investment under 12 CFR 25.23 for purposes of the Community Reinvestment Act of 1977 (12 U.S.C. 2901 et seq.).
(e) Except as provided in subsection (f), the aggregate of all equity investments by a bank or trust company under subsection (d) may not exceed:
(1) five percent (5%) of the capital and surplus of the bank or trust company without the prior written approval of the director; and
(2) fifteen percent (15%) of the capital and surplus of the bank or trust company under any circumstances.
(f) In determining whether to permit the aggregate of all equity investments by a bank or trust company under subsection (d) to exceed five percent (5%) of the capital and surplus of the bank or trust company under subsection (e)(1), the director shall consider whether:
(1) the aggregate of all equity investments under subsection (d) will pose a significant risk to the affected deposit insurance fund; and
(2) the bank or trust company is adequately capitalized.
(g) A bank or trust company shall not make any investment under this section if the investment would expose the bank or trust company to unlimited liability.
(b) The total loans and extensions of credit by a bank to a person outstanding at one (1) time and fully secured by readily marketable collateral having a market value, as determined by reliable and continuously available price quotations, at least equal to the amount of the funds outstanding may not exceed ten percent (10%) of the unimpaired capital and unimpaired surplus of the bank. The limitation in this subsection is separate from and in addition to the limitation contained in subsection (a).
(c) The total loans and extensions of credit by a bank includes any credit exposure to a person arising from a derivative transaction (as defined in 12 U.S.C. 84(b)(3)) between the bank and the person.
(1) savings associations; or
(2) savings association holding companies;
organized under the laws of any state or the United States.
(b) The procedures prescribed by the department must include the
following:
(1) The savings association must prepare and submit a conversion
plan to the department that provides the terms and conditions of
the charter conversion as required by the department. The
conversion plan must stipulate the manner of distribution of stock.
(2) The conversion plan must be adopted by at least a majority of
the board of directors of the savings association.
(3) Upon approval of a plan of charter conversion by the board of
directors of the savings association, the conversion plan and a
certified copy of the resolution of the board of directors approving
the conversion plan shall be submitted to the department for
approval.
(4) The conversion plan must be conditioned upon the approval
of at least a majority of the total number of votes eligible to be
cast at a regular or special meeting of the voting parties. In
obtaining the approval of the conversion plan by the voting
parties, the converting savings association shall provide to the
voting parties the information regarding the conversion plan that
the department requires. In determining the information that must
be provided, the department shall give due consideration to the
requirements of the office of thrift supervision regulations of the
primary federal regulator relating to proxy statements governed
by Section 14 of the Securities Exchange Act of 1934 (15 U.S.C.
78n).
(5) The savings association shall provide to the department the
additional relevant information requested by the department in
connection with the conversion plan.
(1) savings associations; or
(2) savings association holding companies;
organized under the laws of any state or the United States.
association may, upon approval of the department and, if required by
federal law, the office of thrift supervision, primary federal
regulator, effect a charter conversion.
(1) The savings association shall prepare and submit a plan of charter conversion to the department that provides the terms and conditions of the charter conversion as required by the department. However, if the plan of charter conversion complies with the requirements of the
(2) The plan of charter conversion must be adopted by not less than a majority of the board of directors of the savings association.
(3) Upon approval of a plan of charter conversion by the board of directors of the savings association, the plan of charter conversion and a certified copy of the resolution of the board of directors approving the plan of charter conversion shall be submitted to the department for approval.
(4) The plan of charter conversion shall be conditioned upon the approval of not less than a majority of the total number of votes cast at a regular or special meeting of the voting parties. In obtaining the approval of the plan of charter conversion by the voting parties, the converting savings association shall provide to the voting parties the information regarding the plan of charter conversion that the department requires. In determining the information that must be provided, the department shall give due consideration to the requirements of the
(5) The savings associations shall provide to the department the additional relevant information requested by the department in connection with the plan of charter conversion.
means the primary federal regulator of savings associations or
successors of savings associations (as defined in 12 U.S.C. 1462(a)
(FIRREA Section 301)).
(1) savings associations; or
(2) savings association holding companies;
organized under the laws of any state or the United States.
(1) The savings association shall prepare and submit a plan of mutual bank conversion to the department that provides the terms and conditions of the mutual bank conversion as required by the department. However, if the plan of mutual bank conversion complies with the requirements of the
(2) The plan of mutual bank conversion must be adopted by not less than a majority of the board of directors of the savings association.
(3) Upon approval of a plan of mutual bank conversion by the board of directors of the savings association, the plan of mutual bank conversion and a certified copy of the resolution of the board of directors approving the plan of mutual bank conversion shall be submitted to the department for approval.
(4) The plan of mutual bank conversion shall be conditioned upon the approval of not less than a majority of the total number of votes cast at a regular or special meeting of the voting parties. The method used to notify the voting parties of the meeting held to consider a plan of mutual bank conversion must be approved by the director of the department. The director may require the converting savings association to provide the voting parties with
information regarding the plan of mutual bank conversion.
(5) The savings association shall provide to the department the
additional relevant information requested by the department in
connection with the plan of mutual bank conversion.
(1) savings associations; or
(2) savings association holding companies;
organized under the laws of any state or the United States.
(b) The procedures prescribed by the department must include the following:
(1) The savings association must prepare and submit a conversion plan to the department that provides the terms and conditions of the stock savings bank conversion as required by the department. The resulting stock savings bank is not required to register its stock under the Securities and Exchange Act of 1934 (15 U.S.C. 77b et seq.) unless required by other applicable laws or regulations. A conversion plan is sufficient if it complies with the requirements of the
(2) The conversion plan must be adopted by not less than a majority of the board of directors of the savings association.
(3) Upon approval of the conversion plan by the board of directors of the savings association, the conversion plan and a certified copy of the resolution of the board of directors approving the conversion plan must be submitted to the department for approval.
(4) The conversion plan must be conditioned on the approval of not less than a majority of the total number of votes eligible to be
cast at a regular or special meeting of the voting parties. In
obtaining the approval of the conversion plan by the voting
parties, the converting savings association shall provide to the
voting parties the information regarding the conversion plan
required by the department. In determining the information that
must be provided, the department shall give due consideration to
the requirements of the Office of Thrift Supervision primary
federal regulator's regulations relating to proxy statements
governed by Section 14 of the Security and Exchange Act of 1934
(15 U.S.C. 78n).
(5) The savings association shall provide to the department
additional relevant information requested by the department
regarding the conversion plan.
(c) Voting parties have the voting rights provided by the bylaws or
charter of the converting savings association.
(1) savings associations (as defined in IC 28-15-1-11); or
(2) savings association holding companies;
organized under the laws of any state or the United States.
(b) The procedures prescribed by the department must include the following:
(1) The savings bank must prepare and submit a conversion plan to the department that provides the terms and conditions of the charter conversion as required by the department. The conversion plan shall stipulate the manner of distribution of stock.
(2) The conversion plan must be adopted by not less than a majority of the board of directors of the savings bank.
(3) Upon approval of a plan of charter conversion by the board of directors of the savings bank, the conversion plan and a certified copy of the resolution of the board of directors approving the conversion plan shall be submitted to the department for approval.
(4) The conversion plan shall be conditioned upon the approval
of not less than a majority of the total number of votes eligible to
be cast at a regular or special meeting of the voting parties. In
obtaining the approval of the conversion plan by the voting
parties, the converting savings bank shall provide to the voting
parties the information regarding the conversion plan that the
department requires. In determining the information that must be
provided, the department shall give due consideration to the
requirements of the Office of Thrift Supervision primary federal
regulator's regulations relating to proxy statements governed by
Section 14 of the Securities Exchange Act of 1934 (15 U.S.C.
78n).
(5) The savings bank shall provide to the department the
additional relevant information requested by the department in
connection with the conversion plan.
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.
issue to a licensee an order to show cause why the licensee's license
should not be revoked or suspended for a period determined by the
department.
(b) An order issued under subsection (a) must:
(1) include:
(A) a statement of the place, date, and time for a meeting
with the department, which date may not be less than ten
(10) days from the date of the order;
(B) a description of the action contemplated by the
department; and
(C) a statement of the facts or conduct supporting the
issuance of the order; and
(2) be accompanied by a notice stating that the licensee is
entitled to:
(A) a reasonable opportunity to be heard; and
(B) show the licensee's compliance with all lawful
requirements for retention of the license;
at the meeting described in subdivision (1)(A).
(c) After the meeting described in subsection (b)(1)(A), the
department may revoke or suspend the license if the department
finds that:
(1) the licensee has repeatedly and willfully violated:
(A) this chapter or any rule, order, or guidance document
adopted or issued by the department; or
(B) any other state or federal law, regulation, or rule
applicable to debt management companies;
(2) the licensee does not meet the licensing qualifications set
forth in section 5 of this chapter;
(3) the licensee obtained the license for the benefit of, or on
behalf of, a person who does not qualify for the license;
(4) the licensee knowingly or intentionally made material
misrepresentations to, or concealed material information
from, the department; or
(5) facts or conditions exist that, had they existed at the time
the licensee applied for the license, would have been grounds
for the department to deny the issuance of the license.
(d) Whenever the department revokes or suspends a license, the
department shall enter an order to that effect and notify the
licensee of:
(1) the revocation or suspension;
(2) if a suspension has been ordered, the duration of the
suspension;
(3) the procedure for appealing the revocation or suspension
under IC 4-21.5-3-5; and
(4) any other terms and conditions that apply to 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.
(e) Any person holding a license to operate a debt management
company may relinquish the license by notifying the department in
writing of the relinquishment. However, a relinquishment under
this subsection does not affect the person's liability for acts
previously committed and coming within the scope of this chapter.
(f) 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 (e).
(g) If a person's license is revoked, suspended, or relinquished,
the revocation, suspension, or relinquishment does not impair or
affect any obligation owed by any person under any existing
agreement or contract.
(e) (h) 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 a license through
an emergency or another temporary order under IC 4-21.5-3-6.
IC 4-21.5-4.
(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) 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) 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.
(3) 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.
(4) 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)".
(d) If during the term of a debt management agreement a
creditor that is a participating creditor in the plan agrees to reduce
the amount owed by the debtor, the licensee must, not later than
fourteen (14) days after the date the creditor agrees to the
reduction, provide the following disclosure in clear and
conspicuous type, surrounded by black lines:
"IMPORTANT INFORMATION FOR YOU TO CONSIDER
(1) (Description of the terms of the reduction).
(2) Reduction of debt as described in item (1) above may
result in taxable income to you, even though you will not
actually receive any money.".
(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) 8.3(e) 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.
(d) All creditors must be notified of the debtor's and licensee's
relationship.
(e) A licensee shall give to the contract debtor a dated receipt for
each payment, at the time of the payment, unless the payment is made
by check, money order, or automated clearinghouse withdrawal as
authorized by the contract debtor.
(f) A licensee shall, upon cancellation by a contract debtor of the
agreement, notify immediately in writing all creditors in the debt
management plan of the cancellation by the contract debtor.
(g) A licensee may not enter into 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
plan. The following must be included in the budget analysis:
(1) Documentation and verification of all income considered. All
income verification must be dated not more than sixty (60) days
before the completion of the budget analysis.
(2) Monthly living expense figures, which must be reasonable for
the particular family size and part of the state.
(3) Documentation and verification, 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, 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.
(h) A licensee may not enter into an agreement with a contract
debtor for a period longer than 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 If adjustments are
needed to change the indebtedness listed in the agreement, the licensee
may shall execute a new agreement or modify, in writing, the
existing agreement, using the revised figures. If during the term of
the original agreement, the agreement is modified in writing or a
new agreement is executed, a licensee:
(1) may not increase the amount of the monthly fee as originally
calculated under section 8.3(c)(2) of this chapter; and
(2) must decrease the amount of the monthly fee as originally
calculated under section 8.3(c)(2) of this chapter if applying the
percentage specified in section 8.3(c)(2)(A) of this chapter to the
new monthly amount of indebtedness to be paid through the
licensee (as of the date of the review under this subsection) would
result in an amount that is less than seventy-five dollars ($75) in
any month.
during the term of the original debt management plan agreement.
(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.
(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.
(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:
(1) 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; and
(2) at least one (1) payment has been made to a creditor under the plan.
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 by a creditor constitutes agreement by the creditor to the plan. A set up fee under this subdivision may not be collected until the debtor, or the licensee on behalf of the debtor, has made at least one (1) payment to a creditor under the plan.
(2) Subject to subsection (d), a monthly service fee of the lesser of:
(A) not more than fifteen percent (15%) of the 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) If during the term of the original agreement, the agreement is modified in writing or a new agreement is executed, a licensee:
(1) may not increase the amount of the monthly fee as originally calculated under subsection (c)(2); and
(2) must decrease the amount of the monthly fee as originally
calculated under subsection (c)(2) if applying the percentage
specified in subsection (c)(2)(A) to the monthly amount of
indebtedness to be paid through the licensee as of the date of
the modification of the original agreement or the execution of
the new agreement, as applicable, would result in an amount
that is less than seventy-five dollars ($75) in any month.
(d) (e) 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 not more than one hundred dollars ($100),
which may be accrued as a close-out fee.
(e) (f) A licensee may not charge a contract debtor more than one
(1) set up fee or one (1) cancellation close-out fee unless the contract
debtor leaves the services of the licensee for more than six (6) months.
(f) (g) 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 conferred on the contract
debtor in connection with the charge. Supporting documents may be
required by the department. The department shall determine whether
the charge:
(1) would be imposed in relation to some benefit conferred on the
consumer; and
(2) is reasonable in relation to the benefit conferred.
An additional charge is not permitted unless approved by the
department.
(g) (h) For purposes of this chapter, the terms of an agreement
commence on the date on which the agreement is made.
(h) (i) 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) (j) 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), (f), is not considered a debt owed by
the debtor to 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 thirty (30) 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) 8.3(e)
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) 8.3(e) 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 a contract debtors debtor 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 or a licensee's employee discovers, or has a
reasonable suspicion of, embezzlement or other unlawful appropriation
of money held in trust, the licensee or the licensee's employee shall (1)
immediately notify the department in writing. and (2) Unless the
department by regulation, rule, policy, or guidance provides
otherwise, the licensee shall give notice to the department describing
the remedial action taken or to be taken not later than five (5) days after
the licensee or the licensee's employee 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 the
fee that is 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.
(i) At least once every three (3) months the licensee shall render an
accounting to the contract debtor which must itemize the total amount
received from the contract debtor, the total amount paid each creditor,
the amount of charges deducted, and any amount held in reserve. A
licensee shall provide such an accounting to a contract debtor not later
than seven (7) days after written demand, but is not required to provide
more than three (3) such accountings per six (6) month period.
(j) Upon the completion or termination of a contract between a
licensee and a contract debtor, the licensee shall provide to the contract
debtor a statement:
(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.
(b) A trust office established under this section by a bank, trust company, or savings bank shall not:
(1) receive deposits;
(2) pay checks; or
(3) lend money;
at the trust office.
(1) that has been organized or reorganized under the laws of the United States or the state of Indiana;
(2) that has its principal office in Indiana; and
(3) that:
(A) is an "insured bank" (as defined in Section 3(h) of the Federal Deposit Insurance Act (12 U.S.C. 1813(h)) or is eligible to make application to become an insured depository institution under Section 5 of the Federal Deposit Insurance Act (12 U.S.C. 1815); or
(B) is a stock savings bank that was formed as a result of a conversion under IC 28-1-21.8 or IC 28-1-21.9 or incorporated under IC 28-12.
(b) Except as provided in subsection (a)(3)(B), the term "bank" does not include:
(1) any institution that has been or is chartered
(2) institutions of the "Farm Credit System" as described in 12 U.S.C. 2001 through 2260, which include the Farm Credit Banks, the Federal Land Bank Associations, the Production Credit Associations, the Banks for Cooperatives, and any other institution that may become a part of the Farm Credit System, as chartered by and subject to the supervision of the Farm Credit Administration; or
(3) any other institution that has been organized or reorganized as a savings association, credit union, or industrial loan and investment company.
(1) that has been organized or reorganized under the laws of the
United States, any state of the United States, or the District of
Columbia; and
(2) that:
(A) is an "insured bank" (as defined in Section 3(h) of the
Federal Deposit Insurance Act (12 U.S.C. 1813(h)) or is
eligible to make application to become an insured depository
institution under Section 5 of the Federal Deposit Insurance
Act (12 U.S.C. 1815); or
(B) is a stock savings bank that was formed as a result of
conversion under IC 28, incorporated under IC 28-12, or
organized or reorganized under the laws of any other state of
the United States.
(b) Except as provided in subsection (a)(2)(B), the term "bank" does
not include:
(1) any institution that has been or is chartered by the Federal
Home Loan Bank Board or the Office of Thrift Supervision; or
regulated as a federal savings association or federal savings
bank under Section 5 of the Home Owners Loan Act (12
U.S.C. 1464);
(2) institutions of the "Farm Credit System" as described in 12
U.S.C. 2001 through 2260, which include the Farm Credit Banks,
the Federal Land Bank Associations, the Production Credit
Associations, the Banks for Cooperatives, and any other
institution that may become a part of the Farm Credit System, as
chartered by and subject to the supervision of the Farm Credit
Administration; or
(3) any other institution that has been organized or reorganized as
a savings association, a credit union, or an industrial loan and
investment company.
(1) any agency of another state with primary responsibility for organizing and supervising banks; and
(2) the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System,
(1) Any agency of another state with primary responsibility for
organizing and supervising banks.
(2) The Office of the Comptroller of the Currency, the Federal
Deposit Insurance Corporation, the Board of Governors of the
Federal Reserve System, the Office of Thrift Supervision, and any
successor to these agencies.
(1) formed as a result of conversion under IC 28-1-21.7, IC 28-1-21.8, or IC 28-1-21.9 after December 31, 1992;
(2) incorporated under IC 28-12; or
(3) formed as a result of conversion under IC 28-1-30.
(b) A savings bank described in subsection (a) is governed by IC 28-13 in addition to this article.
(c) A reference in this article to formation and operation by a board means formation by conversion and operation by an elected board of directors.
(d) As to a mutual savings bank, a reference in IC 28-13-5, IC 28-13-6, IC 28-1-7, IC 28-1-7.1,
(e) Notwithstanding subsection (d), in a proposed disposition described in IC 28-1-8-3(b) of this chapter, the rights and remedies for dissenting shareholders set forth in IC 28-1-7-21 do not apply.
(b) A savings bank or its affiliate (as defined in IC 28-6.2-1-4) may act as an insurance producer for the sale of any life insurance policy or annuity contract issued by a life insurance company (as defined in IC 27-1-2-3) authorized to do business in the state or states where the insurance producer operates.
(c) A savings bank or its affiliate that acts as an insurance producer for the sale of a life insurance policy or an annuity contract under subsection (b):
(1) is subject to all requirements of IC 27 with respect to the insurance producer's activity in Indiana; and
(2) must comply with the disclosure requirements under IC 27-1-38.
(d) A savings bank or its affiliate may not condition:
(1) an extension of credit;
(2) a lease or sale of real or personal property;
(3) the performance of a service; or
(4) the amount charged for:
(A) extending credit;
(B) leasing or selling real or personal property; or
(C) performing services;
upon a person's purchase of a life insurance policy or an annuity contract from the savings bank or its affiliate.
(e) This section does not prohibit a savings bank or its affiliate from requiring that a person, as a condition to a transaction, obtain a life insurance policy from an insurance company acceptable to the savings bank or its affiliate.
(f) Subject to any limitations or restrictions that the department or a federal regulator may impose by regulation, rule,
follows:
(1) Life insurance purchased or held in connection with employee
compensation or benefit plans approved by the savings bank's
board.
(2) Life insurance purchased or held to recover the cost of
providing preretirement or postretirement employee benefits
approved by the savings bank's board.
(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) affordable housing development;
(2) small business and micro-enterprise support;
(3) commercial, industrial, and retail revitalization, retention, and expansion;
(4) capacity development and technical assistance support for community development corporations;
(5) employment and training efforts;
(6) human resource development; and
(7) social service enterprises.
(b) As used in this section, "community development corporation" means a private, nonprofit corporation:
(1) whose board of directors is comprised primarily of community representatives and business, civic, and community leaders; and
(2) whose principal purpose includes the provision of:
(A) housing;
(B) community based economic development projects; and
(C) social services;
that primarily benefit low income individuals and communities.
and lease losses; minus (B) intangible assets. (2) Purchased mortgage
servicing rights. (3) Mandatory convertible debt to the extent of twenty
percent (20%) of the sum of capital, capital surplus, and purchased
mortgage servicing rights. (4) Other mandatory convertible debt,
limited life preferred stock, and subordinated notes and debentures to
the extent that the debt, stock, notes, and debentures qualify as "tier II
capital" under 12 CFR 325. "capital and surplus" has the meaning
set forth in IC 28-1-1-3(10).
(b) (d) Subject to the limitations of this section, other laws, and
any regulation, rule, policy, or guidance adopted by the
department concerning investments in community based economic
development, a savings bank may 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 liability companies organized for such
purposes. Investments by a savings bank under this subsection shall not
exceed: (1) in any one (1) project, two percent (2%); and (2) in the
aggregate, five percent (5%);
of the capital and surplus of the savings bank, unless the director makes
the determination set forth in subsection (c). (c) Investments by a
savings bank under subsection (b) may exceed the limit set forth in
subsection (b)(2) if the director determines that: (1) the aggregate
investments by the savings bank under subsection (b) in excess of five
percent (5%) of the capital and surplus of the savings bank will not
pose a significant risk to the affected deposit insurance fund; and (2)
the savings bank is adequately capitalized. However, in no case shall
the aggregate investments by a savings bank under subsection (b)
exceed ten percent (10%) of the capital and surplus of the savings
bank. equity investments in a corporation, a limited partnership, a
limited liability company, or another entity organized as:
(1) a community development corporation;
(2) an entity formed primarily to support community based
economic development;
(3) an entity qualifying for the new markets tax credits under
26 U.S.C. 45D; or
(4) an entity approved by the director as being formed for a
predominantly civic, community, or public purpose and that:
(A) primarily benefits low and moderate income
individuals;
(B) primarily benefits low and moderate income areas;
(C) primarily benefits areas targeted for redevelopment by
a government entity; or
(D) is a qualified investment under 12 CFR 25.23 for
purposes of the Community Reinvestment Act of 1977 (12
U.S.C. 2901 et seq.).
(e) Except as provided in subsection (f), the aggregate of all
equity investments by a savings bank under subsection (d) may not
exceed:
(1) five percent (5%) of the capital and surplus of the savings
bank without the prior written approval of the director; and
(2) fifteen percent (15%) of the capital and surplus of the
savings bank under any circumstances.
(f) In determining whether to permit the aggregate of all equity
investments by a savings bank under subsection (d) to exceed five
percent (5%) of the capital and surplus of the savings bank under
subsection (e)(1), the director shall consider whether:
(1) the aggregate of all equity investments under subsection
(d) will pose a significant risk to the affected deposit insurance
fund; and
(2) the savings bank is adequately capitalized.
(d) (g) A savings bank shall not make any investment under
subsection (b) this section if the investment would expose the savings
bank to unlimited liability.
(b) The total loans and extensions of credit by a savings bank to a person outstanding at one (1) time and fully secured by readily marketable collateral having a market value, as determined by reliable and continuously available price quotations, at least equal to the amount of the funds outstanding may not exceed ten percent (10%) of the unimpaired capital and unimpaired surplus of the savings bank. The limitation in this subsection is separate from and in addition to the limitation contained in subsection (a).
(c) The total loans and extensions of credit by a savings bank includes any credit exposure to a person arising from a derivative transaction (as defined in 12 U.S.C. 84(b)(3)) between the savings bank and the person.
1, 2012]. Sec. 13. (a) This section does not apply to a savings bank
organized, reorganized, or operating under IC 28-6 (before its repeal)
before January 1, 1993.
(b) A savings bank shall maintain sixty percent (60%) of its assets
in investments that qualify under 26 U.S.C. 7701(a)(19).
(b) The total amount of the investment securities of any one (1) obligor or maker, purchased or held by any savings bank for its own account may not at any time exceed ten percent (10%) of the amount of the total equity capital of the savings bank.
(1) A bank that:
(A) has been organized or reorganized under the laws of the United States, any state of the United States, or the District of Columbia; and
(B) is an "insured bank" (as defined in Section 3(h) of the Federal Deposit Insurance Act (12 U.S.C. 1813(h)) eligible to make application to become an insured depository institution under Section 5 of the Federal Deposit Insurance Act (12 U.S.C. 1815).
(2) Notwithstanding subsection (b), a savings bank formed as a result of conversion.
(b) The term does not include any of the following:
(1) An institution that has been or is chartered
(2) Institutions of the "Farm Credit System" as described in 12 U.S.C. 2001 through 2260, which include the Farm Credit Banks, the Federal Land Bank Associations, the Production Credit Associations, the Banks for Cooperatives, and any other institution that may become a part of the Farm Credit System, as chartered by and subject to the supervision of the Farm Credit Administration.
(3) Another institution that has been organized or reorganized as a savings association, a credit union, or an industrial loan and investment company.
(1) is:
(A) organized under IC 28-6.2-2 or converted under IC 28-6.2-7-6;
(B) organized under the laws of any other state or the United States; and
(2) has control over:
(A) any savings bank; or
(B) any company that is or becomes a mutual holding company under this article.
(b) A mutual savings bank may, upon application to and with the approval by the department and the
(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 sections 17.1 and 17.2 of this chapter.
(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) Obligations of national mortgage associations issued under
the authority of the National Housing Act.
(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 section 31.5 of this chapter, 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) 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.
(J) For a credit union that is well capitalized (as defined in 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, is rated below the first four (4) rating
classes by a generally recognized security rating service, or
is otherwise considered speculative by the director.
(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 and if the security is
not otherwise considered speculative by the director.
(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).
(K) Collateralized obligations that are eligible for purchase
and sale by federal credit unions. However, a credit union may
purchase for its own account and sell the obligations only to
the extent that a federal credit union can purchase and sell
those obligations.
(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.
(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.
(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.
(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.
(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.
(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.
(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.
(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.
(12) To establish branch offices, upon approval of the department,
provided that all books of account shall be maintained at the
principal office.
(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.
(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.
(15) To sell and cash negotiable checks, travelers checks, and
money orders for members.
(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.
(17) To exercise such incidental powers necessary or requisite to
enable it to carry on effectively the business for which it is
incorporated.
(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.
(19) To issue shares 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.
(20) A credit union may To exercise any rights and privileges that
are:
(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.
(21) To sell, pledge, or discount any of its assets. However, a
credit union may not pledge any of its assets as security for the
safekeeping and prompt payment of any money deposited, except
that a credit union may, for the safekeeping and prompt payment
of money deposited, give security as authorized by federal law.
(22) To purchase assets of another credit union and to assume the
liabilities of the selling credit union.
(23) To act as a fiscal agent of the United States and to receive
deposits from nonmember units of the federal, state, or county
governments, from political subdivisions, and from other credit
unions upon which the credit union may pay varying interest rates
at varying maturities subject to terms, rates, and conditions that
are established by the board of directors. However, the total
amount of public funds received from units of state and county
governments and political subdivisions that a credit union may
have on deposit may not exceed twenty percent (20%) of the total
assets of that credit union, excluding those public funds.
(24) To join the National Credit Union Administration Central
Liquidity Facility.
(25) To participate in community investment initiatives under the
administration of organizations:
(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
(0.1%) of total assets of the credit union. A recipient of a
contribution or loan is not considered qualified for credit union
membership. A contribution or participation loan made under this
subdivision must be approved by the board of directors.
(26) To establish and operate an automated teller machine
(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.
(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).
(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.
(c) Subject to any limitations or restrictions that the department
or a federal regulator may impose by regulation, rule, policy, or
guidance, a credit union 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
credit union's board of directors.
(2) Life insurance purchased or held to recover the cost of
providing preretirement or postretirement employee benefits
approved by the credit union'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 federal credit union may purchase or
hold under 12 CFR 701.19(c).
(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 all real estate mortgage loans shall include the
following:
(A) The loan application.
(B) The mortgage instrument.
(C) The note.
(D) The disclosure statement.
(E) The documentation of property insurance.
(F) an For the real estate for which the loan is made, a
written appraisal, on the real estate for which the loan is
made. which must be performed by a state licensed or
certified appraiser designated by the board of directors if
the amount of the loan is at least two hundred fifty
thousand dollars ($250,000).
(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) an obligation of the member to repay the funds; or
(2) a pledge of specific property by or on behalf of the member and from which the funds advanced are repayable.
The term includes any contractual liability of a credit union to advance funds to or on behalf of a member, to the extent specified by the department. The term also includes any credit exposure to a person arising from a derivative transaction (as defined in 12 U.S.C.
84(b)(3)) between the credit union and the person.
(b) As used in this section, "member" includes an individual, a sole
proprietorship, a partnership, a joint venture, an association, a trust, an
estate, a business trust, a limited liability company, a corporation, a
sovereign government, or an agency, instrumentality, or political
subdivision of a sovereign government, or any similar entity or
organization.
(c) Except as provided in subsection (e), the total loans and
extensions of credit by a credit union to a member outstanding at any
given time and not fully secured, as determined in a manner consistent
with subsection (d), by collateral with a market value at least equal to
the amount of the loan or extension of credit may not exceed fifteen
percent (15%) of the capital and surplus of the credit union.
(d) Except as provided in subsection (e), the total loans and
extensions of credit by a credit union to a member outstanding at any
given time and fully secured by readily marketable collateral having a
market value, as determined by reliable and continuously available
price quotations, at least equal to the amount of funds outstanding may
not exceed ten percent (10%) of the capital and surplus of the credit
union. The limitation in this subsection is separate from and in addition
to the limitation set forth in subsection (c).
(e) The limitations set forth in subsections (c) and (d) are subject to
the following exceptions:
(1) Loans or extensions of credit arising from the discount of
commercial or business paper evidencing an obligation to the
member negotiating it with recourse are not subject to any
limitation based on capital and surplus.
(2) The purchase of bankers' acceptances of the kind described in
12 U.S.C. 372 and issued by a financial institution organized or
reorganized under the laws of Indiana or any other state or the
United States are not subject to any limitation based on capital
and surplus.
(3) Loans or extensions of credit secured by bills of lading,
warehouse receipts, or similar documents transferring or securing
title to readily marketable staples are subject to a limitation of
thirty-five percent (35%) of capital and surplus in addition to the
general limitations if the market value of the staples securing each
additional loan or extension of credit at all times equals or
exceeds one hundred fifteen percent (115%) of the outstanding
amount of the loan or extension of credit. The staples shall be
fully covered by insurance whenever it is customary to insure
such staples.
(4) Loans or extensions of credit secured by bonds, notes, certificates of indebtedness, or Treasury bills of the United States or by any other obligation fully guaranteed as to principal and interest by the United States are not subject to any limitation based on capital and surplus.
(5) Loans or extensions of credit to or secured by unconditional takeout commitment or guarantees of any department, agency, bureau, board, commission, or establishment of the United States or any corporation wholly owned directly or indirectly by the United States are not subject to any limitation based on capital and surplus.
(6) Loans or extensions of credit secured by a segregated deposit account in the lending credit union are not subject to any limitation based on capital and surplus.
(7) Loans or extensions of credit to any credit union, when the loans or extensions of credit are approved by the director of the department, are not subject to any limitation based on capital and surplus.
(f) Loans or extensions of credit arising from the discount of negotiable or nonnegotiable installment consumer paper that carries a full recourse endorsement or unconditional guarantee by the member transferring the paper are subject under this section to a maximum limitation equal to twenty-five percent (25%) of the capital and surplus, notwithstanding the collateral requirements set forth in subsection (d).
(g) If the credit union's files or the knowledge of the credit union's officers of the financial condition of each maker of consumer paper described in subsection (f) is reasonably adequate, and an officer of the credit union designated for that purpose by the board of directors of the credit union certifies in writing that the credit union is relying primarily upon the responsibility of each maker for payment of the loans or extensions of credit and not upon any full or partial recourse endorsement or guarantee by the transferor, the limitations of this section as to the loans or extensions of credit of each maker shall be the sole applicable loan limitations.
(h) Loans or extensions of credit secured by shipping documents or instruments transferring or securing title covering livestock or giving a lien on livestock when the market value of the livestock securing the obligation is not at any time less than one hundred fifteen percent (115%) of the face amount of the note covered are subject under this section, notwithstanding the collateral requirements set forth in subsection (d), to a maximum limitation equal to twenty-five percent (25%) of the capital and surplus.
(i) Loans or extensions of credit that arise from the discount by dealers in dairy cattle of paper given in payment for dairy cattle, which paper carries a full recourse endorsement or unconditional guarantee of the seller and that are secured by the cattle being sold, are subject under this section, notwithstanding the collateral requirements set forth in subsection (d), to a limitation of twenty-five percent (25%) of the capital and surplus.
(j) Except as otherwise provided, an officer, director, employee, or attorney of a credit union who stipulates for, receives, or consents or agrees to receive, any fee, commission, gift, or thing of value, from any person, for the purpose of procuring or endeavoring to procure for any member any loan from or the purchase or discount of any paper, note, draft, check, or bill of exchange by the credit union, commits a Class A misdemeanor.
(k) Except as otherwise provided in this chapter, any credit union that holds obligations of indebtedness in violation of the limitations prescribed in this section shall, not later than July 1, 2006, cause the amount of the obligations to conform to the limitations prescribed by this chapter and by the provisions of this section. The department may, in its discretion, extend the time for effecting this conformity, in individual instances, if the interests of the depositors will be protected and served by an extension. Upon the failure of a credit union to comply with the limitations, in accordance with this section or in accordance with any order of the department concerning the limitations, the department may declare that the credit union is conducting its business in an unauthorized or unsafe manner and proceed in accordance with IC 28-1-3.1-2.
(l) The department may apply the provisions of 12 CFR 32 in the application and administration of this chapter.
determined by the department.
(b) An order issued under subsection (a) must:
(1) include:
(A) a statement of the place, date, and time for a meeting
with the department, which date may not be less than ten
(10) days from the date of the order;
(B) a description of the action contemplated by the
department; and
(C) a statement of the facts or conduct supporting the
issuance of the order; and
(2) be accompanied by a notice stating that the licensee is
entitled to:
(A) a reasonable opportunity to be heard; and
(B) show the licensee's compliance with all lawful
requirements for retention of the license;
at the meeting described in subdivision (1)(A).
(c) After the meeting described in subsection (b)(1)(A), the
department may revoke or suspend the license if the department
finds that:
(1) the licensee has repeatedly and willfully violated:
(A) this chapter or any rule, order, or guidance document
adopted or issued by the department; or
(B) any other state or federal law, regulation, or rule
applicable to the business of a pawnbroker;
(2) the licensee does not meet the licensing qualifications set
forth in this chapter;
(3) the licensee obtained the license for the benefit of, or on
behalf of, a person who does not qualify for the license;
(4) the licensee knowingly or intentionally made material
misrepresentations to, or concealed material information
from, the department; or
(5) facts or conditions exist that, had they existed at the time
the licensee applied for the license, would have been grounds
for the department to deny the issuance of the license.
(d) Whenever the department revokes or suspends a license, the
department shall enter an order to that effect and notify the
licensee of:
(1) the revocation or suspension;
(2) if a suspension has been ordered, the duration of the
suspension;
(3) the procedure for appealing the revocation or suspension
under IC 4-21.5-3-5; and
(4) any other terms and conditions that apply to 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.
(e) Any person holding a license to operate as a pawnbroker
may surrender the license by complying with section 10.1 of this
chapter. However, a surrender of a license under section 10.1 of
this chapter does not affect the person's liability for acts previously
committed and coming within the scope of this chapter.
(f) If the director determines it to be in the public interest, the
director may pursue the revocation of a license of a licensee that
has surrendered the license under section 10.1 of this chapter.
(g) If a person's license is revoked, suspended, or surrendered,
the revocation, suspension, or surrender does not impair or affect
any obligation owed by any person under any existing contract,
pledge, or pawn ticket.
(b) (h) 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 a license through
an emergency or another temporary order under IC 4-21.5-3-6.
IC 4-21.5-4.
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. A fee
established by the department under IC 28-11-3-5 may be charged
for each day a fee under this subsection is delinquent.
(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) Subsection (a) applies only if the pledger is given a reasonable opportunity during:
(1) the term of the loan; and
(2) the two (2) month period described in subsection (a);
to repay the loan and redeem the pawned article.
(c) During the term of the loan and the two (2) month period described in subsection (a), the pawnbroker may not allow the public to have access to the pawned article.
(d) If a pawnbroker gives notice to the department under section 10.1 of this chapter that the pawnbroker intends to cease engaging in business as a pawnbroker in Indiana, the pawnbroker may accept, through the two (2) month period described in subsection (a) with respect to any loan, partial payments from any pledger that has one (1) or more loans outstanding with the pawnbroker. A partial payment made under this subsection must be applied to a loan's principal and used to reduce the pledger's loan obligation. Acceptance of partial payments under this subsection does not require the pawnbroker to extend the two (2)
month period described in subsection (a) with respect to any loan.
(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. A fee established by the department under IC 28-11-3-5 may be charged for each day a fee under this section is delinquent.
(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.
(1) request financial data from the licensee in addition to that required under section 38(a)(1) of this chapter; or
(2) conduct an in-state, onsite examination of an authorized delegate's operation or a licensee's location without prior notice to the authorized delegate or licensee.
(b) All reasonable costs of an examination incurred under subsection (a)(2) shall be paid by the:
(1) authorized delegate whose operation is examined; or
(2) the licensee whose location is examined;
in accordance with the fee schedule adopted under IC 28-11-3-5. A fee established by the department under IC 28-11-3-5 may be charged for each day a fee under this section is delinquent.
(b) An order issued under subsection (a) must:
(1) include:
(A) a statement of the place, date, and time for a meeting with the department, which date may not be less than ten (10) days from the date of the order;
(B) a description of the action contemplated by the department; and
(C) a statement of the facts or conduct supporting the issuance of the order; and
(2) be accompanied by a notice stating that the licensee is entitled to:
(A) a reasonable opportunity to be heard; and
(B) show the licensee's compliance with all lawful requirements for retention of the license;
at the meeting described in subdivision (1)(A).
(c) After the meeting described in subsection (b)(1)(A), the department may revoke or suspend the license if the department finds that:
(1) the licensee has repeatedly and willfully violated:
(A) this chapter or any rule, order, or guidance document adopted or issued by the department; or
(B) any other state or federal law, regulation, or rule applicable to the business of money transmission;
(2) the licensee does not meet the licensing qualifications set forth in this chapter;
(3) the licensee obtained the license for the benefit of, or on behalf of, a person who does not qualify for the license;
(4) the licensee knowingly or intentionally made material misrepresentations to, or concealed material information from, the department; or
(5) facts or conditions exist that, had they existed at the time the licensee applied for the license, would have been grounds for the department to deny the issuance of the license.
(d) Whenever the department revokes or suspends a license, the department shall enter an order to that effect and notify the licensee of:
(1) the revocation or suspension;
(2) if a suspension has been ordered, the duration of the suspension;
(3) the procedure for appealing the revocation or suspension under IC 4-21.5-3-5; and
(4) any other terms and conditions that apply to 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.
(e) Any person holding a license to engage in the business of
money transmission may relinquish the license by notifying the
department in writing of the relinquishment. However, a
relinquishment under this subsection does not affect the person's
liability for acts previously committed and coming within the scope
of this chapter.
(f) If the director determines it to be in the public interest, the
director may pursue the revocation of a license of a licensee that
has relinquished the license under subsection (e).
(g) If a person's license is revoked, suspended, or relinquished,
the revocation, suspension, or relinquishment does not impair or
affect any obligation owed by any person under any existing lawful
contract.
(b) (h) 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 a license through
an emergency or another temporary order under IC 4-21.5-3-6.
IC 4-21.5-4.
(1) That the licensee appoints the person as its delegate with authority to sell payment instruments and accept funds to be transmitted by or on behalf of the licensee.
(2) That neither a licensee nor an authorized delegate may authorize a subdelegate without the written consent of the director.
(3) That licensees are subject to supervision and regulation by the director.
(4) An acknowledgment that the authorized delegate consents to the director's inspection, with or without prior notice to the licensee or authorized delegate, of the books, records, and accounts of an authorized delegate of the licensee when the director has a reasonable basis to believe that the licensee or
authorized delegate is in violation of this chapter.
(5) That authorized delegates are under a duty to act only as
authorized under the contract with the licensee and that an
authorized delegate who exceeds the delegate's authority is
subject to cancellation of the delegate's contract and disciplinary
action by the director.
(b) Subject to sections 50 and 51 of this chapter, an authorized
delegate of a licensee or of a person exempt from licensure under
section 1 of this chapter is exempt from the licensing requirements
of this chapter if the authorized delegate acts within the scope of
the written contract executed under subsection (a) between the
authorized delegate and the licensee or exempt person.
(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. A fee established by the department under IC 28-11-3-5 may be charged for each day a fee under this section is delinquent.
(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.
(b) An order issued under subsection (a) must:
(1) include:
(A) a statement of the place, date, and time for a meeting with the department, which date may not be less than ten (10) days from the date of the order;
(B) a description of the action contemplated by the department; and
(C) a statement of the facts or conduct supporting the issuance of the order; and
(2) be accompanied by a notice stating that the licensee is entitled to:
(A) a reasonable opportunity to be heard; and
(B) show the licensee's compliance with all lawful requirements for retention of the license;
at the meeting described in subdivision (1)(A).
(c) After the meeting described in subsection (b)(1)(A), the department may revoke or suspend the license if the department finds that:
(1) the licensee has repeatedly and willfully violated:
(A) this chapter or any rule, order, or guidance document adopted or issued by the department; or
(B) any other state or federal law, regulation, or rule applicable to the business of cashing checks for consideration;
(2) the licensee does not meet the licensing qualifications set forth in this chapter;
(3) the licensee obtained the license for the benefit of, or on behalf of, a person who does not qualify for the license;
(4) the licensee knowingly or intentionally made material misrepresentations to, or concealed material information from, the department; or
(5) facts or conditions exist that, had they existed at the time the licensee applied for the license, would have been grounds for the department to deny the issuance of the license.
(d) Whenever the department revokes or suspends a license, the department shall enter an order to that effect and notify the licensee of:
(1) the revocation or suspension;
(2) if a suspension has been ordered, the duration of the suspension;
(3) the procedure for appealing the revocation or suspension under IC 4-21.5-3-5; and
(4) any other terms and conditions that apply to 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.
(e) Any person holding a license to engage in the business of cashing checks for consideration may relinquish the license by notifying the department in writing of the relinquishment. However, a relinquishment under this subsection does not affect the person's liability for acts previously committed and coming within the scope of this chapter.
(f) If the director determines it to be in the public interest, the director may pursue the revocation of a license of a licensee that has relinquished the license under subsection (e).
(g) If a person's license is revoked, suspended, or relinquished, the revocation, suspension, or relinquishment does not impair or affect any obligation owed by any person under any existing lawful contract.
section applies to a meeting all meetings of the members. at which at
least four (4) members are physically present at the place where the
meeting is conducted.
(b) A member may participate in a meeting of the members by using
a means of communication that permits:
(1) all other members participating in the meeting; and
(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 for all purposes, including
establishing a quorum and voting on all matters to come before the
members.
(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) (d) 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) be organized as a limited liability company;
(2) convert to a limited liability company; or
(3) merge with or into a limited liability company;
under the laws of Indiana or the United States, including any rules or regulations adopted or promulgated under the laws of Indiana or the United States.
(b) A
(1) IC 23-18; and
(2) this title.
If a provision of IC 23-18 conflicts with a provision of this title or with
any rule of the department, the provision of this title or the rule the
department controls.
(c) Any filing required to be made under IC 23-18 shall be made in
the same manner as for a bank financial institution that is organizing
or is organized in stock form.
(d) The department may prescribe any requirements for:
(1) the articles of organization; and
(2) the operating agreement;
of a financial institution that is organized and operates as a limited
liability company.
(e) The department has the exclusive authority under this title to
regulate a financial institution organized as a limited liability company.
A financial institution that is a limited liability company is subject to
the department's authority in the same manner as a bank that is
organized in stock form.
(f) A financial institution that is a limited liability company is
subject to the provisions of this title that apply to banks, except for the
provisions concerning corporate governance (IC 28-13), in the same
manner as a financial institution that is organized in stock form, subject
to the following:
(1) In the case of a manager managed limited liability company,
"director" means a manager of the limited liability company.
(2) In the case of a member managed limited liability company,
"director" means a member of the limited liability company.
(g) A financial institution may not:
(1) organize as;
(2) convert to; or
(3) merge with or into;
a limited liability company without the prior approval of the
department under this title.
(b) A corporate fiduciary, trust company, or bank that is organized and doing business under the laws of any state, territory, or district other than Indiana, including a national bank or national trust company that is primarily domiciled in any other state, has the same rights, privileges, and restrictions, including capital requirements, as an Indiana bank, an Indiana corporate fiduciary, or an Indiana trust company of like character or charter, and to the same extent as if the corporate fiduciary, trust company, or bank organized and doing business under the laws of any state, territory, or district other than Indiana had been organized under this article, to transact the business for which a certificate of admission is issued.
(1) savings associations; or
(2) savings association holding companies;
organized under the laws of any state or the United States.
(1) Accept deposit accounts.
(2) Issue evidence of deposit account ownership.
(3) Declare and distribute earnings to members.
(4) Pay, in part or in full, withdrawal requests of deposit accounts.
(5) Subject to the provisions and restrictions of 12 U.S.C. 84 and 12 CFR 32:
(A) Make loans to members on the security of deposit accounts.
(B) Make property improvement loans.
(C) Make other loans as provided under IC 28-15-8.
(D) Make mortgage loans.
(E) Accept additional collateral on mortgage loans.
(F) Purchase and sell loans.
(G) Negotiate loan servicing agreements.
(H) Purchase and sell participating interests in loans.
(I) Issue letters of credit with specific expiration dates.
(J) Make secured or unsecured loans, which are partially insured or guaranteed in any manner by any state of the United States, the United States government, or any of its agencies or
government sponsored enterprises.
(K) Purchase commercial paper that is denominated in United
States currency and that:
(i) is rated by at least one (1) nationally recognized
investment rating service in one (1) of the two (2) highest
grades; or
(ii) meets another standard of creditworthiness determined
to be appropriate by the director.
(L) Make, purchase, or participate in alternative mortgage
loans as provided in IC 28-15-11.
(6) Acquire and sell real estate in satisfaction of debts previously
contracted.
(7) Acquire real estate for the convenient transaction of its
business. A savings association has the same powers under this
subdivision as a bank or trust company has under IC 28-1-11-5.
(8) Notwithstanding any other law, establish, maintain, or relocate
one (1) or more branch offices by following the provisions of
IC 28-2-13, IC 28-2-17, or IC 28-2-18 as if the savings association
were a bank.
(9) Become a member in any agency or instrumentality of the
federal government. For the purposes of this subdivision,
membership in an agency or instrumentality of the federal
government may include:
(A) purchasing stock;
(B) purchasing notes and debentures; or
(C) borrowing money.
(10) Subject to any limitations imposed by the department
through policy:
(A) invest the money deposited in the savings association in
the shares of the capital stock, bonds, debentures, notes, or
other obligations of a federal home loan bank of the United
States;
(B) become a member of the federal home loan bank of the
district in which Indiana is located or an adjoining district;
(C) borrow money from:
(i) a federal home loan bank described in clause (B);
(ii) the Federal Deposit Insurance Corporation; or
(iii) any other corporation;
(D) transfer, assign to, and pledge with a federal home loan
bank described in clause (B), the Federal Deposit Insurance
Corporation, or any other corporation any of the bonds, notes,
contracts, mortgages, securities, or other property of the
savings association held or acquired as security for the
payment of loans entered into under clause (C); and
(E) exercise all rights, powers, and privileges conferred upon,
and do all things and perform all acts required of, members or
shareholders of a federal home loan bank by the Federal Home
Loan Bank Act (12 U.S.C. 1421 through 1449).
(11) Subject to the provisions and restrictions of 12 U.S.C. 24 and
12 CFR 1, invest in the following types of securities:
(A) Bonds, notes, certificates, and other valid obligations of
the United States government or any agency of the United
States government.
(B) Accounts offered by federally insured banks, savings
banks, and savings associations.
(C) Bonds, notes, or other evidences of indebtedness that are
general obligations supported by the full faith and credit of any
state in the United States or any city, town, or other political
subdivision in any state in the United States if the obligations:
(i) have been assigned one (1) of the four (4) highest grades
by a nationally recognized investment rating service; or
(ii) meet another standard of creditworthiness determined to
be appropriate by the director.
(D) Shares of stock of a subsidiary that does not exercise a
power or engage in any activity that is not authorized for the
savings association. The investment power granted by this
subdivision is separate from the investment power granted by
IC 28-15-9.
(E) Corporate debt securities that are denominated in United
States currency and that:
(i) are rated by at least one (1) nationally recognized
investment rating service in one (1) of the four (4) highest
grades; or
(ii) meet another standard of creditworthiness determined to
be appropriate by the director.
Corporate debt securities in which a savings association
invests under this clause must be convertible into stock at the
sole option of the holder, and a savings association is
prohibited from exercising the conversion option.
(F) Shares of open end investment companies that are eligible
for purchase by national banks.
(G) Bankers' acceptances that are eligible for purchase by
national banks.
(12) For the purpose of:
(A) check and deposit sorting and posting;
(B) computation and posting of interest and other credits and charges;
(C) preparation and mailing of checks, statements, notices, and similar items; or
(D) other clerical, bookkeeping, accounting, statistical, or similar functions performed by a savings association;
invest in a corporation organized in any state to perform those functions for two (2) or more savings associations, each of which owns a portion of the capital stock of the corporation. The total investment of a savings association under this subdivision may not exceed ten percent (10%) of the capital and surplus of the savings association. A savings association may not invest in this type of corporation unless the corporation furnishes assurances to the department that it will subject itself to examination by the department to the same extent as if the services were performed by the savings association.
(13) Lend money to other savings associations:
(A) the deposits of which are insured by the Federal Deposit Insurance Corporation; and
(B) that are incorporated and operating under the laws of any state or of the United States.
(14) Borrow money and mortgage or pledge its property to secure payment.
(15) Issue subordinated notes or debentures.
(16) Assess and collect interest, fees, and other charges.
(17) Insure its deposit accounts with the Federal Deposit Insurance Corporation or its successor.
(18) Act as an agent for the United States or its instrumentalities.
(19) Accept property for safe keeping or escrow.
(20) Rent or lease safe deposit boxes.
(21) Issue and sell checks, drafts, money orders, and other instruments for the transmission or payment of money.
(22) Exercise all the powers that:
(A) are incidental and proper; or
(B) may be necessary and usual;
in carrying on the business of the savings association.
(23) Purchase or construct buildings, hold legal title to the buildings, and lease the buildings for public purposes to municipal corporations or other public authorities that have resources sufficient to make payment of all rentals as they become due. Each lease agreement entered into under this subdivision
must provide that, upon expiration, the lessee will become the
owner of the building.
(24) Open or establish automated teller machines at any location.
An automated teller machine opened or established under this
subdivision may be owned and operated individually or jointly on
a cost sharing or fee basis.
(25) Act:
(A) in any fiduciary capacity in which a bank or trust company
is permitted to act under this title; and
(B) as an agent for the sale of real estate, without bond or other
security.
(26) Accept and maintain demand deposit accounts if the savings
association is insured by the Federal Deposit Insurance
Corporation or its successor.
(27) Without the approval of the department, to the extent
authorized by the board of directors of the savings association,
establish or maintain agencies that:
(A) only service and originate, but do not approve, loans and
contracts; or
(B) manage or sell real estate owned by the savings
association.
An agency established or maintained under this subdivision may
offer any services not referred to in this subdivision with the
approval of the department, except for accepting payment on
savings accounts. An agency shall maintain records of all
business it transacts and transmit copies to a branch or home
office of the savings association.
(b) Subject to any limitations or restrictions that the department or
a federal regulator may impose by regulation, rule, or policy, or
guidance, a savings association 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 savings
association's board of directors.
(2) Life insurance purchased or held to recover the cost of
providing preretirement or postretirement employee benefits
approved by the savings association'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).
FOLLOWS [EFFECTIVE JULY 1, 2012]: Sec. 1. (a) The following
limits apply to the loans that a savings association may make to one (1)
borrower:
(1) Loans that a savings association may make to one (1)
borrower are restricted by the provisions of 12 U.S.C. 84 and 12
CFR 32.
(2) Notwithstanding subdivision (1), a savings association may
loan to one (1) borrower no more than the lesser of:
(A) an amount equal to four percent (4%) of the assets of the
savings association; or
(B) five hundred thousand dollars ($500,000).
(3) Notwithstanding subdivisions (1) and (2), a savings
association may make loans to one (1) borrower to develop
domestic residential housing units in an amount equal to or less
than thirty percent (30%) of the savings association's unimpaired
capital and surplus if:
(A) the final purchase price of each single family dwelling unit
whose development is financed under this section does not
exceed five hundred thousand dollars ($500,000);
(B) loans made under this subdivision to all borrowers do not
in the aggregate exceed one hundred fifty percent (150%) of
the savings association's unimpaired capital and surplus; and
(C) the loans made under this subdivision comply with the
applicable loan to value requirements that apply to federal
savings associations.
(b) For purposes of any lending limits set forth under this article
with respect to savings associations, the total loans and extensions
of credit by a savings association includes any credit exposure to a
person arising from a derivative transaction (as defined in 12
U.S.C. 84(b)(3)) between the savings association and the person.
(1) The
program home mortgages published Federal Cost of Funds
Index calculated and made available by the Federal Home Loan
Mortgage Corporation on or about the twentieth day of each
month.
(2) The monthly national average mortgage rate index for all
major lenders for the purchase of previously occupied
single-family homes of the Office of Thrift Supervision or its
successor.
(3) The average cost to savings associations of funds insured by
the Federal Deposit Insurance Corporation, either for all Federal
Home Loan Bank districts or for a particular district or districts,
as computed semiannually and published by the Office of Thrift
Supervision or its successor and made available in news releases.
(4) (2) The monthly average of weekly auction rates on United
States Treasury bills with a maturity of three (3) months or six (6)
months, as published in the Federal Reserve Bulletin and made
available by the Federal Reserve Board each month.
(5) (3) The monthly average yield on United States Treasury
securities adjusted to a constant maturity of one (1), two (2), three
(3), or five (5) years, as published in the Federal Reserve Bulletin
and made available by the Federal Reserve Board each month.
(6) (4) Any rate that is designated by the department.
(b) In addition to the disclosures required by this chapter, the department may adopt rules under IC 4-22-2 or policies that require additional disclosures for alternative mortgage loans.
(b) Any Indiana laws prohibiting:
(1) the compounding of interest;
(2) capitalizing interest because contracted loan repayments create negative amortization; or
(3) paying interest on interest;
do not apply. For purposes of the application of IC 24-4.5-3 to a loan described in subsection (a), "principal" (as defined in IC 24-4.5-3-107(3)) includes interest unpaid and added to principal because the contracted repayments under the loan do not cover the entire interest due at any time.
(c) The lien of the loan provided by the mortgage and the loan documents:
(1) includes all advances or additions to principal of either principal or interest that are made in accordance with the terms of the loan documents; and
(2) is superior to any lien on the property created after the date the mortgage securing the loan is recorded, other than taxes and special property or taxing district assessments.
(1) merged or consolidated with; or
(2) converted into;
a federal savings and loan association, under the charter of the federal savings and loan association or under a new charter issued to the converted association or the merged or consolidated association, upon a vote of fifty-one percent (51%) or more of the votes cast at a legal meeting of the shareholders and members of the state chartered savings association called to consider the proposed merger, consolidation, or conversion.
(b) A merger, consolidation, or conversion under this section must be accomplished:
(1) in compliance with the laws of the United States relating to the merger, consolidation, or conversion; and
(2) upon terms and conditions prescribed or approved by the Office of
of directors and adopted by a vote of fifty-one percent (51%) or more
of the votes cast at any annual meeting or at any special meeting of its
members called to consider the action, may convert itself into a state
chartered savings association under this article.
(b) A resolution referred to in subsection (a), when adopted by the
members of a federal savings and loan association, must:
(1) designate the names and the number of the directors who will
serve as directors of the savings association after the conversion
takes effect; and
(2) authorize the directors to execute articles of incorporation.
(c) The articles of incorporation executed under this section must
include the contents required by IC 28-12-2-1 except that, instead of
disclosing the name and address of each incorporator as required by
IC 28-12-2-1(4), the articles must:
(1) indicate that the savings association is incorporated by
conversion of a federal savings and loan association into a state
chartered savings association; and
(2) state the name of the federal savings and loan association
converted under this section.
(d) The department must receive from the federal savings and loan
association:
(1) three (3) copies of the resolution, certified by the secretary or
assistant secretary of the federal savings and loan association; and
(2) the articles of incorporation, in triplicate, signed and
acknowledged by the directors designated under subsection
(b)(1).
(e) The department shall approve or disapprove the proposed
conversion of a federal savings and loan association into a state
chartered savings association under this section. The department may
not approve a proposed conversion unless the department, after
appropriate investigation or examination, finds all of the following:
(1) That the state chartered savings association resulting from the
conversion will operate in a safe, sound, and prudent manner.
(2) That the proposed charter conversion will not result in a state
chartered savings association that has:
(A) inadequate capital;
(B) unsatisfactory management; or
(C) poor earnings prospects.
(3) That the management or other principals of the savings
association are qualified by character and financial responsibility
to control and operate in a legal and proper manner the proposed
state chartered savings association.
(4) That the interests of the depositors, the creditors, and the public generally will not be jeopardized by the proposed charter conversion.
(f) If the department approves the resolution and articles of incorporation submitted under subsection (d), the department shall:
(1) indicate its approval on the resolution and articles of incorporation in the manner prescribed by IC 28-12-5-1; and
(2) present the articles of incorporation to the secretary of state.
(g) If the secretary of state finds that the articles of incorporation conform to law, the secretary of state shall:
(1) endorse the secretary's approval on the copies of the articles of incorporation;
(2) when all fees required by law have been paid:
(A) file one (1) copy of the articles of incorporation in the secretary's office; and
(B) issue a certificate of incorporation to the savings association; and
(3) return the certificate of incorporation and two (2) copies of the articles of incorporation to the directors of the savings association designated under subsection (b)(1).
(h) The conversion of a federal savings and loan association into a state chartered savings association under this section is effective when the secretary of state issues the certificate of incorporation under subsection (g). However, before the savings association may transact business under this article or incur indebtedness, except indebtedness that is incidental to its organization, one (1) of the copies of its articles of incorporation bearing the endorsement of the approval of the department and of the secretary of state must be filed for record with the recorder of the county in which the principal office of the savings association is located.
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