*ES0383.1*
February 15, 2022
ENGROSSED
SENATE BILL No. 383
_____
DIGEST OF SB 383 (Updated February 15, 2022 9:14 am - DI 140)
Citations Affected: IC 24-4.4; IC 24-4.5; IC 24-7; IC 28-1; IC 28-7;
IC 28-8; IC 28-10; IC 28-15.
Synopsis: Financial institutions and consumer credit. Provides that a
reference to federal law in: (1) the first lien mortgage lending act; (2)
the Uniform Consumer Credit Code (UCCC); or (3) the Indiana Code
title governing financial institutions; is a reference to the law as in
effect December 31, 2021 (versus December 31, 2020, under current
law). Amends the provisions in the UCCC governing authorized
finance charges for consumer loans (other than supervised loans) and
for supervised loans to specify that: (1) the entire section governing
finance charges for consumer loans (other than supervised loans) does
not apply to supervised loans; and (2) the loan finance charge for a
supervised loan must be: (A) contracted for between the lender and the
debtor; and (B) calculated by applying a rate not exceeding the
authorized rate to unpaid balances of the principal. Amends provisions
(Continued next page)
Effective: Upon passage; July 1, 2022.
Bassler, Zay
(HOUSE SPONSOR — CARBAUGH)
January 11, 2022, read first time and referred to Committee on Insurance and Financial
Institutions.
January 20, 2022, reported favorably — Do Pass.
January 31, 2022, read second time, amended, ordered engrossed.
February 1, 2022, engrossed. Read third time, passed. Yeas 49, nays 0.
HOUSE ACTION
February 8, 2022, read first time and referred to Committee on Financial Institutions and
Insurance.
February 15, 2022, reported — Do Pass.
ES 383—LS 6690/DI 101 Digest Continued
in the UCCC concerning permitted additional charges for guaranteed
asset protection (GAP) agreements for: (1) consumer credit sales; and
(2) consumer loans; to specify that the average retail value for a used
motor vehicle that is the subject of a GAP agreement is to be
determined by using a third party valuation service provider
customarily relied upon in the used motor vehicle commercial market
(versus by using the National Automobile Dealers Association average
retail value, under current law). Amends the Indiana Code section
concerning the department's duties of confidentiality with respect to
certain information concerning financial institutions to specify that
those duties apply to all regulated entities licensed or registered with
the department. Specifies that the required fidelity coverage for credit
unions: (1) applies to those directors, officers, and employees of the
credit union who have access to money or bonds of the credit union;
and (2) must be approved annually by the credit union's board of
directors as to the amount and form. Amends the statute governing
money transmitters to: (1) provide that a "payment instrument" does
not include a "stored value account"; and (2) remove the definition of
"stored value account". Changes references to a "federal savings and
loan association" to a "federal savings association" for purposes of the
statute concerning mergers, consolidations, and conversions involving
federal savings associations and savings associations chartered in
Indiana, to specify that a federal savings association may convert into
a savings association chartered in Indiana.
ES 383—LS 6690/DI 101ES 383—LS 6690/DI 101 February 15, 2022
Second Regular Session of the 122nd General Assembly (2022)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in this style type. Also, the
word NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
between statutes enacted by the 2021 Regular Session of the General Assembly.
ENGROSSED
SENATE BILL No. 383
A BILL FOR AN ACT to amend the Indiana Code concerning
financial institutions.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 24-4.4-1-102, AS AMENDED BY P.L.54-2021,
2 SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3 JULY 1, 2022]: Sec. 102. (1) This article shall be liberally construed
4 and applied to promote its underlying purposes and policies.
5 (2) The underlying purposes and policies of this article are:
6 (a) to permit and encourage the development of fair and
7 economically sound first lien mortgage lending practices; and
8 (b) to conform the regulation of first lien mortgage lending
9 practices to applicable state and federal laws, rules, regulations,
10 policies, and guidance.
11 (3) A reference to a requirement imposed by this article includes
12 reference to a related rule of the department adopted under this article.
13 (4) A reference to a federal law in this article is a reference to the
14 law as in effect December 31, 2020. 2021.
15 SECTION 2. IC 24-4.5-1-102, AS AMENDED BY P.L.54-2021,
ES 383—LS 6690/DI 101 2
1 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
2 JULY 1, 2022]: Sec. 102. (1) This article shall be liberally construed
3 and applied to promote its underlying purposes and policies.
4 (2) The underlying purposes and policies of this article are:
5 (a) to simplify, clarify, and modernize the law governing retail
6 installment sales, consumer credit, small loans, and usury;
7 (b) to provide rate ceilings to assure an adequate supply of credit
8 to consumers;
9 (c) to further consumer understanding of the terms of credit
10 transactions and to foster competition among suppliers of
11 consumer credit so that consumers may obtain credit at
12 reasonable cost;
13 (d) to protect consumer buyers, lessees, and borrowers against
14 unfair practices by some suppliers of consumer credit, having due
15 regard for the interests of legitimate and scrupulous creditors;
16 (e) to permit and encourage the development of fair and
17 economically sound consumer credit practices;
18 (f) to conform the regulation of consumer credit transactions to
19 the policies of the Consumer Credit Protection Act (15 U.S.C.
20 1601 et seq.) and to applicable state and federal laws, rules,
21 regulations, policies, and guidance; and
22 (g) to make uniform the law, including administrative rules
23 among the various jurisdictions.
24 (3) A reference to a requirement imposed by this article includes
25 reference to a related rule or guidance of the department adopted
26 pursuant to this article.
27 (4) A reference to a federal law in this article is a reference to the
28 law as in effect December 31, 2020. 2021.
29 (5) This article applies to a transaction if the director determines
30 that the transaction:
31 (a) is in substance a disguised consumer credit transaction; or
32 (b) involves the application of subterfuge for the purpose of
33 avoiding this article.
34 A determination by the director under this subsection must be in
35 writing and shall be delivered to all parties to the transaction.
36 IC 4-21.5-3 applies to a determination made under this subsection.
37 (6) The authority of this article remains in effect, whether a licensee,
38 an individual, or a person subject to this article acts or claims to act
39 under any licensing or registration law of this state, or claims to act
40 without such authority.
41 (7) A violation of a state or federal law, regulation, or rule
42 applicable to consumer credit transactions is a violation of this article.
ES 383—LS 6690/DI 101 3
1 (8) The department may enforce penalty provisions set forth in 15
2 U.S.C. 1640 for violations of disclosure requirements applicable to
3 mortgage transactions.
4 SECTION 3. IC 24-4.5-2-202, AS AMENDED BY P.L.69-2018,
5 SECTION 14, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
6 JULY 1, 2022]: Sec. 202. (1) In addition to the credit service charge
7 permitted by this chapter, a seller may contract for and receive any of
8 the following additional charges in connection with a consumer credit
9 sale:
10 (a) Official fees and taxes.
11 (b) Charges for insurance as described in subsection (2).
12 (c) Notwithstanding provisions of the Consumer Credit Protection
13 Act (15 U.S.C. 1601 et seq.) concerning disclosure, charges for
14 other benefits, including insurance, conferred on the consumer, if
15 the benefits are of value to the consumer and if the charges are
16 reasonable in relation to the benefits, and are excluded as
17 permissible additional charges from the credit service charge.
18 With respect to any additional charge not specifically provided for
19 in this section, to be a permitted charge under this subsection the
20 seller must submit a written explanation of the charge to the
21 department indicating how the charge would be assessed and the
22 value or benefit to the consumer. Supporting documents may be
23 required by the department. The department shall determine
24 whether the charge would be of benefit to the consumer and is
25 reasonable in relation to the benefits.
26 (d) A charge not to exceed twenty-five dollars ($25) for each
27 returned payment by a bank or other depository institution of a
28 dishonored check, electronic funds transfer, negotiable order of
29 withdrawal, or share draft issued by the consumer.
30 (e) Annual participation fees assessed in connection with a
31 revolving charge account. Annual participation fees must:
32 (i) be reasonable in amount;
33 (ii) bear a reasonable relationship to the seller's costs to
34 maintain and monitor the charge account; and
35 (iii) not be assessed for the purpose of circumvention or
36 evasion of this article, as determined by the department.
37 (f) A charge not to exceed twenty-five dollars ($25) for a
38 skip-a-payment service, subject to the following:
39 (i) At the time of use of the service, the consumer must be
40 given written notice of the amount of the charge and must
41 acknowledge the amount in writing, including by electronic
42 signature.
ES 383—LS 6690/DI 101 4
1 (ii) A charge for a skip-a-payment service may not be assessed
2 with respect to a consumer credit sale subject to the provisions
3 on rebate upon prepayment that are set forth in section 210 of
4 this chapter.
5 (iii) A charge for a skip-a-payment service may not be
6 assessed with respect to any payment for which a delinquency
7 charge has been assessed under section 203.5 of this chapter.
8 (g) A charge not to exceed ten dollars ($10) for an optional
9 expedited payment service, subject to the following:
10 (i) The charge may be assessed only upon request by the
11 consumer to use the expedited payment service.
12 (ii) The amount of the charge must be disclosed to the
13 consumer at the time of the consumer's request to use the
14 expedited payment service.
15 (iii) The consumer must be informed that the consumer retains
16 the option to make a payment by traditional means.
17 (iv) The charge may not be established in advance, through
18 any agreement with the consumer, as the expected method of
19 payment.
20 (v) The charge may not be assessed with respect to any
21 payment for which a delinquency charge has been assessed
22 under section 203.5 of this chapter.
23 (h) A charge for a GAP agreement, subject to subsection (4).
24 (2) An additional charge may be made for insurance written in
25 connection with the sale, other than insurance protecting the seller
26 against the consumer's default or other credit loss:
27 (a) with respect to insurance against loss of or damage to
28 property, or against liability, if the seller furnishes a clear and
29 specific statement in writing to the consumer, setting forth the
30 cost of the insurance if obtained from or through the seller and
31 stating that the consumer may choose the person, subject to the
32 seller's reasonable approval, through whom the insurance is to be
33 obtained; and
34 (b) with respect to consumer credit insurance providing life,
35 accident, unemployment or other loss of income, or health
36 coverage, if the insurance coverage is not a factor in the approval
37 by the seller of the extension of credit and is clearly disclosed in
38 writing to the consumer, and if, in order to obtain the insurance in
39 connection with the extension of credit, the consumer gives
40 specific, affirmative, written indication of the desire to do so after
41 written disclosure of the cost.
42 (3) With respect to a subordinate lien mortgage transaction, the
ES 383—LS 6690/DI 101 5
1 following closing costs, if the costs are bona fide, reasonable in
2 amount, and not for the purpose of circumvention or evasion of this
3 article:
4 (a) fees for title examination, abstract of title, title insurance,
5 property surveys, or similar purposes;
6 (b) fees for preparing deeds, mortgages, and reconveyance,
7 settlement, and similar documents;
8 (c) notary and credit report fees;
9 (d) amounts required to be paid into escrow or trustee accounts if
10 the amounts would not otherwise be included in the credit service
11 charge; and
12 (e) appraisal fees.
13 (4) An additional charge may be made for a GAP agreement, subject
14 to the following:
15 (a) A GAP agreement or GAP coverage may not be required by
16 the seller, and that fact must be disclosed in writing to the
17 consumer.
18 (b) The charge for the initial term of coverage under the GAP
19 agreement must be disclosed in writing to the consumer. The
20 charge may be disclosed on a unit-cost basis only in the case of
21 the following transactions:
22 (i) Revolving charge accounts.
23 (ii) Closed-end credit transactions, if the request for coverage
24 is made by mail or telephone.
25 (iii) Closed-end credit transactions, if the GAP agreement
26 limits the total amount of indebtedness eligible for coverage.
27 (c) If the term of coverage under the GAP agreement is less than
28 the term of the consumer credit sale, the term of coverage under
29 the GAP agreement must be disclosed in writing to the consumer.
30 (d) The consumer must sign or initial an affirmative written
31 request for coverage after receiving all required disclosures.
32 (e) The GAP agreement must include the following:
33 (i) In the case of GAP coverage for a new motor vehicle, the
34 manufacturer's suggested retail price (MSRP) for the motor
35 vehicle.
36 (ii) In the case of GAP coverage for a used motor vehicle, the
37 National Automobile Dealers Association (NADA) average
38 retail value for the motor vehicle, as determined by use of a
39 third party valuation service provider that is customarily
40 relied upon in the used motor vehicle commercial
41 marketplace.
42 (iii) The name of the financing entity taking assignment of the
ES 383—LS 6690/DI 101 6
1 agreement.
2 (iv) The name and address of the consumer.
3 (v) The name of the creditor selling the agreement.
4 (vi) Information advising the consumer that the consumer may
5 be able to obtain similar coverage from the consumer's primary
6 insurance carrier.
7 (vii) A coverage provision that includes a minimum deductible
8 of five hundred dollars ($500).
9 (viii) A provision providing for a minimum thirty (30) day
10 free-look period.
11 (ix) In the case of a consumer credit sale involving a motor
12 vehicle, a provision excluding the sale of GAP coverage if the
13 amount financed under the consumer credit sale (not including
14 the cost of the GAP agreement, the cost of any credit
15 insurance, and the cost of any warranties or service
16 agreements) is less than eighty percent (80%) of the
17 manufacturer's suggested retail price (MSRP), in the case of a
18 new motor vehicle, or the National Automobile Dealers
19 Association (NADA) average retail value (as determined by
20 use of a third party valuation service provider that is
21 customarily relied upon in the used motor vehicle
22 commercial marketplace), in the case of a used motor
23 vehicle.
24 (x) In the case of a GAP agreement in which the charge for the
25 agreement exceeds four hundred dollars ($400), specific
26 instructions that may be used by the consumer to cancel the
27 agreement and obtain a refund of the unearned GAP charge
28 before prepayment in full, in accordance with the procedures,
29 and subject to the conditions, set forth in subdivision (f).
30 (f) If the charge for the GAP agreement exceeds four hundred
31 dollars ($400), the consumer is entitled to cancel the agreement
32 and obtain a refund of the unearned GAP charge before
33 prepayment in full. Refunds of unearned GAP charges shall be
34 made subject to the following conditions:
35 (i) A refund of the charge for a GAP agreement must be
36 calculated using a method that is no less favorable to the
37 consumer than a refund calculated on a pro rata basis.
38 (ii) The consumer is entitled to a refund of the unearned GAP
39 agreement charge as outlined in the GAP agreement.
40 (iii) The seller of the GAP agreement is responsible for
41 making a timely refund to the consumer of unearned GAP
42 agreement charges under the terms and conditions of the GAP
ES 383—LS 6690/DI 101 7
1 agreement.
2 (g) Upon prepayment in full of the consumer credit sale:
3 (i) the GAP coverage is automatically terminated; and
4 (ii) the seller of the GAP agreement must issue a refund in
5 accordance with subdivision (f).
6 (h) A creditor that sells GAP agreements must:
7 (i) insure its GAP agreement obligations under a contractual
8 liability insurance policy issued by an insurer authorized to
9 engage in the insurance business in Indiana; and
10 (ii) retain appropriate records, as required under this article,
11 regarding GAP agreements sold, refunded, and expired.
12 (5) As used in this section, "expedited payment service" means a
13 service offered to a consumer to ensure that a payment made by the
14 consumer with respect to a consumer credit sale will be reflected as
15 paid and posted on an expedited basis.
16 (6) As used in this section:
17 (a) "guaranteed asset protection agreement";
18 (b) "guaranteed auto protection agreement"; or
19 (c) "GAP agreement";
20 means, with respect to consumer credit sales involving motor vehicles
21 or other titled assets, an agreement in which the seller agrees to cancel
22 or waive all or part of the outstanding debt after all property insurance
23 benefits have been exhausted after the occurrence of a specified event.
24 (7) As used in this section, "skip-a-payment service" means a
25 service that:
26 (a) is offered by a creditor to a consumer; and
27 (b) permits the consumer to miss or skip a payment due under a
28 consumer credit sale without resulting in default.
29 SECTION 4. IC 24-4.5-3-201, AS AMENDED BY P.L.85-2020,
30 SECTION 10, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
31 UPON PASSAGE]: Sec. 201. Loan Finance Charge for Consumer
32 Loans other than Supervised Loans—(1) This section does not apply
33 to a supervised loan (as defined in section 501 of this chapter).
34 Except as provided in subsections (7) and (9), with respect to a
35 consumer loan, other than a supervised loan (as defined in section 501
36 of this chapter), a lender may contract for a loan finance charge,
37 calculated according to the actuarial method, not exceeding twenty-five
38 percent (25%) per year on the unpaid balances of the principal (as
39 defined in section 107(3) of this chapter).
40 (2) In the case of a loan agreement entered into before July 1, 2020,
41 this section does not limit or restrict the manner of contracting for the
42 loan finance charge, whether by way of add-on, discount, or otherwise,
ES 383—LS 6690/DI 101 8
1 so long as the rate of the loan finance charge does not exceed that
2 permitted by this section. If the loan is precomputed:
3 (a) the loan finance charge may be calculated on the assumption
4 that all scheduled payments will be made when due; and
5 (b) the effect of prepayment is governed by the provisions on
6 rebate upon prepayment in section 210 of this chapter.
7 (3) The following apply to a loan agreement for a consumer loan (or
8 for the refinancing or consolidation of a consumer loan) that is entered
9 into after June 30, 2020:
10 (a) The consumer loan is subject to this section, including the
11 limitations set forth in:
12 (i) subsection (1) with respect to the loan finance charge; and
13 (ii) subsection (9)(b) with respect to the amount of the
14 authorized nonrefundable prepaid finance charge, in the case
15 of a consumer loan that is not secured by an interest in land.
16 (b) The loan finance charge authorized by this section must be:
17 (i) contracted for between the lender and the debtor; and
18 (ii) calculated by applying a rate not exceeding the rate set
19 forth in subsection (1) to unpaid balances of the principal (as
20 defined in section 107(3) of this chapter).
21 (c) A loan agreement for a precomputed consumer loan is
22 prohibited.
23 (d) Subject to subsection (12), in addition to the loan finance
24 charge authorized by subsection (1) and to any other fees
25 permitted by this chapter, and not subject to the twenty-five
26 percent (25%) rate set forth in subsection (1), the lender may
27 contract for and receive as a condition for, or an incident to, the
28 extension of credit a nonrefundable prepaid finance charge under
29 subsection (9), whether the charge is:
30 (i) paid separately in cash or by check before or at
31 consummation; or
32 (ii) withheld from the proceeds of the consumer loan.
33 (4) For the purposes of this section, the term of a loan commences
34 with the date the loan is made. Differences in the lengths of months are
35 disregarded, and a day may be counted as one-thirtieth (1/30) of a
36 month. Subject to classifications and differentiations the lender may
37 reasonably establish, a part of a month in excess of fifteen (15) days
38 may be treated as a full month if periods of fifteen (15) days or less are
39 disregarded and if that procedure is not consistently used to obtain a
40 greater yield than would otherwise be permitted. For purposes of
41 computing average daily balances, the creditor may elect to treat all
42 months as consisting of thirty (30) days.
ES 383—LS 6690/DI 101 9
1 (5) With respect to a consumer loan made pursuant to a revolving
2 loan account:
3 (a) the loan finance charge shall be deemed not to exceed the
4 maximum annual percentage rate if the loan finance charge
5 contracted for and received does not exceed a charge in each
6 monthly billing cycle which is two and eighty-three thousandths
7 percent (2.083%) of an amount not greater than:
8 (i) the average daily balance of the debt;
9 (ii) the unpaid balance of the debt on the same day of the
10 billing cycle; or
11 (iii) subject to subsection (6), the median amount within a
12 specified range within which the average daily balance or the
13 unpaid balance of the debt, on the same day of the billing
14 cycle, is included; for the purposes of this clause and clause
15 (ii), a variation of not more than four (4) days from month to
16 month is "the same day of the billing cycle";
17 (b) if the billing cycle is not monthly, the loan finance charge
18 shall be deemed not to exceed the maximum annual percentage
19 rate if the loan finance charge contracted for and received does
20 not exceed a percentage which bears the same relation to
21 one-twelfth (1/12) the maximum annual percentage rate as the
22 number of days in the billing cycle bears to thirty (30); and
23 (c) notwithstanding subsection (1), if there is an unpaid balance
24 on the date as of which the loan finance charge is applied, the
25 lender may contract for and receive a charge not exceeding fifty
26 cents ($0.50) if the billing cycle is monthly or longer, or the pro
27 rata part of fifty cents ($0.50) which bears the same relation to
28 fifty cents ($0.50) as the number of days in the billing cycle bears
29 to thirty (30) if the billing cycle is shorter than monthly, but no
30 charge may be made pursuant to this subdivision if the lender has
31 made an annual charge for the same period as permitted by the
32 provisions on additional charges in section 202(1)(c) of this
33 chapter.
34 (6) Subject to classifications and differentiations the lender may
35 reasonably establish, the lender may make the same loan finance
36 charge on all amounts financed within a specified range. A loan finance
37 charge does not violate subsection (1) if:
38 (a) when applied to the median amount within each range, it does
39 not exceed the maximum permitted by subsection (1); and
40 (b) when applied to the lowest amount within each range, it does
41 not produce a rate of loan finance charge exceeding the rate
42 calculated according to subdivision (a) by more than eight percent
ES 383—LS 6690/DI 101 10
1 (8%) of the rate calculated according to subdivision (a).
2 (7) With respect to a consumer loan not made pursuant to a
3 revolving loan account, the lender may contract for and receive a
4 minimum loan finance charge of not more than thirty dollars ($30). The
5 minimum loan finance charge allowed under this subsection may be
6 imposed only if the lender does not contract for or receive a
7 nonrefundable prepaid finance charge under subsection (9) and:
8 (a) the debtor prepays in full a consumer loan, refinancing, or
9 consolidation, regardless of whether the loan, refinancing, or
10 consolidation is precomputed;
11 (b) the loan, refinancing, or consolidation prepaid by the debtor
12 is subject to a loan finance charge that:
13 (i) is contracted for by the parties; and
14 (ii) does not exceed the rate prescribed in subsection (1); and
15 (c) the loan finance charge earned at the time of prepayment is
16 less than the minimum loan finance charge contracted for under
17 this subsection.
18 (8) The amount of thirty dollars ($30) in subsection (7) is subject to
19 change under the provisions on adjustment of dollar amounts
20 (IC 24-4.5-1-106). However, notwithstanding IC 24-4.5-1-106(1), the
21 Reference Base Index to be used under this subsection is the Index for
22 October 1992.
23 (9) Except as provided in subsection (7), and subject to subsection
24 (12), in addition to the loan finance charge authorized by subsection (1)
25 and to any other charges and fees permitted by this chapter, a lender
26 may contract for and receive a nonrefundable prepaid finance charge
27 of not more than the following:
28 (a) In the case of a consumer loan that is secured by an interest in
29 land and that:
30 (i) is not made under a revolving loan account, two percent
31 (2%) of the loan amount; or
32 (ii) is made under a revolving loan account, two percent (2%)
33 of the line of credit.
34 (b) In the case of consumer loan that is not secured by an interest
35 in land, fifty dollars ($50) if the loan agreement is entered into
36 before July 1, 2020. If the loan agreement is entered into after
37 June 30, 2020, not more than the following:
38 (i) Seventy-five dollars ($75), in the case of a loan agreement
39 for a principal amount which is two thousand dollars ($2,000)
40 or less.
41 (ii) One hundred fifty dollars ($150) in the case of a loan
42 agreement for a principal amount which is more than two
ES 383—LS 6690/DI 101 11
1 thousand dollars ($2,000) but does not exceed four thousand
2 dollars ($4,000).
3 (iii) Two hundred dollars ($200) in the case of a loan
4 agreement for a principal amount which is more than four
5 thousand dollars ($4,000).
6 The amounts in this subsection are not subject to change under
7 IC 24-4.5-1-106.
8 (10) The nonrefundable prepaid finance charge provided for in
9 subsection (9) is not subject to refund or rebate. However, for any loan
10 entered into after June 30, 2020, any amount charged by the lender,
11 other than by a lender that is a depository institution (as defined in
12 IC 24-4.5-1-301.5(12)), under subsection (9) that exceeds the
13 applicable amount permitted by subsection (9)(b) constitutes a
14 violation of this article under IC 24-4.5-6-107.5(l) and is subject to
15 refund. Any amount charged by a depository institution (as defined in
16 IC 24-4.5-1-301.5(12)) under subsection (9) that exceeds the applicable
17 amount set forth in subsection (9)(b) is subject to refund.
18 (11) If the director determines that a lender's accrual method of
19 accounting as applied to a consumer loan under this section involves
20 the application of subterfuge for the purpose of circumventing this
21 chapter, the director may conform the loan finance charge and fees for
22 the transaction to the limitations set forth in this section and may
23 require a refund of overcharges under IC 24-4.5-6-106(2)(a). A
24 determination by the director under this subsection:
25 (a) must be in writing;
26 (b) shall be delivered to all parties in the transaction; and
27 (c) is subject to IC 4-21.5-3.
28 (12) At the time of consummation of a consumer loan:
29 (a) the loan finance charge authorized by subsection (1); and
30 (b) the nonrefundable prepaid finance charge authorized by
31 subsection (9) (including any amount charged by a depository
32 institution (as defined in IC 24-4.5-1-301.5(12)) that exceeds the
33 applicable amount set forth in subsection (9)(b));
34 are subject to IC 35-45-7 and, when combined, may not exceed the rate
35 set forth in IC 35-45-7-2.
36 (13) Notwithstanding subsections (9) and (10), in the case of a
37 consumer loan that is not secured by an interest in land, if a lender
38 retains any part of a nonrefundable prepaid finance charge charged on
39 a loan that is paid in full by a new loan from the same lender, the
40 following apply:
41 (a) If the loan is paid in full by the new loan within three (3)
42 months after the date of the prior loan, the lender may not charge
ES 383—LS 6690/DI 101 12
1 a nonrefundable prepaid finance charge on the new loan, or, in the
2 case of a revolving loan, on the increased credit line.
3 (b) The lender may not assess more than two (2) nonrefundable
4 prepaid finance charges in any twelve (12) month period.
5 (c) Subject to subdivisions (a) and (b), if a loan that is entered
6 into by a lender and a debtor before July 1, 2020, is paid in full by
7 a new loan from the same lender after June 30, 2020, the lender
8 may contract for and receive a nonrefundable prepaid finance
9 charge in the amount set forth in subsection (9)(b) for loan
10 agreements entered into after June 30, 2020.
11 (14) In the case of a consumer loan that is secured by an interest in
12 land, this section does not prohibit a lender from contracting for and
13 receiving a fee for preparing deeds, mortgages, reconveyances, and
14 similar documents under section 202(1)(d)(ii) of this chapter, in
15 addition to the nonrefundable prepaid finance charge provided for in
16 subsection (9).
17 SECTION 5. IC 24-4.5-3-202, AS AMENDED BY P.L.280-2019,
18 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
19 JULY 1, 2022]: Sec. 202. (1) In addition to the loan finance charge
20 permitted by this chapter, a lender may contract for and receive the
21 following additional charges in connection with a consumer loan:
22 (a) Official fees and taxes.
23 (b) Charges for insurance as described in subsection (2).
24 (c) Annual participation fees assessed in connection with a
25 revolving loan account. Annual participation fees must:
26 (i) be reasonable in amount;
27 (ii) bear a reasonable relationship to the lender's costs to
28 maintain and monitor the loan account; and
29 (iii) not be assessed for the purpose of circumvention or
30 evasion of this article, as determined by the department.
31 (d) With respect to a debt secured by an interest in land, the
32 following closing costs, if they are bona fide, reasonable in
33 amount, and not for the purpose of circumvention or evasion of
34 this article:
35 (i) Fees for title examination, abstract of title, title insurance,
36 property surveys, or similar purposes.
37 (ii) Fees for preparing deeds, mortgages, and reconveyance,
38 settlement, and similar documents.
39 (iii) Notary and credit report fees.
40 (iv) Amounts required to be paid into escrow or trustee
41 accounts if the amounts would not otherwise be included in
42 the loan finance charge.
ES 383—LS 6690/DI 101 13
1 (v) Appraisal fees.
2 (e) Notwithstanding provisions of the Consumer Credit Protection
3 Act (15 U.S.C. 1601 et seq.) concerning disclosure, charges for
4 other benefits, including insurance, conferred on the debtor, if the
5 benefits are of value to the debtor and if the charges are
6 reasonable in relation to the benefits, and are excluded as
7 permissible additional charges from the loan finance charge. With
8 respect to any other additional charge not specifically provided
9 for in this section to be a permitted charge under this subsection,
10 the creditor must submit a written explanation of the charge to the
11 department indicating how the charge would be assessed and the
12 value or benefit to the debtor. Supporting documents may be
13 required by the department. The department shall determine
14 whether the charge would be of benefit to the debtor and is
15 reasonable in relation to the benefits.
16 (f) A charge not to exceed twenty-five dollars ($25) for each
17 returned payment by a bank or other depository institution of a
18 dishonored check, electronic funds transfer, negotiable order of
19 withdrawal, or share draft issued by the debtor.
20 (g) With respect to a revolving loan account, a fee not to exceed
21 twenty-five dollars ($25) in each billing cycle during which the
22 balance due under the revolving loan account exceeds by more
23 than one hundred dollars ($100) the maximum credit limit for the
24 account established by the lender.
25 (h) With respect to a revolving loan account, a transaction fee that
26 may not exceed the greater of the following:
27 (i) Two percent (2%) of the amount of the transaction.
28 (ii) Ten dollars ($10).
29 (i) A charge not to exceed twenty-five dollars ($25) for a
30 skip-a-payment service, subject to the following:
31 (i) At the time of use of the service, the consumer must be
32 given written notice of the amount of the charge and must
33 acknowledge the amount in writing, including by electronic
34 signature.
35 (ii) A charge for a skip-a-payment service may not be assessed
36 with respect to a consumer loan subject to the provisions on
37 rebate upon prepayment that are set forth in section 210 of this
38 chapter.
39 (iii) A charge for a skip-a-payment service may not be
40 assessed with respect to any payment for which a delinquency
41 charge has been assessed under section 203.5 of this chapter.
42 (j) A charge not to exceed ten dollars ($10) for an optional
ES 383—LS 6690/DI 101 14
1 expedited payment service, subject to the following:
2 (i) The charge may be assessed only upon request by the
3 consumer to use the expedited payment service.
4 (ii) The amount of the charge must be disclosed to the
5 consumer at the time of the consumer's request to use the
6 expedited payment service.
7 (iii) The consumer must be informed that the consumer retains
8 the option to make a payment by traditional means.
9 (iv) The charge may not be established in advance, through
10 any agreement with the consumer, as the expected method of
11 payment.
12 (v) The charge may not be assessed with respect to any
13 payment for which a delinquency charge has been assessed
14 under section 203.5 of this chapter.
15 (k) A charge for a GAP agreement, subject to subsection (3).
16 (l) With respect to consumer loans made by a person exempt from
17 licensing under IC 24-4.5-3-502(1), a charge for a debt
18 cancellation agreement, subject to the following:
19 (i) A debt cancellation agreement or debt cancellation
20 coverage may not be required by the lender, and that fact must
21 be disclosed in writing to the consumer.
22 (ii) The charge for the initial term of coverage under the debt
23 cancellation agreement must be disclosed in writing to the
24 consumer. The charge may be disclosed on a unit-cost basis
25 only in the case of revolving loan accounts, closed-end credit
26 transactions if the request for coverage is made by mail or
27 telephone, and closed-end credit transactions if the debt
28 cancellation agreement limits the total amount of indebtedness
29 eligible for coverage.
30 (iii) If the term of coverage under the debt cancellation
31 agreement is less than the term of the consumer loan, the term
32 of coverage under the debt cancellation agreement must be
33 disclosed in writing to the consumer.
34 (iv) The consumer must sign or initial an affirmative written
35 request for coverage after receiving all required disclosures.
36 (v) If debt cancellation coverage for two (2) or more events is
37 provided for in a single charge under a debt cancellation
38 agreement, the entire charge may be excluded from the loan
39 finance charge and imposed as an additional charge under this
40 section if at least one (1) of the events is the loss of life, health,
41 or income.
42 The additional charges provided for in subdivisions (f) through (j) are
ES 383—LS 6690/DI 101 15
1 not subject to refund or rebate.
2 (2) An additional charge may be made for insurance in connection
3 with the loan, other than insurance protecting the lender against the
4 debtor's default or other credit loss:
5 (a) with respect to insurance against loss of or damage to property
6 or against liability, if the lender furnishes a clear and specific
7 statement in writing to the debtor, setting forth the cost of the
8 insurance if obtained from or through the lender and stating that
9 the debtor may choose the person, subject to the lender's
10 reasonable approval, through whom the insurance is to be
11 obtained; and
12 (b) with respect to consumer credit insurance providing life,
13 accident, unemployment or other loss of income, or health
14 coverage, if the insurance coverage is not a factor in the approval
15 by the lender of the extension of credit and this fact is clearly
16 disclosed in writing to the debtor, and if, in order to obtain the
17 insurance in connection with the extension of credit, the debtor
18 gives specific affirmative written indication of the desire to do so
19 after written disclosure of the cost of the insurance.
20 (3) An additional charge may be made for a GAP agreement, subject
21 to the following:
22 (a) A GAP agreement or GAP coverage may not be required by
23 the lender, and that fact must be disclosed in writing to the
24 consumer.
25 (b) The charge for the initial term of coverage under the GAP
26 agreement must be disclosed in writing to the consumer. The
27 charge may be disclosed on a unit-cost basis only in the case of
28 the following transactions:
29 (i) Revolving loan accounts.
30 (ii) Closed-end credit transactions, if the request for coverage
31 is made by mail or telephone.
32 (iii) Closed-end credit transactions, if the GAP agreement
33 limits the total amount of indebtedness eligible for coverage.
34 (c) If the term of coverage under the GAP agreement is less than
35 the term of the consumer loan, the term of coverage under the
36 GAP agreement must be disclosed in writing to the consumer.
37 (d) The consumer must sign or initial an affirmative written
38 request for coverage after receiving all required disclosures.
39 (e) The GAP agreement must include the following:
40 (i) In the case of GAP coverage for a new motor vehicle, the
41 manufacturer's suggested retail price (MSRP) for the motor
42 vehicle.
ES 383—LS 6690/DI 101 16
1 (ii) In the case of GAP coverage for a used motor vehicle, the
2 National Automobile Dealers Association (NADA) average
3 retail value for the motor vehicle, as determined by use of a
4 third party valuation service provider that is customarily
5 relied upon in the used motor vehicle commercial
6 marketplace.
7 (iii) The name of the financing entity taking assignment of the
8 agreement, as applicable.
9 (iv) The name and address of the consumer.
10 (v) The name of the lender selling the agreement.
11 (vi) Information advising the consumer that the consumer may
12 be able to obtain similar coverage from the consumer's primary
13 insurance carrier.
14 (vii) A coverage provision that includes a minimum deductible
15 of five hundred dollars ($500).
16 (viii) A provision providing for a minimum thirty (30) day trial
17 period.
18 (ix) In the case of a consumer loan made with respect to a
19 motor vehicle, a provision excluding the sale of GAP coverage
20 if the amount financed under the consumer loan (not including
21 the cost of the GAP agreement, the cost of any credit
22 insurance, and the cost of any warranties or service
23 agreements) is less than eighty percent (80%) of the
24 manufacturer's suggested retail price (MSRP), in the case of a
25 new motor vehicle, or of the National Automobile Dealers
26 Association (NADA) average retail value (as determined by
27 use of a third party valuation service provider that is
28 customarily relied upon in the used motor vehicle
29 commercial marketplace), in the case of a used motor
30 vehicle.
31 (x) In the case of a GAP agreement in which the charge for the
32 agreement exceeds four hundred dollars ($400), specific
33 instructions that may be used by the consumer to cancel the
34 agreement and obtain a refund of the unearned GAP charge
35 before prepayment in full, in accordance with the procedures,
36 and subject to the conditions, set forth in subdivision (f).
37 (f) If the charge for the GAP agreement exceeds four hundred
38 dollars ($400), the consumer is entitled to cancel the agreement
39 and obtain a refund of the unearned GAP charge before
40 prepayment in full. Refunds of unearned GAP charges shall be
41 made subject to the following conditions:
42 (i) A refund of the charge for a GAP agreement must be
ES 383—LS 6690/DI 101 17
1 calculated using a method that is no less favorable to the
2 consumer than a refund calculated on a pro rata basis.
3 (ii) The consumer is entitled to a refund of the unearned GAP
4 agreement charge as outlined in the GAP agreement.
5 (iii) The seller of the GAP agreement, or the seller's assignee,
6 is responsible for making a timely refund to the consumer of
7 unearned GAP agreement charges under the terms and
8 conditions of the GAP agreement.
9 (g) Upon prepayment in full of the consumer loan:
10 (i) the GAP coverage is automatically terminated; and
11 (ii) the seller of the GAP agreement must issue a refund in
12 accordance with subdivision (f).
13 (h) A lender that sells GAP agreements must:
14 (i) insure its GAP agreement obligations under a contractual
15 liability insurance policy issued by an insurer authorized to
16 engage in the insurance business in Indiana; and
17 (ii) retain appropriate records, as required under this article,
18 regarding GAP agreements sold, refunded, and expired.
19 (4) As used in this section, "debt cancellation agreement" means an
20 agreement that provides coverage for payment or satisfaction of all or
21 part of a debt in the event of the loss of life, health, or income. The
22 term does not include a GAP agreement.
23 (5) As used in this section, "expedited payment service" means a
24 service offered to a consumer to ensure that a payment made by the
25 consumer with respect to a consumer loan will be reflected as paid and
26 posted on an expedited basis.
27 (6) As used in this section:
28 (a) "guaranteed asset protection agreement";
29 (b) "guaranteed auto protection agreement"; or
30 (c) "GAP agreement";
31 means, with respect to consumer loans involving motor vehicles or
32 other titled assets, an agreement in which the lender agrees to cancel
33 or waive all or part of the outstanding debt after all property insurance
34 benefits have been exhausted after the occurrence of a specified event.
35 (7) As used in this section, "skip-a-payment service" means a
36 service that:
37 (a) is offered by a lender to a consumer; and
38 (b) permits the consumer to miss or skip a payment due under a
39 consumer loan without resulting in default.
40 SECTION 6. IC 24-4.5-3-508, AS AMENDED BY P.L.85-2020,
41 SECTION 16, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
42 UPON PASSAGE]: Sec. 508. Loan Finance Charge for Supervised
ES 383—LS 6690/DI 101 18
1 Loans ) (1) With respect to a supervised loan, including a loan
2 pursuant to a revolving loan account, a supervised lender may contract
3 for and receive a loan finance charge not exceeding that permitted by
4 this section.
5 (2) The loan finance charge, calculated according to the actuarial
6 method, may not exceed the equivalent of the greater of:
7 (a) the total of:
8 (i) thirty-six percent (36%) per year on that part of the unpaid
9 balances of the principal (as defined in section 107(3) of this
10 chapter) which is two thousand dollars ($2,000) or less;
11 (ii) twenty-one percent (21%) per year on that part of the
12 unpaid balances of the principal (as defined in section 107(3)
13 of this chapter) which is more than two thousand dollars
14 ($2,000) but does not exceed four thousand dollars ($4,000);
15 and
16 (iii) fifteen percent (15%) per year on that part of the unpaid
17 balances of the principal (as defined in section 107(3) of this
18 chapter) which is more than four thousand dollars ($4,000); or
19 (b) twenty-five percent (25%) per year on the unpaid balances of
20 the principal (as defined in section 107(3) of this chapter).
21 (3) In the case of a loan agreement entered into before July 1, 2020,
22 this section does not limit or restrict the manner of contracting for the
23 loan finance charge, whether by way of add-on, discount, or otherwise,
24 so long as the rate of the loan finance charge does not exceed that
25 permitted by this section. If the loan is precomputed:
26 (a) the loan finance charge may be calculated on the assumption
27 that all scheduled payments will be made when due; and
28 (b) the effect of prepayment is governed by the provisions on
29 rebate upon prepayment in section 210 of this chapter.
30 After June 30, 2020, a loan agreement may not be entered into for a
31 precomputed supervised loan. The loan finance charge authorized by
32 this section must be contracted for between the lender and the
33 debtor, and must be calculated by applying a rate not exceeding the
34 rate set forth in subsection (2) to unpaid balances of the principal
35 (as defined in section 107(3) of this chapter).
36 (4) The term of a loan for the purposes of this section commences
37 on the date the loan is made. Differences in the lengths of months are
38 disregarded, and a day may be counted as one-thirtieth (1/30) of a
39 month. Subject to classifications and differentiations the lender may
40 reasonably establish, a part of a month in excess of fifteen (15) days
41 may be treated as a full month if periods of fifteen (15) days or less are
42 disregarded and that procedure is not consistently used to obtain a
ES 383—LS 6690/DI 101 19
1 greater yield than would otherwise be permitted.
2 (5) Subject to classifications and differentiations the lender may
3 reasonably establish, the lender may make the same loan finance
4 charge on all principal amounts within a specified range. A loan
5 finance charge does not violate subsection (2) if:
6 (a) when applied to the median amount within each range, it does
7 not exceed the maximum permitted in subsection (2); and
8 (b) when applied to the lowest amount within each range, it does
9 not produce a rate of loan finance charge exceeding the rate
10 calculated according to subdivision (a) by more than eight percent
11 (8%) of the rate calculated according to subdivision (a).
12 (6) The amounts of two thousand dollars ($2,000) and four thousand
13 dollars ($4,000) in subsection (2) and thirty dollars ($30) in subsection
14 (7) are subject to change pursuant to the provisions on adjustment of
15 dollar amounts (IC 24-4.5-1-106). However, notwithstanding
16 IC 24-4.5-1-106(1), for the adjustment of the amount of thirty dollars
17 ($30), the Reference Base Index to be used is the Index for October
18 1992. Notwithstanding IC 24-4.5-1-106(1), for the adjustment of the
19 amounts of two thousand dollars ($2,000) and four thousand dollars
20 ($4,000), the Reference Base Index to be used is the Index for October
21 2012.
22 (7) With respect to a supervised loan not made pursuant to a
23 revolving loan account, the lender may contract for and receive a
24 minimum loan finance charge of not more than thirty dollars ($30). The
25 minimum loan finance charge allowed under this subsection may be
26 imposed only if the lender does not assess a nonrefundable prepaid
27 finance charge under subsection (8) and:
28 (a) the debtor prepays in full a consumer loan, refinancing, or
29 consolidation, regardless of whether the loan, refinancing, or
30 consolidation is precomputed;
31 (b) the loan, refinancing, or consolidation prepaid by the debtor
32 is subject to a loan finance charge that:
33 (i) is contracted for by the parties; and
34 (ii) does not exceed the rate prescribed in subsection (2); and
35 (c) the loan finance charge earned at the time of prepayment is
36 less than the minimum loan finance charge contracted for under
37 this subsection.
38 (8) Except as provided in subsections (7) and (10)(c), in addition to
39 the loan finance charge provided for in this section and to any other
40 charges and fees permitted by this chapter, the lender may contract for
41 and receive a nonrefundable prepaid finance charge of not more than
42 fifty dollars ($50) if the loan agreement is entered into before July 1,
ES 383—LS 6690/DI 101 20
1 2020. If the loan agreement is entered into after June 30, 2020, not
2 more than the following:
3 (a) Seventy-five dollars ($75), in the case of a loan agreement for
4 a principal amount which is two thousand dollars ($2,000) or less.
5 (b) One hundred fifty dollars ($150) in the case of a loan
6 agreement for a principal amount which is more than two
7 thousand dollars ($2,000) but does not exceed four thousand
8 dollars ($4,000).
9 (c) Two hundred dollars ($200) in the case of a loan agreement
10 for a principal amount which is more than four thousand dollars
11 ($4,000).
12 The amounts in this subsection are not subject to change under
13 IC 24-4.5-1-106.
14 (9) The nonrefundable prepaid finance charge provided for in
15 subsection (8) is not subject to refund or rebate. However, for any
16 supervised loan entered into after June 30, 2020, any amount charged
17 by the lender, other than by a lender that is a depository institution (as
18 defined in IC 24-4.5-1-301.5(12)), under subsection (8) that exceeds
19 the applicable amount permitted by subsection (8) constitutes a
20 violation of this article under IC 24-4.5-6-107.5(l) and is subject to
21 refund. Any amount charged by a depository institution (as defined in
22 IC 24-4.5-1-301.5(12)) under subsection (8) that exceeds the applicable
23 amount set forth in subsection (8) is subject to refund.
24 (10) Notwithstanding subsections (8) and (9), in the case of a
25 supervised loan that is not secured by an interest in land, if a lender
26 retains any part of a nonrefundable prepaid finance charge charged on
27 a loan that is paid in full by a new loan from the same lender, the
28 following apply:
29 (a) If the loan is paid in full by the new loan within three (3)
30 months after the date of the prior loan, the lender may not charge
31 a nonrefundable prepaid finance charge on the new loan, or, in the
32 case of a revolving loan, on the increased credit line.
33 (b) The lender may not assess more than two (2) nonrefundable
34 prepaid finance charges in any twelve (12) month period.
35 (c) Subject to subdivisions (a) and (b), if a supervised loan that is
36 entered into by a lender and a debtor before July 1, 2020, is paid
37 in full by a new loan from the same lender after June 30, 2020, the
38 lender may contract for and receive a nonrefundable prepaid
39 finance charge in the amount set forth in subsection (8) for loan
40 agreements entered into after June 30, 2020.
41 (11) In the case of a supervised loan that is secured by an interest in
42 land, this section does not prohibit a lender from contracting for and
ES 383—LS 6690/DI 101 21
1 receiving a fee for preparing deeds, mortgages, reconveyances, and
2 similar documents under section 202(1)(d)(ii) of this chapter, in
3 addition to the nonrefundable prepaid finance charge provided for in
4 subsection (8).
5 SECTION 7. IC 24-7-3-3, AS AMENDED BY P.L.69-2018,
6 SECTION 32, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
7 JULY 1, 2022]: Sec. 3. The lessor shall disclose the following:
8 (1) A brief description of the property sufficient to identify the
9 property to the lessee and lessor.
10 (2) The total number, total amount, and timing of all rental
11 payments necessary to acquire ownership of the property,
12 including:
13 (A) any initial payment, less any:
14 (i) optional liability waiver fees under IC 24-7-5-11; and
15 (ii) optional products and services offered
16 contemporaneously with the rental purchase agreement
17 under IC 24-7-8-6; and
18 (iii) security deposit, if required;
19 (B) all regular rental payments; and
20 (C) taxes paid to or through the lessor.
21 (3) A statement that the lessee will not own the property until the
22 lessee has:
23 (A) made all regular rental payments, as well as any initial
24 rental payment, necessary to acquire ownership of the
25 property; or
26 (B) exercised an early purchase option.
27 (4) A statement that charges in addition to the total rental
28 payments necessary to acquire ownership of the leased property
29 may be imposed under the agreement and that the lessee should
30 read the contract for an explanation of these charges.
31 (5) A brief explanation of all additional charges that may be
32 imposed under the agreement. If a security deposit is required, the
33 explanation must include an explanation of the conditions under
34 which the deposit will be returned to the lessee.
35 (6) A statement indicating who is responsible for property if it is
36 lost, stolen, damaged, or destroyed.
37 (7) A statement indicating that the value of lost, stolen, damaged,
38 or destroyed property is its fair market value on the date that it is
39 lost, stolen, damaged, or destroyed.
40 (8) A statement indicating whether the property is new or used.
41 However, property that is new may be described as used.
42 (9) A statement that the lessee has an early purchase option to
ES 383—LS 6690/DI 101 22
1 purchase the property at any time during the period that the rental
2 purchase agreement is in effect. The statement must specify the
3 price or the formula or other method for determining the price at
4 which the property may be purchased.
5 (10) A brief explanation of the lessee's right to reinstate a rental
6 purchase agreement and a description of the amount, or method
7 of determining the amount, of any penalty or other charge
8 applicable under IC 24-7-5 to the reinstatement of a rental
9 purchase agreement.
10 (11) An itemization of all charges and fees included in any initial
11 rental payment.
12 SECTION 8. IC 24-7-7-1, AS AMENDED BY P.L.69-2018,
13 SECTION 43, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
14 JULY 1, 2022]: Sec. 1. (a) The department shall enforce this article. To
15 carry out this responsibility, the department may do the following:
16 (1) Receive and act on complaints, take action designed to obtain
17 voluntary compliance with this article, or commence proceedings
18 on the department's own initiative.
19 (2) Issue and enforce administrative orders under IC 4-21.5.
20 (3) Counsel persons and groups on their rights and duties under
21 this article.
22 (4) Establish programs for the education of consumers with
23 respect to rental purchase agreement practices and problems.
24 (5) Make studies appropriate to effectuate the purposes and
25 policies of this article and make the results available to the public.
26 (6) Adopt rules under IC 4-22-2, including emergency rules under
27 IC 4-22-2-37.1, to carry out this article.
28 (7) Maintain more than one (1) office within Indiana.
29 (8) Bring a civil action to restrain a person from violating this
30 article and for other appropriate relief, and exercise the same
31 enforcement powers provided under IC 24-4.5-6-108.
32 (9) Require a lessor to refund to the lessee any overcharges
33 resulting from the lessor's noncompliance with:
34 (A) the terms of a rental purchase agreement; or
35 (B) this article, or any order or rule issued or adopted by
36 the department under this article.
37 (b) If the department determines, after notice and an opportunity to
38 be heard, that a person has violated this article, or any order or rule
39 issued or adopted by the department under this article, the
40 department may, in addition to or instead of all other remedies
41 available under this section, impose upon the person a civil penalty not
42 greater than ten thousand dollars ($10,000) per violation.
ES 383—LS 6690/DI 101 23
1 SECTION 9. IC 28-1-2-30, AS AMENDED BY P.L.136-2018,
2 SECTION 205, IS AMENDED TO READ AS FOLLOWS
3 [EFFECTIVE UPON PASSAGE]: Sec. 30. (a) As used in this section,
4 "financial institution" means any bank, trust company, corporate
5 fiduciary, savings association, credit union, savings bank, bank of
6 discount and deposit, or industrial loan and investment company
7 organized or reorganized under the laws of this state, and includes
8 licensees and registrants under IC 24-4.4, IC 24-4.5, IC 24-7,
9 IC 24-12, IC 28-1-29, IC 28-7-5, IC 28-8-4, IC 28-8-5, and 750
10 IAC 9.
11 (b) Except as otherwise provided, a member of the department or
12 the director or deputy, assistant, or any other person having access to
13 any such information may not disclose to any person, other than
14 officially to the department, by the report made to it, or to the board of
15 directors, partners, or owners, or in compliance with the order of a
16 court, the names of the depositors or shareholders in any financial
17 institution, or the amount of money on deposit in any financial
18 institution at any time in favor of any depositor, or any other
19 information concerning the affairs of any such financial institution.
20 SECTION 10. IC 28-7-1-31, AS AMENDED BY P.L.35-2010,
21 SECTION 167, IS AMENDED TO READ AS FOLLOWS
22 [EFFECTIVE JULY 1, 2022]: Sec. 31. Every credit union shall make
23 provisions for adequate fidelity coverage for all directors, officers, and
24 employees having access to money or bonds of the credit union. The
25 amount and form of fidelity coverage must be approved annually by
26 the board of directors of the credit union. Coverage may be provided:
27 (1) in the form of a blanket fidelity bond issued by a corporate
28 surety authorized to transact business in Indiana; or
29 (2) through the establishment of a separate reserve fund within
30 the credit union for that purpose.
31 SECTION 11. IC 28-8-4-15, AS AMENDED BY P.L.129-2020,
32 SECTION 19, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
33 JULY 1, 2022]: Sec. 15. (a) As used in this chapter, "payment
34 instrument" means:
35 (1) a check;
36 (2) a draft;
37 (3) a money order;
38 (4) a traveler's check;
39 (5) a stored value card, or stored value account, other than a
40 closed system stored value card; or
41 (6) an instrument or written order for the transmission or payment
42 of money;
ES 383—LS 6690/DI 101 24
1 sold or issued to one (1) or more persons, whether such instrument is
2 negotiable.
3 (b) As used in this chapter, "payment instrument" does not include:
4 (1) a credit card voucher;
5 (2) a letter of credit;
6 (3) an instrument that is redeemable by the issuer in goods or
7 services; or
8 (4) a closed system stored value card.
9 SECTION 12. IC 28-8-4-19.5, AS AMENDED BY P.L.32-2021,
10 SECTION 86, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
11 JULY 1, 2022]: Sec. 19.5. As used in this chapter, "stored value
12 account" or "stored value card" means any account, a card or device
13 that:
14 (1) may be used by a holder to:
15 (A) perform financial transactions; or
16 (B) obtain, purchase, or receive money, goods, or services;
17 in an amount or having a value that does not exceed the dollar
18 value of the account, card; or device; and
19 (2) either:
20 (A) in the case of a card or similar device, has a magnetic
21 stripe or computer chip that enables dollar values to be
22 electronically added to or deducted from the dollar value of the
23 card. or
24 (B) in the case of an account, uses an account number unique
25 to the holder for the purposes set forth in subdivision (1).
26 SECTION 13. IC 28-10-1-1, AS AMENDED BY P.L.54-2021,
27 SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
28 JULY 1, 2022]: Sec. 1. A reference to a federal law or federal
29 regulation in this title is a reference to the law or regulation as in effect
30 December 31, 2020. 2021.
31 SECTION 14. IC 28-15-1-11 IS AMENDED TO READ AS
32 FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 11. "Savings
33 association" means any:
34 (1) building and loan association;
35 (2) savings and loan association;
36 (3) rural loan and savings association; or
37 (4) guaranty loan and savings association;
38 organized or reorganized and operating under the laws of Indiana, any
39 other state, or the United States, whether in stock or mutual form.
40 SECTION 15. IC 28-15-10-3 IS AMENDED TO READ AS
41 FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 3. As used in this
42 chapter, "Indiana savings association" means:
ES 383—LS 6690/DI 101 25
1 (1) a savings association whose home office is located in Indiana;
2 or
3 (2) a federal savings and loan association whose home office is
4 located in Indiana.
5 SECTION 16. IC 28-15-14-1, AS AMENDED BY P.L.27-2012,
6 SECTION 118, IS AMENDED TO READ AS FOLLOWS
7 [EFFECTIVE UPON PASSAGE]: Sec. 1. (a) A savings association
8 may be:
9 (1) merged or consolidated with; or
10 (2) converted into;
11 a federal savings and loan association, under the charter of the federal
12 savings and loan association or under a new charter issued to the
13 converted association or the merged or consolidated association, upon
14 a vote of fifty-one percent (51%) or more of the votes cast at a legal
15 meeting of the shareholders and members of the state chartered savings
16 association called to consider the proposed merger, consolidation, or
17 conversion.
18 (b) A merger, consolidation, or conversion under this section must
19 be accomplished:
20 (1) in compliance with the laws of the United States relating to
21 the merger, consolidation, or conversion; and
22 (2) upon terms and conditions prescribed or approved by the
23 Office of the Comptroller of the Currency or its successor.
24 SECTION 17. IC 28-15-14-2 IS AMENDED TO READ AS
25 FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 2. (a) If a savings
26 association:
27 (1) merges with;
28 (2) consolidates with; or
29 (3) is converted into;
30 a federal savings and loan association, the savings association shall file
31 with the secretary of state three (3) copies of a certificate executed by
32 a duly constituted federal authority showing the merger, consolidation,
33 or conversion.
34 (b) Upon the payment of the fees prescribed by law, the secretary of
35 state shall:
36 (1) note the filing upon each of the copies;
37 (2) retain one (1) copy in the secretary's office; and
38 (3) return two (2) copies to the association.
39 (c) One (1) of the copies returned to a savings association under
40 subsection (b) shall be filed by the savings association with the
41 department and the other copy shall be filed with the recorder of the
42 county in which the principal office of the savings association is
ES 383—LS 6690/DI 101 26
1 located.
2 (d) Upon completion of the filings required by this section, the
3 savings association ceases to be a corporation under Indiana law,
4 except as provided in section 4 of this chapter.
5 SECTION 18. IC 28-15-14-3 IS AMENDED TO READ AS
6 FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 3. (a) Upon the
7 effective date of a merger, consolidation, or conversion under sections
8 1 and 2 of this chapter, all of the assets and property of the state
9 chartered savings association of every kind and character, including:
10 (1) real, personal, and mixed property;
11 (2) tangible and intangible property; and
12 (3) choses in action, rights, and credits that:
13 (A) the savings association owns; or
14 (B) would inure to the savings association;
15 shall immediately, by operation of law and without any conveyance or
16 transfer, and without any further act or deed, be vested in and become
17 the property of the federal savings and loan association.
18 (b) A federal savings and loan association referred to in subsection
19 (a) shall have, hold, and enjoy the assets and property of the state
20 chartered savings association after a merger, consolidation, or
21 conversion under sections 1 and 2 of this chapter in its own right, as
22 fully and to the same extent that the assets and property were
23 possessed, held, and enjoyed by the state chartered savings association
24 before the merger, consolidation, or conversion.
25 (c) After a merger, consolidation, or conversion under sections 1
26 and 2 of this chapter, the federal savings and loan association is
27 considered a continuation of the entity and identity of the state
28 chartered savings association, and all of the rights and obligations of
29 the savings association remain unimpaired.
30 (d) The federal association, at the time of the taking effect of the
31 merger, consolidation, or conversion under sections 1 and 2 of this
32 chapter, shall succeed to all of the rights and obligations and the duties
33 and liabilities connected with the state chartered savings association.
34 SECTION 19. IC 28-15-14-4, AS AMENDED BY P.L.27-2012,
35 SECTION 119, IS AMENDED TO READ AS FOLLOWS
36 [EFFECTIVE UPON PASSAGE]: Sec. 4. (a) Subject to regulations
37 prescribed by the Office of the Comptroller of the Currency or its
38 successor, a federal savings and loan association located in Indiana or
39 in any other state, by resolution approved by its board of directors and
40 adopted by a vote of fifty-one percent (51%) or more of the votes cast
41 at any annual meeting or at any special meeting of its members called
42 to consider the action, may convert itself into a state chartered savings
ES 383—LS 6690/DI 101 27
1 association under this article.
2 (b) A resolution referred to in subsection (a), when adopted by the
3 members of a federal savings and loan association, must:
4 (1) designate the names and the number of the directors who will
5 serve as directors of the savings association after the conversion
6 takes effect; and
7 (2) authorize the directors to execute articles of incorporation.
8 (c) The articles of incorporation executed under this section must
9 include the contents required by IC 28-12-2-1 except that, instead of
10 disclosing the name and address of each incorporator as required by
11 IC 28-12-2-1(4), the articles must:
12 (1) indicate that the savings association is incorporated by
13 conversion of a federal savings and loan association into a state
14 chartered savings association; and
15 (2) state the name of the federal savings and loan association
16 converted under this section.
17 (d) The department must receive from the federal savings and loan
18 association:
19 (1) three (3) copies of the resolution, certified by the secretary or
20 assistant secretary of the federal savings and loan association; and
21 (2) the articles of incorporation, in triplicate, signed and
22 acknowledged by the directors designated under subsection
23 (b)(1).
24 (e) The department shall approve or disapprove the proposed
25 conversion of a federal savings and loan association into a state
26 chartered savings association under this section. The department may
27 not approve a proposed conversion unless the department, after
28 appropriate investigation or examination, finds all of the following:
29 (1) That the state chartered savings association resulting from the
30 conversion will operate in a safe, sound, and prudent manner.
31 (2) That the proposed charter conversion will not result in a state
32 chartered savings association that has:
33 (A) inadequate capital;
34 (B) unsatisfactory management; or
35 (C) poor earnings prospects.
36 (3) That the management or other principals of the savings
37 association are qualified by character and financial responsibility
38 to control and operate in a legal and proper manner the proposed
39 state chartered savings association.
40 (4) That the interests of the depositors, the creditors, and the
41 public generally will not be jeopardized by the proposed charter
42 conversion.
ES 383—LS 6690/DI 101 28
1 (f) If the department approves the resolution and articles of
2 incorporation submitted under subsection (d), the department shall:
3 (1) indicate its approval on the resolution and articles of
4 incorporation in the manner prescribed by IC 28-12-5-1; and
5 (2) present the articles of incorporation to the secretary of state.
6 (g) If the secretary of state finds that the articles of incorporation
7 conform to law, the secretary of state shall:
8 (1) endorse the secretary's approval on the copies of the articles
9 of incorporation;
10 (2) when all fees required by law have been paid:
11 (A) file one (1) copy of the articles of incorporation in the
12 secretary's office; and
13 (B) issue a certificate of incorporation to the savings
14 association; and
15 (3) return the certificate of incorporation and two (2) copies of the
16 articles of incorporation to the directors of the savings association
17 designated under subsection (b)(1).
18 (h) The conversion of a federal savings and loan association into a
19 state chartered savings association under this section is effective when
20 the secretary of state issues the certificate of incorporation under
21 subsection (g). However, before the savings association may transact
22 business under this article or incur indebtedness, except indebtedness
23 that is incidental to its organization, one (1) of the copies of its articles
24 of incorporation bearing the endorsement of the approval of the
25 department and of the secretary of state must be filed for record with
26 the recorder of the county in which the principal office of the savings
27 association is located.
28 SECTION 20. IC 28-15-14-5 IS AMENDED TO READ AS
29 FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 5. (a) Upon the
30 effective date of the conversion of a federal savings and loan
31 association into a state chartered savings association under section 4 of
32 this chapter, all of the assets and property of the federal savings and
33 loan association of every kind and character, including:
34 (1) real, personal, and mixed property;
35 (2) tangible and intangible property; and
36 (3) choses in action, rights, and credits that:
37 (A) the savings and loan association owns; or
38 (B) would inure to the savings and loan association;
39 shall immediately, by operation of law and without any conveyance or
40 transfer, and without any further act or deed, be vested in and become
41 the property of the state chartered savings association.
42 (b) After the conversion of a federal savings and loan association
ES 383—LS 6690/DI 101 29
1 into a state chartered savings association under section 4 of this
2 chapter:
3 (1) the state chartered savings association shall have, hold, and
4 enjoy the assets and property of the federal savings and loan
5 association in its own right, as fully and to the same extent that
6 the assets and property were possessed, held, and enjoyed by the
7 federal savings and loan association before the conversion; and
8 (2) the state chartered savings association is considered a
9 continuation of the entity and identity of the federal savings and
10 loan association, and all of the rights and obligations of the
11 federal savings and loan association remain unimpaired.
12 (c) When the conversion of a federal savings and loan association
13 into a state chartered savings association under section 4 of this chapter
14 takes effect, the state chartered savings association succeeds to all of
15 the rights and obligations and the duties and liabilities connected with
16 the federal savings and loan association.
17 SECTION 21. IC 28-15-14-6 IS AMENDED TO READ AS
18 FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 6. After the
19 conversion of a federal savings and loan association into a state
20 chartered savings association under section 4 of this chapter, the
21 organization of the savings association shall be completed in the
22 manner provided by IC 28-12, except that bylaws for the savings
23 association:
24 (1) may be adopted by the members of the federal association
25 when the members adopt the resolution authorizing the
26 conversion; and
27 (2) may become effective upon the issuance of the certificate of
28 incorporation under section 4(f) 4(g) of this chapter.
29 SECTION 22. An emergency is declared for this act.
ES 383—LS 6690/DI 101 30
COMMITTEE REPORT
Madam President: The Senate Committee on Insurance and
Financial Institutions, to which was referred Senate Bill No. 383, has
had the same under consideration and begs leave to report the same
back to the Senate with the recommendation that said bill DO PASS.
(Reference is to SB 383 as introduced.)
ZAY, Chairperson
Committee Vote: Yeas 9, Nays 0
_____
SENATE MOTION
Madam President: I move that Senate Bill 383 be amended to read
as follows:
Page 1, delete line 15.
Delete page 2.
Page 3, delete lines 1 through 32.
Page 22, delete lines 38 through 42.
Delete page 23.
Page 24, delete lines 1 through 27.
Page 25, delete lines 35 through 42.
Delete page 26.
Page 27, delete lines 32 through 42.
Delete page 28.
Page 29, delete lines 1 through 22.
Page 29, delete line 42.
Delete page 30.
Page 31, delete lines 1 through 31.
Delete page 32.
Page 33, delete lines 1 through 32.
Page 34, delete lines 28 through 42.
Delete pages 35 through 37.
Page 38, delete lines 1 through 7.
Renumber all SECTIONS consecutively.
(Reference is to SB 383 as printed January 21, 2022.)
BASSLER
ES 383—LS 6690/DI 101 31
COMMITTEE REPORT
Mr. Speaker: Your Committee on Financial Institutions and
Insurance, to which was referred Senate Bill 383, has had the same
under consideration and begs leave to report the same back to the
House with the recommendation that said bill do pass.
(Reference is to SB 383 as reprinted February 1, 2022.)
CARBAUGH
Committee Vote: Yeas 11, Nays 0
ES 383—LS 6690/DI 101