LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
200 W. Washington St., Suite 301
Indianapolis, IN 46204
(317) 233-0696
iga.in.gov
FISCAL IMPACT STATEMENT
LS 6690 NOTE PREPARED: Jan 20, 2022
BILL NUMBER: SB 383 BILL AMENDED:
SUBJECT: Financial Institutions and Consumer Credit.
FIRST AUTHOR: Sen. Bassler BILL STATUS: CR Adopted - 1
st
House
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
XDEDICATED
FEDERAL
Summary of Legislation: The bill 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).
The bill amends the provisions governing a change of control of the following entities regulated by the
Department of Financial Institutions (DFI) to require that the regulated entity provide to the DFI the required
application for the proposed change in control at least 120 days before the anticipated date of closing of the
acquisition: (1) First lien mortgage lenders. (2) Creditors licensed under the UCCC to make consumer loans.
(3) Civil proceeding advance payment providers. (4) Debt management companies. (5) Pawnbrokers. (6)
Money transmitters. (7) Check cashers.
The bill authorizes the DFI to: (1) revoke or suspend the regulated entity's license; or (2) direct the acquiring
entity to apply for a new license under applicable law; if either party fails to comply with the requirements
for a change in control of the licensed entity.
The bill 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.
The bill amends provisions in the UCCC concerning permitted additional charges for guaranteed asset
SB 383 1 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).
The bill amends the statute concerning rental purchase agreements to authorize a lessor to charge an
expedited payment service fee of $3 for accepting an expedited payment from a lessee (versus a telephone
payment fee of $3 under current law) if certain conditions are met.
The bill amends the Indiana Code section concerning the DFI'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.
The bill 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.
The bill 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".
The bill 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.
Effective Date: Upon passage; July 1, 2022.
Explanation of State Expenditures: Department of Financial Institutions (DFI): The provisions of this
bill will require the DFI to amend some internal regulatory processes. It also makes changes concerning the
DFI's duties of confidentiality with respect to certain information concerning financial institutions. The DFI
is funded through money deposited into the Financial Institutions Fund, which is a dedicated fund that
receives fees and penalties collected under I.C. 28-1. The money from the fund is appropriated to the DFI.
The FY 2022 and FY 2023 appropriation to the DFI is about $9.3 M in each year.
Explanation of State Revenues: Finance Charges: The bill makes changes to the requirements related to
allowable charges for supervised loans. It changes the method of valuation of used motor vehicle under
sections of the UCCC. Since these charges are mostly determined by market conditions and competition, this
bill will not necessarily lead to a change in borrowing cost to the consumers. Any change in finance charges
could lead to a change in taxable income of the financial institutions. This could potentially impact the
Financial Institution Tax (FIT) deposited in state General Fund.
Other Provisions: The provisions governing a change of control of certain entities, allowing changes in fees
on rental purchase agreements, making changes to the fidelity coverage of credit unions, and changes to
statutes governing money transmitters will impact the business practices of these entities. It will not have any
fiscal impact.
Additional Information- Financial Institution Tax: FIT is assessed on apportioned adjusted gross income of
SB 383 2 a financial institution. It applies to any business which is primarily engaged in the business of extending
credit, engaged in leasing that is the economic equivalent of extending credit, or credit card operations.
Insurance companies, international banking facilities, federally chartered credit unions, and S corporations
are exempt. Local units of government are guaranteed distributions of FIT up to certain amount, and the
remaining revenue collected is deposited in the state General Fund.
Explanation of Local Expenditures:
Explanation of Local Revenues: Any change in FIT revenue could potentially affect the local distribution.
State Agencies Affected: Department of Financial Institutions (DFI).
Local Agencies Affected: Local units.
Information Sources:
Fiscal Analyst: Randhir Jha, 317-232-9556.
SB 383 3