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. SENATE ENROLLED ACT No. 408 AN ACT to amend the Indiana Code concerning financial institutions. Be it enacted by the General Assembly of the State of Indiana: SECTION 1. IC 28-1-11-3.1, AS AMENDED BY P.L.73-2016, SECTION 17, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2022]: Sec. 3.1. (a) Any bank or trust company shall have the power to discount, negotiate, sell and guarantee promissory notes, bonds, drafts, acceptances, bills of exchange, and other evidences of debt; to buy and sell, exchange, coin and bullion; to loan money; to borrow money and to issue its notes, bonds, or debentures to evidence any such borrowing and to mortgage, pledge, or hypothecate any of its assets to secure the repayment thereof; to receive savings deposits and deposits of money subject to check, and deposits of securities or other personal property from any person or corporation, upon such terms as may be agreed upon by the parties; to contract for and receive on loans and discounts the highest rate of interest allowed by the laws of this state to be contracted for and received by individuals; to accept, for payment at a future date, drafts drawn upon it by its customers and to issue letters of credit authorizing the holders thereof to draw drafts upon it or its correspondents at sight or on time, however, the letter of credit must state a specific expiration date; and to exercise all the powers incidental and proper or which may be necessary and usual in carrying on a general banking business, but it shall have no right to issue bills to circulate as money. SEA 408 2 (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 SEA 408 3 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) To purchase, hold, and convey real estate in accordance with section 5 of this chapter. (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. (10) Pursuant to its lending authority, to engage directly or indirectly in any tax equity finance transaction permissible SEA 408 4 for a national bank or federal savings association under 12 CFR 7.1025. The authority to engage in tax equity finance transactions under this subdivision is separate from, and does not limit, any investment authorities available to a bank or trust company. A tax equity finance transaction is subject to the substantive legal requirements of a loan, including, without limitation, IC 28-1-13. (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. SECTION 2. IC 28-1-11-14, AS AMENDED BY P.L.73-2016, SECTION 19, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2022]: Sec. 14. (a) As used in this section, "community based economic development" refers to activities that seek to address economic development through affordable housing development or the rehabilitation of qualified rehabilitated buildings or certified historic structures, or that seeks to address economic causes of poverty within specific geographic areas, revitalizing the economic and social base of low income communities through activities that include: (1) small business and micro-enterprise support; (2) commercial, industrial, and retail revitalization, retention, and expansion; (3) capacity development and technical assistance support for community development corporations; (4) employment and training efforts; (5) human resource development; and (6) 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) As used in this section, "community and economic development entity" has the meaning set forth in 12 CFR 24.2(c). (e) As used in this section, "community development project" SEA 408 5 has the meaning set forth in 12 CFR 24.2(d). (f) As used in this section, "public welfare investment" means any investment permitted by 12 CFR 24.3. (g) As used in this section, "tax equity finance transaction" has the meaning set forth in 12 CFR 7.1025(b)(3). (d) (h) 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; (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.); or (5) an entity making qualified rehabilitation expenditures with respect to a qualified rehabilitated building or certified historic structure, as such terms are defined in section 47 of the Internal Revenue Code of 1986 or a similar state historic tax credit program, as provided for in Section 619(d)(1)(E) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 1851(d)(1)(E)). (i) Subject to any regulation, rule, policy, or guidance adopted by the department, any bank or trust company may invest directly or indirectly in any: (1) community and economic development entity; (2) community development project; or (3) other public welfare investment; as long as the investment is in compliance with 12 CFR 24. (e) (j) Except as provided in subsection (f), (k), the aggregate of all equity investments by a bank or trust company under subsection (d) subsections (h) and (i) may not exceed: SEA 408 6 (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) (k) In determining whether to permit the aggregate of all equity investments by a bank or trust company under subsection (d) subsections (h) and (i) to exceed five percent (5%) of the capital and surplus of the bank or trust company under subsection (e)(1), (j)(1), the director shall consider whether: (1) the aggregate of all equity investments under subsection (d) subsections (h) and (i) will pose a significant risk to the affected deposit insurance fund; and (2) the bank or trust company is adequately capitalized. (g) (l) 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. SECTION 3. IC 28-6.1-6-3 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2022]: Sec. 3. (a) A savings bank may loan money. (b) Subject to any regulation, rule, policy, or guidance adopted by the department, pursuant to its lending authority, a savings bank may engage directly or indirectly in any tax equity finance transaction permissible for a national bank or federal savings association under 12 CFR 7.1025. The authority to engage in tax equity finance transactions under this subsection is separate from, and does not limit, any investment authorities available to a savings bank. A tax equity finance transaction is subject to the substantive legal requirements of a loan, including, without limitation, IC 28-6.1-9. SECTION 4. IC 28-15-2-1, AS AMENDED BY P.L.27-2012, SECTION 111, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2022]: Sec. 1. (a) Savings associations may do the following: (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. SEA 408 7 (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. (M) Subject to any regulation, rule, policy, or guidance adopted by the department and pursuant to its lending authority, engage directly or indirectly in any tax equity finance transaction permissible for a national bank or federal savings association under 12 CFR 7.1025. The authority to engage in tax equity finance transactions under this clause is separate from, and does not limit, any investment authorities available to a savings association. A tax equity finance transaction is subject to the substantive legal requirements of a loan, including, without limitation, IC 28-15-6. (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 SEA 408 8 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 SEA 408 9 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 SEA 408 10 (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 SEA 408 11 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, 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). SEA 408 President of the Senate President Pro Tempore Speaker of the House of Representatives Governor of the State of Indiana Date: Time: SEA 408