Second Regular Session of the 122nd General Assembly (2022)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
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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.
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(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
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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
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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"
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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:
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(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.
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(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
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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
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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
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(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
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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:
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