Introduced Version
HOUSE BILL No. 1547
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 24-4.5; IC 28-7-5-28; IC 35-45-7-2.
Synopsis: Finance charges for supervised loans. Provides that for a
supervised loan that is made under the Uniform Consumer Credit Code
(UCCC) and that: (1) is entered into after June 30, 2023; and (2) is not
secured by: (A) an interest in land; or (B) personal property used or
expected to be used as the principal dwelling of the debtor; a
supervised lender may contract for and receive a loan finance charge
not exceeding 36% per year on the unpaid balances of the principal.
Retains the current blended loan finance charge (in which different
rates apply to different ranges of the unpaid balances of the principal)
for the following: (1) A supervised loan entered into before July 1,
2023. (2) A supervised loan that is secured by: (A) an interest in land;
or (B) personal property used or expected to be used as the principal
dwelling of the debtor; regardless of when the supervised loan is
entered into. Provides that, based on information contained in annual
composite reports filed with the department of financial institutions
(department) by creditors required to be licensed under the UCCC, the
department shall publish on the department's website, on an annual
basis, a report that contains specified information concerning
supervised loans made after June 30, 2023, by nondepository licensees
during the reporting period covered by the composite reports. Makes
conforming amendments to: (1) the UCCC; and (2) the statutes
governing: (A) pawnbrokers; and (B) loansharking.
Effective: July 1, 2023.
Judy
January 19, 2023, read first time and referred to Committee on Financial Institutions.
2023 IN 1547—LS 7271/DI 101 Introduced
First Regular Session of the 123rd General Assembly (2023)
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 2022 Regular Session of the General Assembly.
HOUSE BILL No. 1547
A BILL FOR AN ACT to amend the Indiana Code concerning trade
regulation.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 24-4.5-3-203.5, AS AMENDED BY P.L.129-2020,
2 SECTION 6, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3 JULY 1, 2023]: Sec. 203.5. Delinquency Charges — (1) With respect
4 to a consumer loan, refinancing, or consolidation, the parties may
5 contract for a delinquency charge of not more than the following:
6 (a) Five dollars ($5) on any installment or minimum payment due
7 that is not paid in full not later than ten (10) days after its
8 scheduled due date, in the case of a consumer loan, refinancing,
9 or consolidation that is made before July 1, 2019. The amount of
10 five dollars ($5) in this subdivision is subject to change under
11 IC 24-4.5-1-106. In addition, the parties may provide by contract
12 for a delinquency charge that is subject to change. If the parties
13 provide by contract for a delinquency charge that is subject to
14 change, the lender shall disclose in the contract that the amount
15 of the delinquency charge is subject to change under
16 IC 24-4.5-1-106 or this section.
17 (b) In the case of a consumer loan, refinancing, or consolidation
2023 IN 1547—LS 7271/DI 101 2
1 that is made after June 30, 2019, the following:
2 (i) Five dollars ($5) on any installment or minimum payment
3 due that is not paid in full not later than ten (10) days after its
4 scheduled due date, if installments under the consumer loan,
5 refinancing, or consolidation are due every fourteen (14) days
6 or less. The amount of five dollars ($5) in this clause is not
7 subject to change under IC 24-4.5-1-106.
8 (ii) Twenty-five dollars ($25) on any installment or minimum
9 payment due that is not paid in full not later than ten (10) days
10 after its scheduled due date, if installments under the
11 consumer loan, refinancing, or consolidation are due every
12 fifteen (15) days or more. The amount of twenty-five dollars
13 ($25) in this clause is not subject to change under
14 IC 24-4.5-1-106.
15 (iii) Twenty-five dollars ($25) on any installment or minimum
16 payment due that is not paid in full not later than ten (10) days
17 after its scheduled due date, in the case of a consumer loan,
18 refinancing, or consolidation that is payable in a single
19 installment that is due at least thirty (30) days after the
20 consumer loan, refinancing, or consolidation is made. The
21 amount of twenty-five dollars ($25) in this clause is not
22 subject to change under IC 24-4.5-1-106.
23 (2) A delinquency charge under this section may be collected only
24 once on an installment however long it remains in default. With regard
25 to a delinquency charge on consumer loans made under a revolving
26 loan account, the delinquency charge may be applied each month that
27 the payment is less than the minimum required payment on the
28 account. A delinquency charge may be collected any time after it
29 accrues. A delinquency charge may not be collected if:
30 (a) the installment has been deferred and a deferral charge (IC
31 24-4.5-3-204) has been paid or incurred;
32 (b) a charge for a skip-a-payment service under
33 IC 24-4.5-3-202(1)(i) has been paid or incurred, as provided in
34 IC 24-4.5-3-202(1)(i)(iii); or
35 (c) a charge for an optional expedited payment service under
36 IC 24-4.5-3-202(1)(j) has been paid or incurred, as provided in
37 IC 24-4.5-3-202(1)(j)(v).
38 (3) A creditor may not, directly or indirectly, charge or collect a
39 delinquency charge on a payment that:
40 (a) is paid not later than ten (10) days after its scheduled due date;
41 and
42 (b) is otherwise a full payment of the payment due for the
2023 IN 1547—LS 7271/DI 101 3
1 applicable installment period;
2 if the only delinquency with respect to the consumer loan, refinancing,
3 or consolidation is attributable to a delinquency charge assessed on an
4 earlier installment.
5 (4) If two (2) or more installments, or parts of two (2) or more
6 installments, of a precomputed loan are in default for ten (10) days or
7 more, the lender may elect to convert the loan from a precomputed loan
8 to a loan in which the finance charge is based on unpaid balances. A
9 lender that makes this election shall make a rebate under the provisions
10 on rebates upon prepayment (IC 24-4.5-3-210) as of the maturity date
11 of the first delinquent installment, and thereafter may make a loan
12 finance charge as authorized by the provisions on loan finance charges
13 for consumer loans (IC 24-4.5-3-201) or supervised loans (IC
14 24-4.5-3-508). (section 508 or 508.1 of this chapter, as applicable).
15 The amount of the rebate shall not be reduced by the amount of any
16 permitted minimum charge (IC 24-4.5-3-210). Any deferral charges
17 made on installments due at or after the maturity date of the first
18 delinquent installment shall be rebated, and no further deferral charges
19 shall be made.
20 SECTION 2. IC 24-4.5-3-205, AS AMENDED BY P.L.85-2020,
21 SECTION 12, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
22 JULY 1, 2023]: Sec. 205. Loan Finance Charge on Refinancing —
23 With respect to a consumer loan, refinancing, or consolidation, the
24 lender may by agreement with the debtor refinance the unpaid balance
25 and may contract for and receive a loan finance charge based on the
26 principal resulting from the refinancing at a rate not exceeding that
27 permitted by the provisions on a loan finance charge for consumer
28 loans (IC 24-4.5-3-201) or the provisions on a loan finance charge for
29 supervised loans (IC 24-4.5-3-508), (section 508 or 508.1 of this
30 chapter, as applicable), whichever is appropriate. For the purpose of
31 determining the loan finance charge permitted, the principal resulting
32 from the refinancing comprises the following:
33 (a) If:
34 (i) the transaction was not precomputed, the total of the unpaid
35 balance and the accrued charges on the date of the refinancing;
36 or
37 (ii) the transaction was precomputed, in the case of a
38 transaction entered into before July 1, 2020, the amount which
39 the debtor would have been required to pay upon prepayment
40 pursuant to the provisions on rebate upon prepayment (IC
41 24-4.5-3-210) on the date of refinancing.
42 (b) Appropriate additional charges (IC 24-4.5-3-202), payment of
2023 IN 1547—LS 7271/DI 101 4
1 which is deferred.
2 SECTION 3. IC 24-4.5-3-206, AS AMENDED BY P.L.85-2020,
3 SECTION 13, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
4 JULY 1, 2023]: Sec. 206. Loan Finance Charge on Consolidation —
5 (1) If a debtor owes an unpaid balance to a lender with respect to a
6 consumer loan, refinancing, or consolidation, and becomes obligated
7 on another consumer loan, refinancing, or consolidation with the same
8 lender, the parties may agree to a consolidation resulting in a single
9 schedule of payments. If the previous consumer loan, refinancing, or
10 consolidation was not precomputed, the parties may agree to add the
11 unpaid amount of principal and accrued charges on the date of
12 consolidation to the principal with respect to the subsequent loan. If the
13 previous consumer loan, refinancing, or consolidation was
14 precomputed, in the case of a transaction entered into before July 1,
15 2020, the parties may agree to refinance the unpaid balance pursuant
16 to the provisions on refinancing (IC 24-4.5-3-205) and to consolidate
17 the principal resulting from the refinancing by adding it to the principal
18 with respect to the subsequent loan. In either case the lender may
19 contract for and receive a loan finance charge based on the aggregate
20 principal resulting from the consolidation at a rate not in excess of that
21 permitted by the provisions on loan finance charge for consumer loans
22 (IC 24-4.5-3-201) or the provisions on loan finance charge for
23 supervised loans (IC 24-4.5-3-508), (section 508 or 508.1 of this
24 chapter, as applicable), whichever is appropriate.
25 (2) The parties may agree to consolidate the unpaid balance of a
26 consumer loan with the unpaid balance of a consumer credit sale. The
27 parties may agree to refinance the previous unpaid balance pursuant to
28 the provisions on refinancing sales (IC 24-4.5-2-205) or the provisions
29 on refinancing loans (IC 24-4.5-3-205), whichever is appropriate, and
30 to consolidate the amount financed resulting from the refinancing or
31 the principal resulting from the refinancing by adding it to the amount
32 financed or principal with respect to the subsequent sale or loan. The
33 aggregate amount resulting from the consolidation shall be deemed
34 principal, and the creditor may contract for and receive a loan finance
35 charge based on the principal at a rate not in excess of that permitted
36 by the provisions on loan finance charge for consumer loans (IC
37 24-4.5-3-201) or the provisions on loan finance charge for supervised
38 loans (IC 24-4.5-3-508), (section 508 or 508.1 of this chapter, as
39 applicable), whichever is appropriate.
40 SECTION 4. IC 24-4.5-3-208 IS AMENDED TO READ AS
41 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 208. Advances to
42 Perform Covenants of Debtor — (1) If the agreement with respect to a
2023 IN 1547—LS 7271/DI 101 5
1 consumer loan, refinancing, or consolidation contains covenants by the
2 debtor to perform certain duties pertaining to insuring or preserving
3 collateral and if the lender pursuant to the agreement pays for
4 performance of the duties on behalf of the debtor, the lender may add
5 the amounts paid to the debt. Within a reasonable time after advancing
6 any sums, he shall state to the debtor in writing the amount of the sums
7 advanced, any charges with respect to this amount, and any revised
8 payment schedule and, if the duties of the debtor performed by the
9 lender pertain to insurance, a brief description of the insurance paid for
10 by the lender including the type and amount of coverages. No further
11 information need be given.
12 (2) A loan finance charge may be made for sums advanced pursuant
13 to subsection (1) at a rate not exceeding the rate stated to the debtor
14 pursuant to the provisions on disclosure (Part 3) with respect to the
15 loan, refinancing, or consolidation, except that with respect to a
16 revolving loan account the amount of the advance may be added to the
17 unpaid balance of the debt and the lender may make a loan finance
18 charge not exceeding that permitted by the provisions on loan finance
19 charge for consumer loans (24-4.5-3-201) or for supervised loans
20 (24-4.5-3-508), (section 508 or 508.1 of this chapter, as applicable),
21 whichever is appropriate.
22 SECTION 5. IC 24-4.5-3-210, AS AMENDED BY P.L.85-2020,
23 SECTION 15, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
24 JULY 1, 2023]: Sec. 210. Rebate upon Prepayment — (1) Except for
25 subsections (2) and (9), this section applies only to a loan agreement
26 entered into before July 1, 2020. Except as provided in subsection (2),
27 upon prepayment in full of the unpaid balance of a precomputed
28 consumer loan, refinancing, or consolidation, an amount not less than
29 the unearned portion of the loan finance charge calculated according
30 to this section shall be rebated to the debtor. If the rebate otherwise
31 required is less than one dollar ($1), no rebate need be made.
32 (2) Upon prepayment in full of a consumer loan, refinancing, or
33 consolidation, other than one (1) under a revolving loan account, if the
34 loan finance charge earned is less than any permitted minimum loan
35 finance charge (IC 24-4.5-3-201(7), or IC 24-4.5-3-508(7))
36 IC 24-4.5-3-508(7), or IC 24-4.5-3-508.1(5), as applicable)
37 contracted for, whether or not the consumer loan, refinancing, or
38 consolidation is precomputed, the lender may collect or retain the
39 minimum loan finance charge, as if earned, not exceeding the loan
40 finance charge contracted for.
41 (3) The unearned portion of the loan finance charge is a fraction of
42 the loan finance charge of which the numerator is the sum of the
2023 IN 1547—LS 7271/DI 101 6
1 periodic balances scheduled to follow the computational period in
2 which prepayment occurs, and the denominator is the sum of all
3 periodic balances under either the loan agreement or, if the balance
4 owing resulted from a refinancing (IC 24-4.5-3-205) or a consolidation
5 (IC 24-4.5-3-206), under the refinancing agreement or consolidation
6 agreement.
7 (4) In this section:
8 (a) "periodic balance" means the amount scheduled to be
9 outstanding on the last day of a computational period before
10 deducting the payment, if any, scheduled to be made on that day;
11 (b) "computation period" means one (1) month if one-half (1/2)
12 or more of the intervals between scheduled payments under the
13 agreement is one (1) month or more, and otherwise means one (1)
14 week;
15 (c) the "interval" to the due date of the first scheduled installment
16 or the final scheduled payment date is measured from the date of
17 a loan, refinancing, or consolidation, and includes either the first
18 or last day of the interval; and
19 (d) if the interval to the due date of the first scheduled installment
20 does not exceed one (1) month by more than fifteen (15) days
21 when the computational period is one (1) month, or eleven (11)
22 days when the computational period is one (1) week, the interval
23 shall be considered as one (1) computational period.
24 (5) This subsection applies only if the schedule of payments is not
25 regular.
26 (a) If the computational period is one (1) month and:
27 (i) if the number of days in the interval to the due date of the
28 first scheduled installment is less than one (1) month by more
29 than five (5) days, or more than one (1) month by more than
30 five (5) but not more than fifteen (15) days, the unearned loan
31 finance charge shall be increased by an adjustment for each
32 day by which the interval is less than one (1) month and, at the
33 option of the lender, may be reduced by an adjustment for each
34 day by which the interval is more than one (1) month; the
35 adjustment for each day shall be one-thirtieth (1/30) of that
36 part of the loan finance charge earned in the computational
37 period prior to the due date of the first scheduled installment
38 assuming that period to be one (1) month; and
39 (ii) if the interval to the final scheduled payment date is a
40 number of computational periods plus an additional number of
41 days less than a full month, the additional number of days shall
42 be considered a computational period only if sixteen (16) days
2023 IN 1547—LS 7271/DI 101 7
1 or more. This clause applies whether or not clause (i) applies.
2 (b) Notwithstanding subdivision (a), if the computational period
3 is one (1) month, the number of days in the interval to the due
4 date of the first installment exceeds one (1) month by not more
5 than fifteen (15) days, and the schedule of payments is otherwise
6 regular, the lender, at the lender's option, may exclude the extra
7 days and the charge for the extra days in computing the unearned
8 loan finance charge; but if the lender does so and a rebate is
9 required before the due date of the first scheduled installment, the
10 lender shall compute the earned charge for each elapsed day as
11 one-thirtieth (1/30) of the amount the earned charge would have
12 been if the first interval had been one (1) month.
13 (c) If the computational period is one (1) week and:
14 (i) if the number of days in the interval to the due date of the
15 first scheduled installment is less than five (5) days, or more
16 than nine (9) days, but not more than eleven (11) days, the
17 unearned loan finance charge shall be increased by an
18 adjustment for each day by which the interval is less than
19 seven (7) days and, at the option of the lender, may be reduced
20 by an adjustment for each day by which the interval is more
21 than seven (7) days; the adjustment for each day shall be
22 one-seventh (1/7) of that part of the loan finance charge earned
23 in the computational period prior to the due date of the first
24 scheduled installment, assuming that period to be one (1)
25 week; and
26 (ii) if the interval to the final scheduled payment date is a
27 number of computational periods plus an additional number of
28 days less than a full week, the additional number of days shall
29 be considered a computational period only if five (5) days or
30 more. This clause applies whether or not clause (i) applies.
31 (6) If a deferral (IC 24-4.5-3-204) has been agreed to, the unearned
32 portion of the loan finance charge shall be computed without regard to
33 the deferral. The amount of deferral charge earned at the date of
34 prepayment shall also be calculated. If the deferral charge earned is
35 less than the deferral charge paid, the difference shall be added to the
36 unearned portion of the loan finance charge. If any part of a deferral
37 charge has been earned but has not been paid, that part shall be
38 subtracted from the unearned portion of the loan finance charge or shall
39 be added to the unpaid balance.
40 (7) This section does not preclude the collection or retention by the
41 lender of delinquency charges (IC 24-4.5-3-203.5).
42 (8) If the maturity is accelerated for any reason and judgment is
2023 IN 1547—LS 7271/DI 101 8
1 obtained, the debtor is entitled to the same rebate as if payment had
2 been made on the date judgment is entered.
3 (9) Upon prepayment in full of a consumer loan by the proceeds of
4 consumer credit insurance (as defined in IC 24-4.5-4-103), the debtor
5 or the debtor's estate shall pay the same loan finance charge or receive
6 the same rebate as though the debtor had prepaid the agreement on the
7 date the proceeds of the insurance are paid to the lender, but no later
8 than ten (10) business days after satisfactory proof of loss is furnished
9 to the lender. This subsection applies whether or not the loan is
10 precomputed.
11 (10) Upon prepayment in full of a transaction with a term of more
12 than sixty-one (61) months, the unearned loan finance charge shall be
13 computed by applying the disclosed annual percentage rate that would
14 yield the loan finance charge originally contracted for to the unpaid
15 balances of the amount financed for the full computational periods
16 following the prepayment, as originally scheduled or as deferred.
17 SECTION 6. IC 24-4.5-3-505, AS AMENDED BY P.L.69-2018,
18 SECTION 22, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
19 JULY 1, 2023]: Sec. 505. (1) Every creditor required to be licensed
20 under this article shall maintain records in conformity with United
21 States generally accepted accounting principles and practices, or in any
22 other form that may be preapproved at the discretion of the director, in
23 a manner that will enable the department to determine whether the
24 licensee is complying with the provisions of this article. The record
25 keeping system of a licensee shall be sufficient if the licensee makes
26 the required information reasonably available. The department shall
27 determine the sufficiency of the records and whether the licensee has
28 made the required information reasonably available. The department
29 shall be given free access to the records wherever located. The records
30 pertaining to any loan shall be retained for two (2) years after making
31 the final entry relating to the loan, but in the case of a revolving loan
32 account the two (2) years is measured from the date of each entry. A
33 person licensed or required to be licensed under this chapter is subject
34 to IC 28-1-2-30.5 with respect to any records maintained by the person.
35 A person that is exempt (either under this article or under
36 IC 24-4.4-1-202(b)(6)(a)) from licensing and that sponsors one (1) or
37 more licensed mortgage loan originators as independent agents under
38 an exclusive written agreement, as permitted by
39 IC 24-4.4-1-202(b)(6)(a), shall:
40 (a) cooperate with the department; and
41 (b) provide access to records and documents;
42 as required by the department in carrying out examinations of the
2023 IN 1547—LS 7271/DI 101 9
1 activities of the licensed mortgage loan originators sponsored by the
2 federal savings bank.
3 (2) The unique identifier of any person originating a mortgage
4 transaction must be clearly shown on all mortgage transaction
5 application forms and any other documents as required by the director.
6 (3) Every licensee that engages in mortgage transactions shall use
7 automated examination and regulatory software designated by the
8 director, including third party software. Use of the software consistent
9 with guidance documents and policies issued by the director is not a
10 violation of IC 28-1-2-30.
11 (4) Each:
12 (a) creditor that is licensed by the department to engage in
13 mortgage transactions; and
14 (b) entity that is exempt (either under this article or under
15 IC 24-4.4-1-202(b)(6)(a)) from licensing and that:
16 (i) employs one (1) or more licensed mortgage loan
17 originators; or
18 (ii) sponsors under an exclusive written agreement, as
19 permitted by IC 24-4.4-1-202(b)(6)(a), one (1) or more
20 licensed mortgage loan originators as independent agents;
21 shall submit to the NMLSR a call report, which must be in the form
22 and contain information the NMLSR requires.
23 (5) Every creditor required to be licensed under this article shall file
24 with the department a composite report as required by the department,
25 but not more frequently than annually, in the form prescribed by the
26 department relating to all consumer loans made by the licensee. The
27 department shall consult with comparable officials in other states for
28 the purpose of making the kinds of information required in the reports
29 uniform among the states. Information contained in the reports shall be
30 confidential and may be published only in composite form. The
31 department may impose a fee in an amount fixed by the department
32 under IC 28-11-3-5 for each day that a creditor fails to file the report
33 required by this subsection.
34 (6) Based on the information contained in the composite reports
35 filed with the department under subsection (5), the department
36 shall publish on the department's website, on an annual basis, a
37 report that contains the following information, in composite form,
38 concerning supervised loans made after June 30, 2023, by
39 nondepository licensees during the reporting period covered by the
40 composite reports filed under subsection (5):
41 (a) The total number of supervised loans made during the
42 reporting period, categorized by the following ranges of the
2023 IN 1547—LS 7271/DI 101 10
1 principal (as defined in section 107(3) of this chapter) of the
2 supervised loans:
3 (i) Supervised loans with a principal that is two thousand
4 dollars ($2,000) or less.
5 (ii) Supervised loans with a principal that is more than two
6 thousand dollars ($2,000) but does not exceed four
7 thousand dollars ($4,000).
8 (iii) Supervised loans with a principal that is more than
9 four thousand dollars ($4,000) but does not exceed ten
10 thousand dollars ($10,000).
11 (iv) Supervised loans with a principal that is more than ten
12 thousand dollars ($10,000).
13 (b) For each range of principal identified under subdivision
14 (a), the aggregate dollar amount of the supervised loans made
15 in that range during the reporting period.
16 (c) For the data reported in each range of principal under
17 subdivisions (a) and (b), the change in the reported data for
18 the reporting period as compared to the corresponding
19 reported data in the immediately preceding reporting period.
20 (6) (7) A creditor required to be licensed under this article shall file
21 notification with the department if the licensee:
22 (a) has a change in name, address, or principals;
23 (b) opens a new branch, closes an existing branch, or relocates an
24 existing branch;
25 (c) files for bankruptcy or reorganization; or
26 (d) is subject to revocation or suspension proceedings by a state
27 or governmental authority with regard to the licensee's activities;
28 not later than thirty (30) days after the date of the event described in
29 this subsection.
30 (7) (8) Every licensee shall file notification with the department if
31 the licensee or any director, executive officer, or manager of the
32 licensee has been convicted of a felony under the laws of Indiana or
33 any other jurisdiction. The licensee shall file the notification required
34 by this subsection not later than thirty (30) days after the date of the
35 event described in this subsection.
36 SECTION 7. IC 24-4.5-3-508, AS AMENDED BY P.L.29-2022,
37 SECTION 6, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
38 JULY 1, 2023]: Sec. 508. Loan Finance Charge for Supervised Loans
39 ) (1) This section applies only to the following:
40 (a) A supervised loan entered into before July 1, 2023.
41 (b) A supervised loan that is secured by:
42 (i) an interest in land; or
2023 IN 1547—LS 7271/DI 101 11
1 (ii) personal property used or expected to be used as the
2 principal dwelling of the debtor;
3 regardless of when the supervised loan is entered into.
4 With respect to a supervised loan, including a loan pursuant to a
5 revolving loan account, a supervised lender may contract for and
6 receive a loan finance charge not exceeding that permitted by this
7 section.
8 (2) The loan finance charge, calculated according to the actuarial
9 method, may not exceed the equivalent of the greater of:
10 (a) the total of:
11 (i) thirty-six percent (36%) per year on that part of the unpaid
12 balances of the principal (as defined in section 107(3) of this
13 chapter) which is two thousand dollars ($2,000) or less;
14 (ii) twenty-one percent (21%) per year on that part of the
15 unpaid balances of the principal (as defined in section 107(3)
16 of this chapter) which is more than two thousand dollars
17 ($2,000) but does not exceed four thousand dollars ($4,000);
18 and
19 (iii) fifteen percent (15%) per year on that part of the unpaid
20 balances of the principal (as defined in section 107(3) of this
21 chapter) which is more than four thousand dollars ($4,000); or
22 (b) twenty-five percent (25%) per year on the unpaid balances of
23 the principal (as defined in section 107(3) of this chapter).
24 (3) In the case of a loan agreement entered into before July 1, 2020,
25 this section does not limit or restrict the manner of contracting for the
26 loan finance charge, whether by way of add-on, discount, or otherwise,
27 so long as the rate of the loan finance charge does not exceed that
28 permitted by this section. If the loan is precomputed:
29 (a) the loan finance charge may be calculated on the assumption
30 that all scheduled payments will be made when due; and
31 (b) the effect of prepayment is governed by the provisions on
32 rebate upon prepayment in section 210 of this chapter.
33 After June 30, 2020, a loan agreement may not be entered into for a
34 precomputed supervised loan. The loan finance charge authorized by
35 this section must be contracted for between the lender and the debtor,
36 and must be calculated by applying a rate not exceeding the rate set
37 forth in subsection (2) to unpaid balances of the principal (as defined
38 in section 107(3) of this chapter).
39 (4) The term of a loan for the purposes of this section commences
40 on the date the loan is made. Differences in the lengths of months are
41 disregarded, and a day may be counted as one-thirtieth (1/30) of a
42 month. Subject to classifications and differentiations the lender may
2023 IN 1547—LS 7271/DI 101 12
1 reasonably establish, a part of a month in excess of fifteen (15) days
2 may be treated as a full month if periods of fifteen (15) days or less are
3 disregarded and that procedure is not consistently used to obtain a
4 greater yield than would otherwise be permitted.
5 (5) Subject to classifications and differentiations the lender may
6 reasonably establish, the lender may make the same loan finance
7 charge on all principal amounts within a specified range. A loan
8 finance charge does not violate subsection (2) if:
9 (a) when applied to the median amount within each range, it does
10 not exceed the maximum permitted in subsection (2); and
11 (b) when applied to the lowest amount within each range, it does
12 not produce a rate of loan finance charge exceeding the rate
13 calculated according to subdivision (a) by more than eight percent
14 (8%) of the rate calculated according to subdivision (a).
15 (6) The amounts of two thousand dollars ($2,000) and four thousand
16 dollars ($4,000) in subsection (2) and thirty dollars ($30) in subsection
17 (7) are subject to change pursuant to the provisions on adjustment of
18 dollar amounts (IC 24-4.5-1-106). However, notwithstanding
19 IC 24-4.5-1-106(1), for the adjustment of the amount of thirty dollars
20 ($30), the Reference Base Index to be used is the Index for October
21 1992. Notwithstanding IC 24-4.5-1-106(1), for the adjustment of the
22 amounts of two thousand dollars ($2,000) and four thousand dollars
23 ($4,000), the Reference Base Index to be used is the Index for October
24 2012.
25 (7) With respect to a supervised loan not made pursuant to a
26 revolving loan account, the lender may contract for and receive a
27 minimum loan finance charge of not more than thirty dollars ($30). The
28 minimum loan finance charge allowed under this subsection may be
29 imposed only if the lender does not assess a nonrefundable prepaid
30 finance charge under subsection (8) and:
31 (a) the debtor prepays in full a consumer loan, refinancing, or
32 consolidation, regardless of whether the loan, refinancing, or
33 consolidation is precomputed;
34 (b) the loan, refinancing, or consolidation prepaid by the debtor
35 is subject to a loan finance charge that:
36 (i) is contracted for by the parties; and
37 (ii) does not exceed the rate prescribed in subsection (2); and
38 (c) the loan finance charge earned at the time of prepayment is
39 less than the minimum loan finance charge contracted for under
40 this subsection.
41 (8) Except as provided in subsections (7) and (10)(c), in addition to
42 the loan finance charge provided for in this section and to any other
2023 IN 1547—LS 7271/DI 101 13
1 charges and fees permitted by this chapter, the lender may contract for
2 and receive a nonrefundable prepaid finance charge of not more than
3 fifty dollars ($50) if the loan agreement is entered into before July 1,
4 2020, or, if the loan agreement is entered into after June 30, 2020, not
5 more than the following:
6 (a) Seventy-five dollars ($75), in the case of a loan agreement for
7 a principal amount which is two thousand dollars ($2,000) or less.
8 (b) One hundred fifty dollars ($150) in the case of a loan
9 agreement for a principal amount which is more than two
10 thousand dollars ($2,000) but does not exceed four thousand
11 dollars ($4,000).
12 (c) Two hundred dollars ($200) in the case of a loan agreement
13 for a principal amount which is more than four thousand dollars
14 ($4,000).
15 The amounts in this subsection are not subject to change under
16 IC 24-4.5-1-106.
17 (9) The nonrefundable prepaid finance charge provided for in
18 subsection (8) is not subject to refund or rebate. However, for any
19 supervised loan entered into after June 30, 2020, any amount charged
20 by the lender, other than by a lender that is a depository institution (as
21 defined in IC 24-4.5-1-301.5(12)), under subsection (8) that exceeds
22 the applicable amount permitted by subsection (8) constitutes a
23 violation of this article under IC 24-4.5-6-107.5(l) and is subject to
24 refund. Any amount charged by a depository institution (as defined in
25 IC 24-4.5-1-301.5(12)) under subsection (8) that exceeds the applicable
26 amount set forth in subsection (8) is subject to refund.
27 (10) Notwithstanding subsections (8) and (9), in the case of a
28 supervised loan that is not secured by an interest in land, if a lender
29 retains any part of a nonrefundable prepaid finance charge charged on
30 a loan that is paid in full by a new loan from the same lender, the
31 following apply:
32 (a) If the loan is paid in full by the new loan within three (3)
33 months after the date of the prior loan, the lender may not charge
34 a nonrefundable prepaid finance charge on the new loan, or, in the
35 case of a revolving loan, on the increased credit line.
36 (b) The lender may not assess more than two (2) nonrefundable
37 prepaid finance charges in any twelve (12) month period.
38 (c) Subject to subdivisions (a) and (b), if a supervised loan that is
39 entered into by a lender and a debtor before July 1, 2020, is paid
40 in full by a new loan from the same lender after June 30, 2020, the
41 lender may contract for and receive a nonrefundable prepaid
42 finance charge in the amount set forth in subsection (8) for loan
2023 IN 1547—LS 7271/DI 101 14
1 agreements entered into after June 30, 2020.
2 (11) In the case of a supervised loan that is secured by an interest in
3 land, this section does not prohibit a lender from contracting for and
4 receiving a fee for preparing deeds, mortgages, reconveyances, and
5 similar documents under section 202(1)(d)(ii) of this chapter, in
6 addition to the nonrefundable prepaid finance charge provided for in
7 subsection (8).
8 SECTION 8. IC 24-4.5-3-508.1 IS ADDED TO THE INDIANA
9 CODE AS A NEW SECTION TO READ AS FOLLOWS
10 [EFFECTIVE JULY 1, 2023]: Sec. 508.1. (1) This section applies
11 only to a supervised loan that:
12 (a) is entered into after June 30, 2023; and
13 (b) is not secured by:
14 (i) an interest in land; or
15 (ii) personal property used or expected to be used as the
16 principal dwelling of the debtor.
17 (2) With respect to a supervised loan, including a loan pursuant
18 to a revolving loan account, a supervised lender may contract for
19 and receive a loan finance charge not exceeding thirty-six percent
20 (36%) per year on the unpaid balances of the principal (as defined
21 in section 107(3) of this chapter).
22 (3) A loan agreement may not be entered into for a precomputed
23 supervised loan. The loan finance charge authorized by this section
24 must be contracted for between the lender and the debtor, and
25 must be calculated by applying a rate not exceeding the rate set
26 forth in subsection (2) to unpaid balances of the principal (as
27 defined in section 107(3) of this chapter).
28 (4) The term of a loan for the purposes of this section
29 commences on the date the loan is made. Differences in the lengths
30 of months are disregarded, and a day may be counted as
31 one-thirtieth (1/30) of a month. Subject to classifications and
32 differentiations the lender may reasonably establish, a part of a
33 month in excess of fifteen (15) days may be treated as a full month
34 if periods of fifteen (15) days or less are disregarded and that
35 procedure is not consistently used to obtain a greater yield than
36 would otherwise be permitted.
37 (5) With respect to a supervised loan not made pursuant to a
38 revolving loan account, the lender may contract for and receive a
39 minimum loan finance charge of not more than thirty dollars ($30).
40 The minimum loan finance charge allowed under this subsection
41 may be imposed only if the lender does not assess a nonrefundable
42 prepaid finance charge under subsection (6) and:
2023 IN 1547—LS 7271/DI 101 15
1 (a) the debtor prepays in full a supervised loan, refinancing,
2 or consolidation, regardless of whether the loan, refinancing,
3 or consolidation is precomputed;
4 (b) the loan, refinancing, or consolidation prepaid by the
5 debtor is subject to a loan finance charge that:
6 (i) is contracted for by the parties; and
7 (ii) does not exceed the rate prescribed in subsection (2);
8 and
9 (c) the loan finance charge earned at the time of prepayment
10 is less than the minimum loan finance charge contracted for
11 under this subsection.
12 The amount of thirty dollars ($30) in this subsection is subject to
13 change pursuant to the provisions on adjustment of dollar amounts
14 (IC 24-4.5-1-106). However, notwithstanding IC 24-4.5-1-106(1),
15 for the adjustment of the amount of thirty dollars ($30), the
16 Reference Base Index to be used is the Index for October 1992.
17 (6) Except as provided in subsections (5) and (8)(c), in addition
18 to the loan finance charge provided for in this section and to any
19 other charges and fees permitted by this chapter, the lender may
20 contract for and receive a nonrefundable prepaid finance charge
21 of not more than the following:
22 (a) Seventy-five dollars ($75), in the case of a loan agreement
23 for a principal amount which is two thousand dollars ($2,000)
24 or less.
25 (b) One hundred fifty dollars ($150) in the case of a loan
26 agreement for a principal amount which is more than two
27 thousand dollars ($2,000) but does not exceed four thousand
28 dollars ($4,000).
29 (c) Two hundred dollars ($200) in the case of a loan
30 agreement for a principal amount which is more than four
31 thousand dollars ($4,000).
32 The amounts in this subsection are not subject to change under
33 IC 24-4.5-1-106.
34 (7) The nonrefundable prepaid finance charge provided for in
35 subsection (6) is not subject to refund or rebate. However, any
36 amount charged by the lender, other than by a lender that is a
37 depository institution (as defined in IC 24-4.5-1-301.5(12)), under
38 subsection (6) that exceeds the applicable amount permitted by
39 subsection (6) constitutes a violation of this article under
40 IC 24-4.5-6-107.5(l) and is subject to refund. Any amount charged
41 by a depository institution (as defined in IC 24-4.5-1-301.5(12))
42 under subsection (6) that exceeds the applicable amount set forth
2023 IN 1547—LS 7271/DI 101 16
1 in subsection (6) is subject to refund.
2 (8) Notwithstanding subsections (6) and (7), in the case of a
3 supervised loan to which this section applies, if a lender retains any
4 part of a nonrefundable prepaid finance charge charged on a
5 supervised loan that is paid in full by a new loan from the same
6 lender, the following apply:
7 (a) If the loan is paid in full by the new loan within three (3)
8 months after the date of the prior loan, the lender may not
9 charge a nonrefundable prepaid finance charge on the new
10 loan, or, in the case of a revolving loan, on the increased credit
11 line.
12 (b) The lender may not assess more than two (2)
13 nonrefundable prepaid finance charges in any twelve (12)
14 month period.
15 (c) Subject to subdivisions (a) and (b), if a supervised loan that
16 is entered into by a lender and a debtor before July 1, 2020, is
17 paid in full by a new loan from the same lender after June 30,
18 2023, the lender may contract for and receive a
19 nonrefundable prepaid finance charge in the amount set forth
20 in subsection (6) for loan agreements entered into after June
21 30, 2023.
22 SECTION 9. IC 24-4.5-4-107, AS AMENDED BY P.L.85-2020,
23 SECTION 17, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
24 JULY 1, 2023]: Sec. 107. Maximum Charge by Creditor for Insurance
25 - (1) Except as provided in subsection (2), if a creditor contracts for or
26 receives a separate charge for insurance, the amount charged to the
27 debtor for the insurance may not exceed the premium to be charged by
28 the insurer, as computed at the time the charge to the debtor is
29 determined, conforming to any rate filings required by law and made
30 by the insurer with the insurance commissioner.
31 (2) A creditor who provides consumer credit insurance in relation
32 to a revolving charge account (as defined in IC 24-4.5-2-108) or
33 revolving loan account (as defined in IC 24-4.5-3-108) may calculate
34 the charge to the debtor in each billing cycle by applying the current
35 premium rate to one (1) of the following:
36 (a) The average daily unpaid balance of the debt in the cycle.
37 (b) The unpaid balance of the debt or a median amount within a
38 specified range of unpaid balances of debt on approximately the
39 same day of the cycle. The day of the cycle need not be the day
40 used in calculating the credit service charge (IC 24-4.5-2-201(6))
41 or loan finance charge (IC 24-4.5-3-201, and IC 24-4.5-3-508),
42 IC 24-4.5-3-508, or IC 24-4.5-3-508.1, as applicable), but the
2023 IN 1547—LS 7271/DI 101 17
1 specified range shall be the range used for that purpose.
2 (c) The unpaid balances of principal calculated according to the
3 actuarial method.
4 (d) The amount of the insurance benefit for the cycle.
5 SECTION 10. IC 24-4.5-7-102, AS AMENDED BY P.L.69-2018,
6 SECTION 25, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
7 JULY 1, 2023]: Sec. 102. (1) Except as otherwise provided, all
8 provisions of this article applying to consumer loans, including
9 IC 24-4.5-3-502.2, apply to small loans, as defined in this chapter.
10 (2) Subject to subsection (7), a person may not regularly engage in
11 Indiana in any of the following actions unless the department first
12 issues to the person a license under this chapter:
13 (a) The making of small loans.
14 (b) Taking assignments of small loans.
15 (c) Undertaking the direct collection of payments from or the
16 enforcement of rights against debtors arising from small loans.
17 (3) Subject to subsection (4), a person that seeks licensure under
18 this chapter:
19 (a) shall apply to the department for a license in the form and
20 manner prescribed by the department; and
21 (b) is subject to the same licensure requirements and procedures
22 as an applicant for a license to make consumer loans (other than
23 mortgage transactions) under IC 24-4.5-3-502.
24 (4) A person that seeks to make, take assignments of, or undertake
25 the direct collection of payments from or the enforcement of rights
26 against debtors arising from both:
27 (a) small loans under this chapter; and
28 (b) consumer loans (other than mortgage transactions) that are not
29 small loans;
30 must obtain a separate license from the department for each type of
31 loan, as described in IC 24-4.5-3-502(5).
32 (5) This chapter applies to:
33 (a) a lender;
34 (b) a bank, savings association, credit union, or other state or
35 federally regulated financial institution except those that are
36 specifically exempt regarding limitations on interest rates and
37 fees; or
38 (c) a person, if the department determines that a transaction is:
39 (i) in substance a disguised loan; or
40 (ii) the application of subterfuge for the purpose of avoiding
41 this chapter.
42 (6) A loan that:
2023 IN 1547—LS 7271/DI 101 18
1 (a) does not qualify as a small loan under section 104 of this
2 chapter;
3 (b) is for a term shorter than that specified in section 401(1) of
4 this chapter; or
5 (c) is made in violation of section 201, 401, 402, 404, or 410 of
6 this chapter;
7 is subject to this article. The department may conform the loan finance
8 charge for a loan described in this subsection to the limitations set forth
9 in IC 24-4.5-3-508(2). IC 24-4.5-3-508.1(2).
10 (7) Notwithstanding IC 24-4.5-1-301.5, for purposes of subsection
11 (2), a person "regularly engages" in any of the activities described in
12 subsection (2) with respect to a small loan if the person:
13 (a) performed any of the activities described in subsection (2)
14 with respect to a small loan at least one (1) time in the preceding
15 calendar year; or
16 (b) performs or will perform any of the activities described in
17 subsection (2) with respect to a small loan at least one (1) time in
18 the current calendar year if the person did not perform any of the
19 activities described in subsection (2) with respect to a small loan
20 at least one (1) time in the preceding calendar year.
21 SECTION 11. IC 24-4.5-7-411 IS AMENDED TO READ AS
22 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 411. Finance charges
23 made in compliance with this chapter are exempt from:
24 (a) IC 24-4.5-3-508;
25 (b) IC 24-4.5-3-508.1; and
26 (c) IC 35-45-7.
27 SECTION 12. IC 28-7-5-28 IS AMENDED TO READ AS
28 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 28. (a) The maximum
29 rate of interest charged by pawnbrokers shall be the same as the
30 maximum loan finance charge for supervised lenders loans under
31 IC 24-4.5-3-508(2). IC 24-4.5-3-508.1(2). For purposes of this
32 subsection:
33 (1) the term of a loan commences on the date on which the loan
34 is made;
35 (2) differences in lengths of months are disregarded; and
36 (3) each day is counted as one-thirtieth (1/30) of a month.
37 The minimum term of a loan made by a pawnbroker is one (1) month.
38 However, on loans paid in full within the first month, the pawnbroker
39 may charge one (1) month's interest.
40 (b) Interest shall not be deducted in advance, neither shall the
41 pawnbroker induce or permit any borrower to split up or divide any
42 loan or loans for the purpose of evading any provisions of this chapter.
2023 IN 1547—LS 7271/DI 101 19
1 (c) If a pawnbroker charges or receives interest in excess of that
2 provided in this section, or makes any charges not authorized by this
3 chapter, the pawnbroker shall forfeit principal and interest and return
4 the pledge upon demand of the pledger and surrender of the pawn
5 ticket without the principal or interest. If such excessive or
6 unauthorized charges have been paid by the pledger, the pledger may
7 recover the same, including the principal if paid, in a civil action
8 against the pawnbroker.
9 SECTION 13. IC 35-45-7-2, AS AMENDED BY P.L.158-2013,
10 SECTION 536, IS AMENDED TO READ AS FOLLOWS
11 [EFFECTIVE JULY 1, 2023]: Sec. 2. A person who, in exchange for
12 the loan of any property, knowingly or intentionally receives or
13 contracts to receive from another person any consideration, at a rate
14 greater than two (2) times the rate specified in IC 24-4.5-3-508(2)(a)(i),
15 IC 24-4.5-3-508.1(2), commits loansharking, a Level 6 felony.
16 However, loansharking is a Level 5 felony if force or the threat of force
17 is used to collect or to attempt to collect any of the property loaned or
18 any of the consideration for the loan.
2023 IN 1547—LS 7271/DI 101