Indiana 2023 Regular Session

Indiana Senate Bill SB0452 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
	1	+	ES0452.1
	2	+	April 3, 2023
	3	+	ENGROSSED
	4	+	SENATE BILL No. 452
	5	+	_____
	6	+	DIGEST OF SB 452 (Updated April 3, 2023 11:16 am - DI 101)
	7	+	Citations Affected: IC 24-4.4; IC 24-4.5; IC 28-1; IC 28-7; IC 28-10;
	8	+	noncode.
	9	+	Synopsis: Consumer credit and financial institutions. Provides that a
	10	+	reference to federal law in: (1) the first lien mortgage lending act (act);
	11	+	(2) the Uniform Consumer Credit Code (UCCC); or (3) the Indiana
	12	+	Code title governing financial institutions; is a reference to the law as
	13	+	in effect December 31, 2022 (rather than December 31, 2021, under
	14	+	current law). Amends as follows a provision in the act that authorizes
	15	+	a federal savings bank to voluntarily register with the department of
	16	+	financial institutions (department) for the purpose of sponsoring
	17	+	licensed mortgage loan originators under certain circumstances: (1)
	18	+	Authorizes any person (rather than just a federal savings bank) that
	19	+	meets the requirements set forth in the provision to sponsor one or
	20	+	more licensed mortgage loan originators. (2) Eliminates a requirement
	21	+	that a sponsored individual must sell, solicit, or negotiate insurance
	22	+	under an exclusive written agreement for a licensed insurance company
	23	+	that is a subsidiary of a company that also owns or controls the federal
	24	+	(Continued next page)
	25	+	Effective: July 1, 2023.
	26	+	Bassler, Gaskill
	27	+	(HOUSE SPONSOR — SPEEDY)
	28	+	January 19, 2023, read first time and referred to Committee on Insurance and Financial
	29	+	Institutions.
	30	+	February 2, 2023, reported favorably — Do Pass.
	31	+	February 6, 2023, read second time, ordered engrossed. Engrossed.
	32	+	February 9, 2023, read third time, passed. Yeas 49, nays 0.
	33	+	HOUSE ACTION
	34	+	February 28, 2023, read first time and referred to Committee on Financial Institutions.
	35	+	April 3, 2023, amended, reported — Do Pass.
	36	+	ES 452—LS 7232/DI 101 Digest Continued
	37	+	savings bank. (3) Provides that a sponsored individual must be engaged
	38	+	solely as a third party loan processor or underwriter. Specifies certain
	39	+	requirements that a person must comply with in order to sponsor an
	40	+	individual under these provisions. Makes conforming amendments to:
	41	+	(1) the act; and (2) related provisions in the UCCC concerning
	42	+	subordinate lien mortgage transactions. Provides that a depository
	43	+	financial institution may change, amend, alter, add, or remove any term
	44	+	in a contract or agreement with a depositor at any time, subject to any
	45	+	limitations imposed in the contract or agreement itself. Sets forth
	46	+	principles with respect to contract interpretation in connection with the
	47	+	authority of a depository financial institution to take these actions with
	48	+	respect to a contract or agreement. Requires a state chartered credit
	49	+	union (credit union) to maintain capital consistent with the safety and
	50	+	soundness necessary to support the risk in the credit union's activities.
	51	+	Provides that the National Credit Union Administration's: (1) prompt
	52	+	corrective action; and (2) risk based net worth; regulations apply to all
	53	+	credit unions. Requires a credit union that is classified as adequately
	54	+	capitalized or lower to increase the dollar amount of its net worth on a
	55	+	quarterly basis by an amount equal to at least 0.1% of the credit union's
	56	+	total assets until the credit union is classified as well capitalized. Sets
	57	+	forth different: (1) mandatory supervisory requirements or restrictions;
	58	+	and (2) discretionary supervisory requirements or restrictions (to be
	59	+	imposed by the director of the department); with respect to a credit
	60	+	union, depending on the credit union's classification as
	61	+	undercapitalized, significantly undercapitalized, or critically
	62	+	undercapitalized. Directs the department to use specified statutory
	63	+	authority to adopt emergency rules not later than June 30, 2024, to
	64	+	amend the department's rule concerning mortgage lenders and
	65	+	originators in order to: (1) conform the rule to the bill's provisions
	66	+	concerning the sponsorship of licensed mortgage loan originators to
	67	+	engage solely as a third party loan processor or underwriter; and (2)
	68	+	establish a rule to allow certain persons to sponsor one or more
	69	+	mortgage loan originators, who are not employees of the sponsoring
	70	+	person, to perform mortgage loan originator activities exclusively for
	71	+	the sponsoring person under certain prescribed conditions.
	72	+	ES 452—LS 7232/DI 101ES 452—LS 7232/DI 101 April 3, 2023
1	73		First Regular Session of the 123rd General Assembly (2023)
2	74		PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
3	75		Constitution) is being amended, the text of the existing provision will appear in this style type,
4	76		additions will appear in this style type, and deletions will appear in this style type.
5	77		Additions: Whenever a new statutory provision is being enacted (or a new constitutional
6	78		provision adopted), the text of the new provision will appear in this style type. Also, the
7	79		word NEW will appear in that style type in the introductory clause of each SECTION that adds
8	80		a new provision to the Indiana Code or the Indiana Constitution.
9	81		Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
10	82		between statutes enacted by the 2022 Regular Session of the General Assembly.
11		-	SENATE ENROLLED ACT No. 452
12		-	AN ACT to amend the Indiana Code concerning financial
13		-	institutions.
	83	+	ENGROSSED
	84	+	SENATE BILL No. 452
	85	+	A BILL FOR AN ACT to amend the Indiana Code concerning
	86	+	financial institutions.
14	87		Be it enacted by the General Assembly of the State of Indiana:
15		-	SECTION 1. IC 24-4.4-1-102, AS AMENDED BY P.L.29-2022,
16		-	SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
17		-	JULY 1, 2023]: Sec. 102. (1) This article shall be liberally construed
18		-	and applied to promote its underlying purposes and policies.
19		-	(2) The underlying purposes and policies of this article are:
20		-	(a) to permit and encourage the development of fair and
21		-	economically sound first lien mortgage lending practices; and
22		-	(b) to conform the regulation of first lien mortgage lending
23		-	practices to applicable state and federal laws, rules, regulations,
24		-	policies, and guidance.
25		-	(3) A reference to a requirement imposed by this article includes
26		-	reference to a related rule of the department adopted under this article.
27		-	(4) A reference to a federal law in this article is a reference to the
28		-	law as in effect December 31, 2021. 2022.
29		-	SECTION 2. IC 24-4.4-1-202, AS AMENDED BY P.L.103-2014,
30		-	SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
31		-	JULY 1, 2023]: Sec. 202. (a) As used in this section, "balloon
32		-	payment", with respect to a mortgage transaction, means any payment:
33		-	(1) that the creditor requires the debtor to make at any time during
34		-	SEA 452 — CC 1 2
35		-	the term of the mortgage;
36		-	(2) that represents the entire amount of the outstanding balance
37		-	with respect to the mortgage; and
38		-	(3) the entire amount of which is due as of a specified date or at
39		-	the end of a specified period;
40		-	if the aggregate amount of the minimum periodic payments required
41		-	under the mortgage would not fully amortize the outstanding balance
42		-	by the specified date or at the end of the specified period. The term
43		-	does not include a payment required by a creditor under a due-on-sale
44		-	clause (as defined in 12 U.S.C. 1701j-3(a)) or a payment required by
45		-	a creditor under a provision in the mortgage that permits the creditor
46		-	to accelerate the debt upon the debtor's default or failure to abide by the
47		-	material terms of the mortgage.
48		-	(b) This article does not apply to the following:
49		-	(1) Extensions of credit to government or governmental agencies
50		-	or instrumentalities.
51		-	(2) A first lien mortgage transaction in which the debt is incurred
52		-	primarily for a purpose other than a personal, family, or
53		-	household purpose.
54		-	(3) An extension of credit primarily for a business, a commercial,
55		-	or an agricultural purpose.
56		-	(4) Except for IC 24-4.4-2-401(2), IC 24-4.4-2-402.3,
57		-	IC 24-4.4-2-405(4), and IC 24-4.4-2-405(5), a first lien mortgage
58		-	transaction made:
59		-	(a) in compliance with the requirements of; and
60		-	(b) by a community development corporation (as defined in
61		-	IC 4-4-28-2) acting as a subrecipient of funds from;
62		-	the Indiana housing and community development authority
63		-	established by IC 5-20-1-3.
64		-	(5) Except for IC 24-4.4-2-401(2), IC 24-4.4-2-402.3,
65		-	IC 24-4.4-2-405(4), and IC 24-4.4-2-405(5), a first lien mortgage
66		-	transaction made by an entity that exclusively uses funds provided
67		-	by the United States Department of Housing and Urban
68		-	Development under Title 1 of the federal Housing and
69		-	Community Development Act of 1974, Public Law 93-383, as
70		-	amended (42 U.S.C. 5301 et seq.).
71		-	(6) An extension of credit originated by the following:
72		-	(a) A depository institution. However, a federal savings bank
73		-	may voluntarily register with the department for the purpose
74		-	of sponsoring, under an exclusive written agreement,
75		-	individuals who are licensed as mortgage loan originators
76		-	under this article and 750 IAC 9-3, who perform mortgage
77		-	SEA 452 — CC 1 3
78		-	loan origination activities as independent agents under the
79		-	federal savings bank's direct supervision and control, who hold
80		-	a current, valid insurance producer license under IC 27-1-15.6,
81		-	and who sell, solicit, or negotiate insurance under an exclusive
82		-	written agreement for a licensed insurance company that is a
83		-	subsidiary of a company that also owns or controls the federal
84		-	savings bank, if the federal savings bank does the following:
85		-	(i) Assumes responsibility for and reasonably supervises the
86		-	activities of all licensed mortgage loan originators sponsored
87		-	by the federal savings bank under this clause.
88		-	(ii) Registers with and maintains a valid unique identifier
89		-	issued by the NMLSR as required by IC 24-4.4-2-401(2),
90		-	maintains a surety bond in accordance with
91		-	IC 24-4.4-2-402.3, submits to the NMLSR reports of
92		-	condition in accordance with IC 24-4.4-2-405(4) (subject to
93		-	IC 24-4.4-2-402.4), and files financial statements with the
94		-	department in accordance with IC 24-4.4-2-405(5).
95		-	(iii) Cooperates with the department, and provides access to
96		-	records and documents, as required by the department in
97		-	carrying out examinations of the activities of the licensed
98		-	mortgage loan originators sponsored by the federal savings
99		-	bank under this clause, as described in IC 24-4.4-2-405(1).
100		-	(iv) Agrees to comply with all law, rules, directives, and
101		-	orders in connection with the activities of the licensed
102		-	mortgage loan originators sponsored by the federal savings
103		-	bank, as the director determines necessary to ensure
104		-	compliance with the federal Secure and Fair Enforcement
105		-	for Mortgage Licensing Act of 2008 (12 U.S.C. 5101 et seq.)
106		-	and with Indiana law.
107		-	(b) Subsidiaries that are not licensed under this article and that
108		-	are:
109		-	(i) owned and controlled by a depository institution; and
110		-	(ii) regulated by a federal banking agency.
111		-	(c) An institution regulated by the Farm Credit Administration.
112		-	(7) Except for IC 24-4.4-2-401(2), IC 24-4.4-2-402.3,
113		-	IC 24-4.4-2-405(4), and IC 24-4.4-2-405(5), a credit union service
114		-	organization that is majority owned, directly or indirectly, by one
115		-	(1) or more credit unions.
116		-	(8) A person that does not engage as a creditor in first lien
117		-	mortgage transactions in Indiana. However, a person may
118		-	voluntarily register with the department for the purpose of
119		-	sponsoring employees who are licensed as mortgage loan
120		-	SEA 452 — CC 1 4
121		-	originators under this article and 750 IAC 9-3, and who are
122		-	engaged solely as third party loan processors or underwriters,
123		-	if the person does the following:
124		-	(a) Assumes responsibility for and reasonably supervises
125		-	the activities of all licensed mortgage loan originators
126		-	sponsored by the person.
127		-	(b) Registers with and maintains a valid unique identifier
128		-	issued by the NMLSR as required by IC 24-4.4-2-401(2),
129		-	maintains a surety bond in accordance with
130		-	IC 24-4.4-2-402.3, submits to the NMLSR reports of
131		-	condition in accordance with IC 24-4.4-2-405(4) (subject to
132		-	IC 24-4.4-2-402.4), and files financial statements with the
133		-	department in accordance with IC 24-4.4-2-405(5).
134		-	(c) Cooperates with the department, and provides access to
135		-	records and documents, as required by the department in
136		-	carrying out examinations of the activities of the licensed
137		-	mortgage loan originators sponsored by the person, as
138		-	described in IC 24-4.4-2-405(1).
139		-	(d) Agrees to comply with all law, rules, directives, and
140		-	orders in connection with the activities of the licensed
141		-	mortgage loan originators sponsored by the person, as the
142		-	director determines necessary to ensure compliance with
143		-	the federal Secure and Fair Enforcement for Mortgage
144		-	Licensing Act of 2008 (12 U.S.C. 5101 et seq.) and with
145		-	Indiana law.
146		-	(8) (9) A first lien mortgage transaction originated by a registered
147		-	mortgage loan originator, when acting for an entity described in
148		-	subsection (6). However, a privately insured state chartered credit
149		-	union shall comply with the system of mortgage loan originator
150		-	registration developed by the Federal Financial Institutions
151		-	Examinations Council under Section 1507 of the federal Secure
152		-	and Fair Enforcement for Mortgage Licensing Act of 2008
153		-	(SAFE).
154		-	(9) (10) An individual who offers or negotiates terms of a
155		-	mortgage transaction with or on behalf of an immediate family
156		-	member of the individual.
157		-	(10) (11) An individual who offers or negotiates terms of a
158		-	mortgage transaction secured by a dwelling that served as the
159		-	individual's residence.
160		-	(11) (12) Unless the attorney is compensated by:
161		-	(a) a lender;
162		-	(b) a mortgage broker;
163		-	SEA 452 — CC 1 5
164		-	(c) another mortgage loan originator; or
165		-	(d) any agent of the lender, mortgage broker, or other
166		-	mortgage loan originator described in clauses (a) through (c);
167		-	a licensed attorney who negotiates the terms of a mortgage
168		-	transaction on behalf of a client as an ancillary matter to the
169		-	attorney's representation of the client.
170		-	(12) (13) The United States, any state or local government, or any
171		-	agency or instrumentality of any governmental entity, including
172		-	United States government sponsored enterprises.
173		-	(13) (14) A person in whose name a tablefunded transaction is
174		-	closed, as described in section 301(34)(a) of this chapter.
175		-	However, the exemption provided by this subsection does not
176		-	apply if:
177		-	(a) the transaction:
178		-	(i) is secured by a dwelling that is a mobile home, a
179		-	manufactured home, or a trailer; and
180		-	(ii) is not also secured by an interest in land; and
181		-	(b) the person in whose name the transaction is closed, as
182		-	described in section 301(34)(a) of this chapter, sells the
183		-	dwelling to the debtor through a retail installment contract or
184		-	other similar transaction.
185		-	(14) (15) A bona fide nonprofit organization not operating in a
186		-	commercial context, as determined by the director, if the
187		-	following criteria are satisfied:
188		-	(a) Subject to clause (b), the organization originates only one
189		-	(1) or both of the following types of mortgage transactions:
190		-	(i) Zero (0) interest first lien mortgage transactions.
191		-	(ii) Zero (0) interest subordinate lien mortgage transactions.
192		-	(b) The organization does not require, under the terms of the
193		-	mortgage or otherwise, balloon payments with respect to the
194		-	mortgage transactions described in clause (a).
195		-	(c) The organization is exempt from federal income taxation
196		-	under Section 501(c)(3) of the Internal Revenue Code.
197		-	(d) The organization's primary purpose is to serve the public
198		-	by helping low income individuals and families build, repair,
199		-	and purchase housing.
200		-	(e) The organization uses only:
201		-	(i) unpaid volunteers; or
202		-	(ii) employees whose compensation is not based on the
203		-	number or size of any mortgage transactions that the
204		-	employees originate;
205		-	to originate the mortgage transactions described in clause (a).
206		-	SEA 452 — CC 1 6
207		-	(f) The organization does not charge loan origination fees in
208		-	connection with the mortgage transactions described in clause
209		-	(a).
210		-	(15) (16) A bona fide nonprofit organization (as defined in section
211		-	301(37) of this chapter) if the following criteria are satisfied:
212		-	(a) For each calendar year that the organization seeks the
213		-	exemption provided by this subdivision, the organization
214		-	certifies, not later than December 31 of the preceding calendar
215		-	year and on a form prescribed by the director and accompanied
216		-	by such documentation as required by the director, that the
217		-	organization is a bona fide nonprofit organization (as defined
218		-	in section 301(37) of this chapter).
219		-	(b) The director determines that the organization originates
220		-	only mortgage transactions that are favorable to the debtor. For
221		-	purposes of this clause, a mortgage transaction is favorable to
222		-	the debtor if the director determines that the terms of the
223		-	mortgage transaction are consistent with terms of mortgage
224		-	transactions made in a public or charitable context, rather than
225		-	in a commercial context.
226		-	SECTION 3. IC 24-4.4-1-301, AS AMENDED BY P.L.69-2018,
227		-	SECTION 3, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
228		-	JULY 1, 2023]: Sec. 301. In addition to definitions appearing in
229		-	subsequent chapters of this article, the following definitions apply
230		-	throughout this article:
231		-	(1) "Affiliate", with respect to any person subject to this article,
232		-	means a person that, directly or indirectly, through one (1) or
233		-	more intermediaries:
234		-	(a) controls;
235		-	(b) is controlled by; or
236		-	(c) is under common control with;
237		-	the person subject to this article.
238		-	(2) "Agreement" means the bargain of the parties in fact as found
239		-	in the parties' language or by implication from other
240		-	circumstances, including course of dealing or usage of trade or
241		-	course of performance.
242		-	(3) "Agricultural products" includes agricultural products,
243		-	horticultural products, viticultural products, dairy products,
244		-	livestock, wildlife, poultry, bees, forest products, fish and
245		-	shellfish, any products raised or produced on farms, and any
246		-	products processed or manufactured from products raised or
247		-	produced on farms.
248		-	(4) "Agricultural purpose" means a purpose related to the
249		-	SEA 452 — CC 1 7
250		-	production, harvest, exhibition, marketing, transportation,
251		-	processing, or manufacture of agricultural products by a natural
252		-	person who cultivates, plants, propagates, or nurtures the
253		-	agricultural products.
254		-	(5) "Consumer credit sale" is a sale of goods, services, or an
255		-	interest in land in which:
256		-	(a) credit is granted by a person who engages as a seller in
257		-	credit transactions of the same kind;
258		-	(b) the buyer is a person other than an organization;
259		-	(c) the goods, services, or interest in land are purchased
260		-	primarily for a personal, family, or household purpose;
261		-	(d) either the debt is payable in installments or a credit service
262		-	charge is made; and
263		-	(e) with respect to a sale of goods or services, either:
264		-	(i) the amount of credit extended, the written credit limit, or
265		-	the initial advance does not exceed the exempt threshold
266		-	amount, as adjusted in accordance with the annual
267		-	adjustment of the exempt threshold amount, specified in
268		-	Regulation Z (12 CFR 226.3 or 12 CFR 1026.3(b), as
269		-	applicable); or
270		-	(ii) the debt is secured by personal property used or expected
271		-	to be used as the principal dwelling of the buyer.
272		-	(6) "Credit" means the right granted by a creditor to a debtor to
273		-	defer payment of debt or to incur debt and defer its payment.
274		-	(7) "Creditor" means a person:
275		-	(a) that regularly engages in the extension of first lien
276		-	mortgage transactions that are subject to a credit service
277		-	charge or loan finance charge, as applicable, or are payable by
278		-	written agreement in more than four (4) installments (not
279		-	including a down payment); and
280		-	(b) to which the obligation is initially payable, either on the
281		-	face of the note or contract, or by agreement if there is not a
282		-	note or contract.
283		-	The term does not include a person described in subsection
284		-	(34)(a) in a tablefunded transaction. A creditor may be an
285		-	individual, a limited liability company, a sole proprietorship, a
286		-	partnership, a trust, a joint venture, a corporation, an
287		-	unincorporated organization, or other form of entity, however
288		-	organized.
289		-	(8) "Department" refers to the members of the department of
290		-	financial institutions.
291		-	(9) "Depository institution" has the meaning set forth in the
292		-	SEA 452 — CC 1 8
293		-	Federal Deposit Insurance Act (12 U.S.C. 1813(c)) and includes
294		-	any credit union.
295		-	(10) "Director" refers to the director of the department of financial
296		-	institutions or the director's designee.
297		-	(11) "Dwelling" means a residential structure that contains one
298		-	(1) to four (4) units, regardless of whether the structure is
299		-	attached to real property. The term includes an individual:
300		-	(a) condominium unit;
301		-	(b) cooperative unit;
302		-	(c) mobile home; or
303		-	(d) trailer;
304		-	that is used as a residence.
305		-	(12) "Employee" means an individual who is paid wages or other
306		-	compensation by an employer required under federal income tax
307		-	law to file Form W-2 on behalf of the individual.
308		-	(13) "Federal banking agencies" means the Board of Governors
309		-	of the Federal Reserve System, the Office of the Comptroller of
310		-	the Currency, the Office of Thrift Supervision, the National Credit
311		-	Union Administration, and the Federal Deposit Insurance
312		-	Corporation.
313		-	(14) "First lien mortgage transaction" means:
314		-	(a) a consumer loan; or
315		-	(b) a consumer credit sale;
316		-	that is or will be used by the debtor primarily for personal, family,
317		-	or household purposes and that is secured by a mortgage or a land
318		-	contract (or another consensual security interest equivalent to a
319		-	mortgage or a land contract) that constitutes a first lien on a
320		-	dwelling or on residential real estate upon which a dwelling is
321		-	constructed or intended to be constructed.
322		-	(15) "Immediate family member" means a spouse, child, sibling,
323		-	parent, grandparent, or grandchild. The term includes stepparents,
324		-	stepchildren, stepsiblings, and adoptive relationships.
325		-	(16) "Individual" means a natural person.
326		-	(17) "Licensee" means a person licensed to engage in mortgage
327		-	transactions as a creditor.
328		-	(18) "Loan" includes:
329		-	(a) the creation of debt by:
330		-	(i) the creditor's payment of or agreement to pay money to
331		-	the debtor or to a third party for the account of the debtor; or
332		-	(ii) the extension of credit by a person who engages as a
333		-	seller in credit transactions primarily secured by an interest
334		-	in land;
335		-	SEA 452 — CC 1 9
336		-	(b) the creation of debt by a credit to an account with the
337		-	creditor upon which the debtor is entitled to draw
338		-	immediately; and
339		-	(c) the forbearance of debt arising from a loan.
340		-	(19) "Loan brokerage business" means any activity in which a
341		-	person, in return for any consideration from any source, procures,
342		-	attempts to procure, or assists in procuring, a mortgage
343		-	transaction from a third party or any other person, whether or not
344		-	the person seeking the mortgage transaction actually obtains the
345		-	mortgage transaction.
346		-	(20) "Loan processor or underwriter" means an individual who
347		-	performs clerical or support duties as an employee at the direction
348		-	of, and subject to the supervision and instruction of, a person
349		-	licensed to engage in mortgage transactions or a person exempt
350		-	from licensing. For purposes of this subsection, the term "clerical
351		-	or support duties" may include, after the receipt of an application,
352		-	the following:
353		-	(a) The receipt, collection, distribution, and analysis of
354		-	information common for the processing or underwriting of a
355		-	mortgage transaction.
356		-	(b) The communication with a consumer to obtain the
357		-	information necessary for the processing or underwriting of a
358		-	loan, to the extent that the communication does not include:
359		-	(i) offering or negotiating loan rates or terms; or
360		-	(ii) counseling consumers about mortgage transaction rates
361		-	or terms.
362		-	The term does not include an individual who is an employee
363		-	of a person that is not engaged in mortgage transactions as a
364		-	creditor if that person is permitted to voluntarily register with
365		-	the department to sponsor the individual under section
366		-	202(b)(8) of this chapter to engage solely in the activities
367		-	described in this subdivision.
368		-	(21) "Mortgage loan originator" means an individual who, for
369		-	compensation or gain, or in the expectation of compensation or
370		-	gain, regularly engages in taking a mortgage transaction
371		-	application or in offering or negotiating the terms of a mortgage
372		-	transaction that either is made under this article or under
373		-	IC 24-4.5 or is made by an employee of a person licensed to
374		-	engage in mortgage transactions or by an employee of a person
375		-	that is exempt from licensing, while the employee is engaging in
376		-	the loan brokerage business. The term does not include the
377		-	following:
378		-	SEA 452 — CC 1 10
379		-	(a) An individual engaged solely as a loan processor or
380		-	underwriter as long as the individual works exclusively as an
381		-	employee of a person licensed to engage in mortgage
382		-	transactions or as an employee of a person exempt from
383		-	licensing. However, the term includes an individual who is
384		-	licensed as a mortgage loan originator under this article
385		-	and 750 IAC 9-3 and who is an employee of a person that
386		-	is not engaged in mortgage transactions as a creditor if
387		-	that person voluntarily registers with the department to
388		-	sponsor the individual under section 202(b)(8) of this
389		-	chapter to engage solely as a third party processor or
390		-	underwriter.
391		-	(b) Unless the person or entity is compensated by:
392		-	(i) a creditor;
393		-	(ii) a loan broker;
394		-	(iii) another mortgage loan originator; or
395		-	(iv) any agent of a creditor, a loan broker, or another
396		-	mortgage loan originator described in items (i) through (iii);
397		-	a person or entity that performs only real estate brokerage
398		-	activities and is licensed or registered in accordance with
399		-	applicable state law.
400		-	(c) A person solely involved in extensions of credit relating to
401		-	timeshare plans (as defined in 11 U.S.C. 101(53D)).
402		-	(22) "Mortgage servicer" means the last person to whom a
403		-	mortgagor or the mortgagor's successor in interest has been
404		-	instructed by a mortgagee to send payments on a loan secured by
405		-	a mortgage.
406		-	(23) "Mortgage transaction" means:
407		-	(a) a consumer loan; or
408		-	(b) a consumer credit sale;
409		-	that is or will be used by the debtor primarily for personal, family,
410		-	or household purposes and that is secured by a mortgage or a land
411		-	contract (or another consensual security interest equivalent to a
412		-	mortgage or a land contract) on a dwelling or on residential real
413		-	estate upon which a dwelling is constructed or intended to be
414		-	constructed.
415		-	(24) "Nationwide Multistate Licensing System and Registry" (or
416		-	"Nationwide Mortgage Licensing System and Registry" or
417		-	"NMLSR") means a multistate licensing system owned and
418		-	operated by the State Regulatory Registry, LLC, or by any
419		-	successor or affiliated entity, for the licensing and registration of
420		-	creditors, mortgage loan originators, and other persons in the
421		-	SEA 452 — CC 1 11
422		-	mortgage or financial services industries. The term includes any
423		-	other name or acronym that may be assigned to the system by the
424		-	State Regulatory Registry, LLC, or by any successor or affiliated
425		-	entity.
426		-	(25) "Nontraditional mortgage product" means any mortgage
427		-	product other than a thirty (30) year fixed rate mortgage.
428		-	(26) "Organization" means a corporation, a government or
429		-	government subdivision, an agency, a trust, an estate, a
430		-	partnership, a limited liability company, a cooperative, an
431		-	association, a joint venture, an unincorporated organization, or
432		-	any other entity, however organized.
433		-	(27) "Payable in installments", with respect to a debt or an
434		-	obligation, means that payment is required or permitted by written
435		-	agreement to be made in more than four (4) installments not
436		-	including a down payment.
437		-	(28) "Person" includes an individual or an organization.
438		-	(29) "Principal" of a mortgage transaction means the total of:
439		-	(a) the net amount paid to, receivable by, or paid or payable
440		-	for the account of the debtor; and
441		-	(b) to the extent that payment is deferred, amounts actually
442		-	paid or to be paid by the creditor for registration, certificate of
443		-	title, or license fees if not included in clause (a).
444		-	(30) "Real estate brokerage activity" means any activity that
445		-	involves offering or providing real estate brokerage services to the
446		-	public, including the following:
447		-	(a) Acting as a real estate agent or real estate broker for a
448		-	buyer, seller, lessor, or lessee of real property.
449		-	(b) Bringing together parties interested in the sale, purchase,
450		-	lease, rental, or exchange of real property.
451		-	(c) Negotiating, on behalf of any party, any part of a contract
452		-	relating to the sale, purchase, lease, rental, or exchange of real
453		-	property (other than in connection with providing financing
454		-	with respect to the sale, purchase, lease, rental, or exchange of
455		-	real property).
456		-	(d) Engaging in any activity for which a person engaged in the
457		-	activity is required to be registered or licensed as a real estate
458		-	agent or real estate broker under any applicable law.
459		-	(e) Offering to engage in any activity, or act in any capacity,
460		-	described in this subsection.
461		-	(31) "Registered mortgage loan originator" means any individual
462		-	who:
463		-	(a) meets the definition of mortgage loan originator and is an
464		-	SEA 452 — CC 1 12
465		-	employee of:
466		-	(i) a depository institution;
467		-	(ii) a subsidiary that is owned and controlled by a depository
468		-	institution and regulated by a federal banking agency; or
469		-	(iii) an institution regulated by the Farm Credit
470		-	Administration; and
471		-	(b) is registered with, and maintains a unique identifier
472		-	through, the NMLSR.
473		-	(32) "Residential real estate" means any real property that is
474		-	located in Indiana and on which there is located or intended to be
475		-	constructed a dwelling.
476		-	(33) "Revolving first lien mortgage transaction" means a first lien
477		-	mortgage transaction in which:
478		-	(a) the creditor permits the debtor to obtain advances from
479		-	time to time;
480		-	(b) the unpaid balances of principal, finance charges, and other
481		-	appropriate charges are debited to an account; and
482		-	(c) the debtor has the privilege of paying the balances in
483		-	installments.
484		-	(34) "Tablefunded" means a transaction in which:
485		-	(a) a person closes a first lien mortgage transaction in the
486		-	person's own name as a mortgagee with funds provided by one
487		-	(1) or more other persons; and
488		-	(b) the transaction is assigned, not later than one (1) business
489		-	day after the funding of the transaction, to the mortgage
490		-	creditor providing the funding.
491		-	(35) "Unique identifier" means a number or other identifier
492		-	assigned by protocols established by the NMLSR.
493		-	(36) "Land contract" means a contract for the sale of real estate in
494		-	which the seller of the real estate retains legal title to the real
495		-	estate until the total contract price is paid by the buyer.
496		-	(37) "Bona fide nonprofit organization" means an organization
497		-	that does the following, as determined by the director, under
498		-	criteria established by the director:
499		-	(a) Maintains tax exempt status under Section 501(c)(3) of the
500		-	Internal Revenue Code.
501		-	(b) Promotes affordable housing or provides home ownership
502		-	education or similar services.
503		-	(c) Conducts the organization's activities in a manner that
504		-	serves public or charitable purposes.
505		-	(d) Receives funding and revenue and charges fees in a
506		-	manner that does not encourage the organization or the
507		-	SEA 452 — CC 1 13
508		-	organization's employees to act other than in the best interests
509		-	of the organization's clients.
510		-	(e) Compensates the organization's employees in a manner that
511		-	does not encourage employees to act other than in the best
512		-	interests of the organization's clients.
513		-	(f) Provides to, or identifies for, debtors mortgage transactions
514		-	with terms that are favorable to the debtor (as described in
515		-	section 202(b)(15) 202(b)(16) of this chapter) and comparable
516		-	to mortgage transactions and housing assistance provided
517		-	under government housing assistance programs.
518		-	(g) Maintains certification by the United States Department of
519		-	Housing and Urban Development or employs counselors who
520		-	are certified by the Indiana housing and community
521		-	development authority.
522		-	(38) "Regularly engaged", with respect to a person who extends
523		-	or originates first lien mortgage transactions, refers to a person
524		-	who:
525		-	(a) extended or originated more than five (5) first lien
526		-	mortgage transactions in the preceding calendar year; or
527		-	(b) extends or originates, or will extend or originate, more than
528		-	five (5) first lien mortgage transactions in the current calendar
529		-	year if the person did not extend or originate more than five
530		-	(5) first lien mortgage transactions in the preceding calendar
531		-	year.
532		-	SECTION 4. IC 24-4.4-2-401, AS AMENDED BY P.L.69-2018,
533		-	SECTION 4, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
534		-	JULY 1, 2023]: Sec. 401. (1) Unless a person subject to this article has
535		-	first obtained a mortgage license from the department and annually
536		-	maintains the license, the person shall not engage in Indiana as a
537		-	creditor in first lien mortgage transactions. A separate mortgage license
538		-	is required for each legal entity that engages in Indiana as a creditor in
539		-	first lien mortgage transactions. However, a separate mortgage license
540		-	is not required for each branch of a legal entity licensed by the
541		-	department.
542		-	(2) Each:
543		-	(a) creditor licensed by the department to engage in mortgage
544		-	transactions; and
545		-	(b) entity person exempt from licensing that:
546		-	(i) employs a licensed mortgage loan originator; or
547		-	(ii) sponsors under an exclusive written agreement, as
548		-	permitted by IC 24-4.4-1-202(b)(6)(a), a licensed mortgage
549		-	loan originator as an independent agent; permitted by
550		-	SEA 452 — CC 1 14
551		-	IC 24-4.4-1-202(b)(8) or by 750 IAC 9;
552		-	shall register with and maintain a valid unique identifier issued by the
553		-	NMLSR. Each licensed mortgage loan originator must be employed by,
554		-	or sponsored under an exclusive written agreement (as permitted by
555		-	IC 24-4.4-1-202(b)(6)(a)) and as an independent agent, permitted by
556		-	IC 24-4.4-1-202(b)(8) or by 750 IAC 9, and associated with, a
557		-	licensed creditor (or an entity a person exempt from licensing) that is
558		-	registered with the NMLSR. in order to originate loans.
559		-	(3) An individual engaging solely in loan processor or underwriter
560		-	activities shall not represent to the public, through advertising or other
561		-	means of communicating or providing information, including the use
562		-	of business cards, stationery, brochures, signs, rate lists, or other
563		-	promotional items, that the individual can or will perform any of the
564		-	activities of a mortgage loan originator. An individual who:
565		-	(a) is licensed as a mortgage loan originator under this article
566		-	and 750 IAC 9-3; and
567		-	(b) is sponsored by a person, as permitted by
568		-	IC 24-4.4-1-202(b)(8), to engage solely as a third party loan
569		-	processor or underwriter;
570		-	is subject to the prohibition set forth in this subsection with respect
571		-	to the individual's engagement under the sponsorship.
572		-	(4) Applicants for a mortgage license must apply for the license in
573		-	the form prescribed by the director. Each form:
574		-	(a) must contain content as set forth by rule, instruction, or
575		-	procedure of the director; and
576		-	(b) may be changed or updated as necessary by the director to
577		-	carry out the purposes of this article.
578		-	(5) To fulfill the purposes of this article, the director may establish
579		-	relationships or contracts with the NMLSR or other entities designated
580		-	by the NMLSR to:
581		-	(a) collect and maintain records; and
582		-	(b) process transaction fees or other fees related to licensees or
583		-	other persons subject to this article.
584		-	(6) For the purpose of participating in the NMLSR, the director or
585		-	the department may:
586		-	(a) waive or modify, in whole or in part, by rule or order, any of
587		-	the requirements of this article; and
588		-	(b) establish new requirements as reasonably necessary to
589		-	participate in the NMLSR.
590		-	SECTION 5. IC 24-4.4-2-402.3, AS AMENDED BY P.L.129-2020,
591		-	SECTION 3, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
592		-	JULY 1, 2023]: Sec. 402.3. (1) Each:
593		-	SEA 452 — CC 1 15
594		-	(a) creditor; and
595		-	(b) person that is exempt (either under this article or under
596		-	IC 24-4.5) from licensing to engage in mortgage loans and that:
597		-	(i) employs a licensed mortgage loan originator; or
598		-	(ii) sponsors under an exclusive written agreement, as
599		-	permitted by IC 24-4.4-1-202(b)(6)(a), a licensed mortgage
600		-	loan originator as an independent agent; permitted by
601		-	IC 24-4.4-1-202(b)(8) or by 750 IAC 9;
602		-	must be covered by a surety bond in accordance with this section.
603		-	(2) A surety bond must:
604		-	(a) provide coverage for:
605		-	(i) a creditor; or
606		-	(ii) a person that is exempt from licensing and that employs a
607		-	licensed mortgage loan originator, or that sponsors under an
608		-	exclusive written agreement (as permitted by
609		-	IC 24-4.4-1-202(b)(6)(a)) a licensed mortgage loan originator
610		-	as an independent agent; permitted by IC 24-4.4-1-202(b)(8)
611		-	or by 750 IAC 9;
612		-	in an amount as prescribed in subsection (4);
613		-	(b) be in a form prescribed by the director;
614		-	(c) be in effect:
615		-	(i) during the term of the creditor's license; or
616		-	(ii) at any time during which the person exempt from licensing
617		-	employs a licensed mortgage loan originator or sponsors under
618		-	an exclusive written agreement (as permitted by
619		-	IC 24-4.4-1-202(b)(6)(a)) a licensed mortgage loan originator
620		-	as an independent agent; permitted by IC 24-4.4-1-202(b)(8)
621		-	or by 750 IAC 9;
622		-	as applicable;
623		-	(d) subject to subsection (3), remain in effect during the two (2)
624		-	years after:
625		-	(i) the license of the creditor is surrendered or terminated; or
626		-	(ii) the person exempt from licensing ceases to employ a
627		-	licensed mortgage loan originator, or ceases to sponsor under
628		-	an exclusive written agreement (as permitted by
629		-	IC 24-4.4-1-202(b)(6)(a)) a licensed mortgage loan originator
630		-	as an independent agent, permitted by IC 24-4.4-1-202(b)(8)
631		-	or by 750 IAC 9, or to offer financial services to individuals
632		-	in Indiana, whichever is later;
633		-	as applicable;
634		-	(e) be payable to the department for the benefit of:
635		-	(i) the state; and
636		-	SEA 452 — CC 1 16
637		-	(ii) individuals who reside in Indiana when they agree to
638		-	receive financial services from the creditor or the person
639		-	exempt from licensing, as applicable;
640		-	(f) be issued by a bonding, surety, or insurance company
641		-	authorized to do business in Indiana and rated at least "A-" by at
642		-	least one (1) nationally recognized investment rating service; and
643		-	(g) have payment conditioned upon:
644		-	(i) the creditor's or any of the creditor's licensed mortgage loan
645		-	originators'; or
646		-	(ii) the exempt person's or any of the exempt person's licensed
647		-	mortgage loan originators';
648		-	noncompliance with or violation of this chapter, 750 IAC 9, or
649		-	other federal or state laws or regulations applicable to mortgage
650		-	lending.
651		-	(3) The director may adopt rules or guidance documents with
652		-	respect to the requirements for a surety bond as necessary to
653		-	accomplish the purposes of this article. Upon written request from:
654		-	(a) a creditor described in subsection (1)(a); or
655		-	(b) an exempt person described in subsection (1)(b);
656		-	the director may, at the discretion of the director, waive or shorten the
657		-	two (2) year period set forth in subsection (2)(d) during which a surety
658		-	bond required by this section must remain in effect after the occurrence
659		-	of an event described in subsection (2)(d)(i) or (2)(d)(ii), as applicable.
660		-	(4) The penal sum of the surety bond shall be maintained in an
661		-	amount that reflects the dollar amount of mortgage transactions
662		-	originated as determined by the director. If the principal amount of a
663		-	surety bond required under this section is reduced by payment of a
664		-	claim or judgment, the creditor or exempt person for whom the bond
665		-	is issued shall immediately notify the director of the reduction and, not
666		-	later than thirty (30) days after notice by the director, file a new or an
667		-	additional surety bond in an amount set by the director. The amount of
668		-	the new or additional bond set by the director must be at least the
669		-	amount of the bond before payment of the claim or judgment.
670		-	(5) If for any reason a surety terminates a bond issued under this
671		-	section, the creditor or the exempt person shall immediately notify the
672		-	department and file a new surety bond in an amount determined by the
673		-	director.
674		-	(6) Cancellation of a surety bond issued under this section does not
675		-	affect any liability incurred or accrued during the period when the
676		-	surety bond was in effect.
677		-	(7) The director may obtain satisfaction from a surety bond issued
678		-	under this section if the director incurs expenses, issues a final order,
679		-	SEA 452 — CC 1 17
680		-	or recovers a final judgment under this chapter.
681		-	(8) Notices required under this section must be made in writing and
682		-	submitted through the NMLSR or any other electronic registration
683		-	system that may be approved by the director.
684		-	SECTION 6. IC 24-4.4-2-402.4, AS AMENDED BY P.L.176-2019,
685		-	SECTION 4, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
686		-	JULY 1, 2023]: Sec. 402.4. (1) Subject to subsection (6), the director
687		-	shall designate the NMLSR to serve as the sole entity responsible for:
688		-	(a) processing applications and renewals for mortgage licenses;
689		-	(b) issuing unique identifiers for licensees and entities persons
690		-	exempt from licensing that employ or sponsor a licensed
691		-	mortgage loan originator under this article; and
692		-	(c) performing other services that the director determines are
693		-	necessary for the orderly administration of the department's
694		-	mortgage licensing system.
695		-	(2) Subject to the confidentiality provisions contained in IC 5-14-3,
696		-	this section, and IC 28-1-2-30, the director may regularly report
697		-	significant or recurring violations of this article to the NMLSR.
698		-	(3) Subject to the confidentiality provisions contained in IC 5-14-3,
699		-	this section, and IC 28-1-2-30, the director may report complaints
700		-	received regarding mortgage licensees to the NMLSR.
701		-	(4) The director may report publicly adjudicated licensure actions
702		-	against a licensee to the NMLSR.
703		-	(5) The director shall establish a process in which licensees may
704		-	challenge information reported to the NMLSR by the department.
705		-	(6) The director's authority to designate the NMLSR under
706		-	subsection (1) is subject to the following:
707		-	(a) Information stored in the NMLSR is subject to the
708		-	confidentiality provisions of IC 5-14-3 and IC 28-1-2-30. A
709		-	person may not:
710		-	(i) obtain information from the NMLSR, unless the person is
711		-	authorized to do so by statute;
712		-	(ii) initiate any civil action based on information obtained
713		-	from the NMLSR if the information is not otherwise available
714		-	to the person under any other state law; or
715		-	(iii) initiate any civil action based on information obtained
716		-	from the NMLSR if the person could not have initiated the
717		-	action based on information otherwise available to the person
718		-	under any other state law.
719		-	(b) Documents, materials, and other forms of information in the
720		-	control or possession of the NMLSR that are confidential under
721		-	IC 28-1-2-30 and that are:
722		-	SEA 452 — CC 1 18
723		-	(i) furnished by the director, the director's designee, or a
724		-	licensee; or
725		-	(ii) otherwise obtained by the NMLSR;
726		-	are confidential and privileged by law and are not subject to
727		-	inspection under IC 5-14-3, subject to subpoena, subject to
728		-	discovery, or admissible in evidence in any civil action. However,
729		-	the director may use the documents, materials, or other
730		-	information available to the director in furtherance of any action
731		-	brought in connection with the director's duties under this article.
732		-	(c) Disclosure of documents, materials, and information:
733		-	(i) to the director; or
734		-	(ii) by the director;
735		-	under this subsection does not result in a waiver of any applicable
736		-	privilege or claim of confidentiality with respect to the
737		-	documents, materials, or information.
738		-	(d) Information provided to the NMLSR is subject to IC 4-1-11.
739		-	(e) This subsection does not limit or impair a person's right to:
740		-	(i) obtain information;
741		-	(ii) use information as evidence in a civil action or proceeding;
742		-	or
743		-	(iii) use information to initiate a civil action or proceeding;
744		-	if the information may be obtained from the director or the
745		-	director's designee under any law.
746		-	(f) Except as otherwise provided in the federal Housing and
747		-	Economic Recovery Act of 2008 (Public Law 110-289, Section
748		-	1512), the requirements under any federal law or IC 5-14-3
749		-	regarding the privacy or confidentiality of any information or
750		-	material provided to the NMLSR, and any privilege arising under
751		-	federal or state law, including the rules of any federal or state
752		-	court, with respect to the information or material, continue to
753		-	apply to the information or material after the information or
754		-	material has been disclosed to the NMLSR. The information and
755		-	material may be shared with all state and federal regulatory
756		-	officials with mortgage industry oversight authority without the
757		-	loss of privilege or the loss of confidentiality protections provided
758		-	by federal law or IC 5-14-3.
759		-	(g) For purposes of this section, the director may enter agreements
760		-	or sharing arrangements with other governmental agencies, the
761		-	Conference of State Bank Supervisors, the American Association
762		-	of Residential Mortgage Regulators, or other associations
763		-	representing governmental agencies, as established by rule or
764		-	order of the director.
765		-	SEA 452 — CC 1 19
766		-	(h) Information or material that is subject to a privilege or
767		-	confidentiality under subdivision (f) is not subject to:
768		-	(i) disclosure under any federal or state law governing the
769		-	disclosure to the public of information held by an officer or an
770		-	agency of the federal government or the respective state; or
771		-	(ii) subpoena, discovery, or admission into evidence in any
772		-	private civil action or administrative process, unless with
773		-	respect to any privilege held by the NMLSR with respect to
774		-	the information or material, the person to whom the
775		-	information or material pertains waives, in whole or in part, in
776		-	the discretion of the person, that privilege.
777		-	(i) Any provision of IC 5-14-3 that concerns the disclosure of:
778		-	(i) confidential supervisory information; or
779		-	(ii) any information or material described in subdivision (f);
780		-	and that is inconsistent with subdivision (f) is superseded by this
781		-	section.
782		-	(j) This section does not apply with respect to information or
783		-	material that concerns the employment history of, and publicly
784		-	adjudicated disciplinary and enforcement actions against, a
785		-	person described in section 402(2) of this chapter and that is
786		-	included in the NMLSR for access by the public.
787		-	(k) The director may require a licensee required to submit
788		-	information to the NMLSR to pay a processing fee considered
789		-	reasonable by the director. In determining whether an NMLSR
790		-	processing fee is reasonable, the director shall:
791		-	(i) require review of; and
792		-	(ii) make available;
793		-	the audited financial statements of the NMLSR.
794		-	(7) Notwithstanding any other provision of law, any:
795		-	(a) application, renewal, or other form or document that:
796		-	(i) relates to mortgage licenses issued by the department; and
797		-	(ii) is made or produced in an electronic format;
798		-	(b) document filed as an electronic record in a multistate
799		-	automated repository established and operated for the licensing or
800		-	registration of mortgage lenders, brokers, or loan originators; or
801		-	(c) electronic record filed through the NMLSR;
802		-	is considered a valid original document when reproduced in paper form
803		-	by the department.
804		-	SECTION 7. IC 24-4.4-2-405, AS AMENDED BY P.L.69-2018,
805		-	SECTION 9, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
806		-	JULY 1, 2023]: Sec. 405. (1) Every licensee shall maintain records in
807		-	a manner that will enable the department to determine whether the
808		-	SEA 452 — CC 1 20
809		-	licensee is complying with this article. The record keeping system of
810		-	a licensee is sufficient if the licensee makes the required information
811		-	reasonably available. The department shall determine the sufficiency
812		-	of the records and whether the licensee has made the required
813		-	information reasonably available. The department shall be given free
814		-	access to the records wherever the records are located. Records
815		-	concerning any first lien mortgage transaction shall be retained for two
816		-	(2) years after the making of the final entry relating to the transaction,
817		-	but in the case of a revolving first lien mortgage transaction, the two (2)
818		-	years required under this subsection is measured from the date of each
819		-	entry relating to the transaction. A federal savings bank person that
820		-	voluntarily registers with the department under
821		-	IC 24-4.4-1-202(b)(6)(a) IC 24-4.4-1-202(b)(8) for the purpose of
822		-	sponsoring under an exclusive written agreement, licensed mortgage
823		-	loan originators as independent agents shall:
824		-	(a) cooperate with the department; and
825		-	(b) provide access to records and documents;
826		-	as required by the department in carrying out examinations of the
827		-	activities of the licensed mortgage loan originators sponsored by the
828		-	federal savings bank. person.
829		-	(2) The unique identifier of any person originating a mortgage
830		-	transaction must be clearly shown on all mortgage transaction
831		-	application forms and any other documents as required by the director.
832		-	(3) Every licensee shall use automated examination and regulatory
833		-	software designated by the director, including third party software. Use
834		-	of the software consistent with guidance and policies issued by the
835		-	director is not a violation of IC 28-1-2-30.
836		-	(4) Each:
837		-	(a) creditor licensed to engage in mortgage transactions by the
838		-	department; and
839		-	(b) entity person that is exempt from licensing and that:
840		-	(i) employs one (1) or more licensed mortgage loan
841		-	originators; or
842		-	(ii) sponsors under an exclusive written agreement, as
843		-	permitted by IC 24-4.4-1-202(b)(6)(a), one (1) or more
844		-	licensed mortgage originators as independent agents;
845		-	permitted by IC 24-4.4-1-202(b)(8) or by 750 IAC 9;
846		-	shall submit to the NMLSR reports of condition, which must be in a
847		-	form and must contain information as required by the NMLSR.
848		-	(5) Each:
849		-	(a) creditor licensed by the department to engage in mortgage
850		-	transactions; and
851		-	SEA 452 — CC 1 21
852		-	(b) entity person that is exempt from licensing by the department
853		-	to engage in mortgage transactions and that:
854		-	(i) employs one (1) or more licensed mortgage loan
855		-	originators; or
856		-	(ii) sponsors under an exclusive written agreement, as
857		-	permitted by IC 24-4.4-1-202(b)(6)(a), one (1) or more
858		-	licensed mortgage loan originators as independent agents;
859		-	permitted by IC 24-4.4-1-202(b)(8) or by 750 IAC 9;
860		-	shall file with the department additional financial statements relating
861		-	to all first lien mortgage transactions originated by the licensed creditor
862		-	or the exempt entity person as required by the department, but not
863		-	more frequently than annually, in the form prescribed by the
864		-	department.
865		-	(6) A licensed creditor shall file notification with the department if
866		-	the licensee:
867		-	(a) has a change in name, address, or any of its principals;
868		-	(b) opens a new branch, closes an existing branch, or relocates an
869		-	existing branch;
870		-	(c) files for bankruptcy or reorganization; or
871		-	(d) is subject to revocation or suspension proceedings by a state
872		-	or governmental authority with regard to the licensed creditor's
873		-	activities;
874		-	not later than thirty (30) days after the date of the event described in
875		-	this subsection.
876		-	(7) A licensee shall file notification with the department if the
877		-	licensee or any director, executive officer, or manager of the licensee
878		-	has been convicted of a felony under the laws of Indiana or any other
879		-	jurisdiction. The licensee shall file the notification required by this
880		-	subsection not later than thirty (30) days after the date of the event
881		-	described in this subsection.
882		-	(8) A licensee shall file notification with the department if the
883		-	licensee or any director, executive officer, or manager of the licensee
884		-	has had the person's authority to do business in the securities,
885		-	commodities, banking, financial services, insurance, real estate, or real
886		-	estate appraisal industry revoked or suspended by Indiana or by any
887		-	other state, federal, or foreign governmental agency or self regulatory
888		-	organization. The licensee shall file the notification required by this
889		-	subsection not later than thirty (30) days after the date of the event
890		-	described in this subsection.
891		-	SECTION 8. IC 24-4.5-1-102, AS AMENDED BY P.L.29-2022,
892		-	SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
893		-	JULY 1, 2023]: Sec. 102. (1) This article shall be liberally construed
894		-	SEA 452 — CC 1 22
895		-	and applied to promote its underlying purposes and policies.
896		-	(2) The underlying purposes and policies of this article are:
897		-	(a) to simplify, clarify, and modernize the law governing retail
898		-	installment sales, consumer credit, small loans, and usury;
899		-	(b) to provide rate ceilings to assure an adequate supply of credit
900		-	to consumers;
901		-	(c) to further consumer understanding of the terms of credit
902		-	transactions and to foster competition among suppliers of
903		-	consumer credit so that consumers may obtain credit at
904		-	reasonable cost;
905		-	(d) to protect consumer buyers, lessees, and borrowers against
906		-	unfair practices by some suppliers of consumer credit, having due
907		-	regard for the interests of legitimate and scrupulous creditors;
908		-	(e) to permit and encourage the development of fair and
909		-	economically sound consumer credit practices;
910		-	(f) to conform the regulation of consumer credit transactions to
911		-	the policies of the Consumer Credit Protection Act (15 U.S.C.
912		-	1601 et seq.) and to applicable state and federal laws, rules,
913		-	regulations, policies, and guidance; and
914		-	(g) to make uniform the law, including administrative rules
915		-	among the various jurisdictions.
916		-	(3) A reference to a requirement imposed by this article includes
917		-	reference to a related rule or guidance of the department adopted
918		-	pursuant to this article.
919		-	(4) A reference to a federal law in this article is a reference to the
920		-	law as in effect December 31, 2021. 2022.
921		-	(5) This article applies to a transaction if the director determines
922		-	that the transaction:
923		-	(a) is in substance a disguised consumer credit transaction; or
924		-	(b) involves the application of subterfuge for the purpose of
925		-	avoiding this article.
926		-	A determination by the director under this subsection must be in
927		-	writing and shall be delivered to all parties to the transaction.
928		-	IC 4-21.5-3 applies to a determination made under this subsection.
929		-	(6) The authority of this article remains in effect, whether a licensee,
930		-	an individual, or a person subject to this article acts or claims to act
931		-	under any licensing or registration law of this state, or claims to act
932		-	without such authority.
933		-	(7) A violation of a state or federal law, regulation, or rule
934		-	applicable to consumer credit transactions is a violation of this article.
935		-	(8) The department may enforce penalty provisions set forth in 15
936		-	U.S.C. 1640 for violations of disclosure requirements applicable to
937		-	SEA 452 — CC 1 23
938		-	mortgage transactions.
939		-	SECTION 9. IC 24-4.5-1-301.5, AS AMENDED BY P.L.176-2019,
940		-	SECTION 12, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
941		-	JULY 1, 2023]: Sec. 301.5. In addition to definitions appearing in
942		-	subsequent chapters in this article, the following definitions apply
943		-	throughout this article:
944		-	(1) "Affiliate", with respect to any person subject to this article,
945		-	means a person that, directly or indirectly, through one (1) or more
946		-	intermediaries:
947		-	(a) controls;
948		-	(b) is controlled by; or
949		-	(c) is under common control with;
950		-	the person subject to this article.
951		-	(2) "Agreement" means the bargain of the parties in fact as found in
952		-	their language or by implication from other circumstances, including
953		-	course of dealing or usage of trade or course of performance.
954		-	(3) "Agricultural purpose" means a purpose related to the
955		-	production, harvest, exhibition, marketing, transportation, processing,
956		-	or manufacture of agricultural products by a natural person who
957		-	cultivates, plants, propagates, or nurtures the agricultural products.
958		-	"Agricultural products" includes agricultural, horticultural, viticultural,
959		-	and dairy products, livestock, wildlife, poultry, bees, forest products,
960		-	fish and shellfish, and any and all products raised or produced on farms
961		-	and any processed or manufactured products thereof.
962		-	(4) "Average daily balance" means the sum of each of the daily
963		-	balances in a billing cycle divided by the number of days in the billing
964		-	cycle, and if the billing cycle is a month, the creditor may elect to treat
965		-	the number of days in each billing cycle as thirty (30).
966		-	(5) "Closing costs" with respect to a subordinate lien mortgage
967		-	transaction includes:
968		-	(a) fees or premiums for title examination, title insurance, or
969		-	similar purposes, including surveys;
970		-	(b) fees for preparation of a deed, settlement statement, or other
971		-	documents;
972		-	(c) escrows for future payments of taxes and insurance;
973		-	(d) fees for notarizing deeds and other documents;
974		-	(e) appraisal fees; and
975		-	(f) fees for credit reports.
976		-	(6) "Conspicuous" refers to a term or clause when it is so written
977		-	that a reasonable person against whom it is to operate ought to have
978		-	noticed it.
979		-	(7) "Consumer credit" means credit offered or extended to a
980		-	SEA 452 — CC 1 24
981		-	consumer primarily for a personal, family, or household purpose.
982		-	(8) "Consumer credit sale" is a sale of goods, services, or an interest
983		-	in land in which:
984		-	(a) credit is granted by a person who regularly engages as a seller
985		-	in credit transactions of the same kind;
986		-	(b) the buyer is a person other than an organization;
987		-	(c) the goods, services, or interest in land are purchased primarily
988		-	for a personal, family, or household purpose;
989		-	(d) either the debt is payable in installments or a credit service
990		-	charge is made; and
991		-	(e) with respect to a sale of goods or services, either:
992		-	(i) the amount of credit extended, the written credit limit, or
993		-	the initial advance does not exceed the exempt threshold
994		-	amount, as adjusted in accordance with the annual adjustment
995		-	of the exempt threshold amount, specified in Regulation Z (12
996		-	CFR 226.3 or 12 CFR 1026.3(b), as applicable); or
997		-	(ii) the debt is secured by personal property used or expected
998		-	to be used as the principal dwelling of the buyer.
999		-	Unless the sale is made subject to this article by agreement
1000		-	(IC 24-4.5-2-601), "consumer credit sale" does not include a sale
1001		-	in which the seller allows the buyer to purchase goods or services
1002		-	pursuant to a lender credit card or similar arrangement or, except
1003		-	as provided with respect to disclosure (IC 24-4.5-2-301), debtors'
1004		-	remedies (IC 24-4.5-5-201), providing payoff amounts
1005		-	(IC 24-4.5-2-209), and powers and functions of the department
1006		-	(IC 24-4.5-6), a sale of an interest in land which is a first lien
1007		-	mortgage transaction.
1008		-	(9) "Consumer loan" means a loan made by a person regularly
1009		-	engaged in the business of making loans in which:
1010		-	(a) the debtor is a person other than an organization;
1011		-	(b) the debt is primarily for a personal, family, or household
1012		-	purpose;
1013		-	(c) either the debt is payable in installments or a loan finance
1014		-	charge is made; and
1015		-	(d) either:
1016		-	(i) the amount of credit extended, the written credit limit, or
1017		-	the initial advance does not exceed the exempt threshold
1018		-	amount, as adjusted in accordance with the annual adjustment
1019		-	of the exempt threshold amount, specified in Regulation Z (12
1020		-	CFR 226.3 or 12 CFR 1026.3(b), as applicable); or
1021		-	(ii) the debt is secured by an interest in land or by personal
1022		-	property used or expected to be used as the principal dwelling
1023		-	SEA 452 — CC 1 25
1024		-	of the debtor.
1025		-	Except as described in IC 24-4.5-3-105, the term does not include a
1026		-	first lien mortgage transaction.
1027		-	(10) "Credit" means the right granted by a creditor to a debtor to
1028		-	defer payment of debt or to incur debt and defer its payment.
1029		-	(11) "Creditor" means a person:
1030		-	(a) who regularly engages in the extension of consumer credit that
1031		-	is subject to a credit service charge or loan finance charge, as
1032		-	applicable, or is payable by written agreement in more than four
1033		-	(4) installments (not including a down payment); and
1034		-	(b) to whom the obligation is initially payable, either on the face
1035		-	of the note or contract, or by agreement when there is not a note
1036		-	or contract.
1037		-	(12) "Depository institution" has the meaning set forth in the
1038		-	Federal Deposit Insurance Act (12 U.S.C. 1813(c)) and includes any
1039		-	credit union.
1040		-	(13) "Director" means the director of the department of financial
1041		-	institutions or the director's designee.
1042		-	(14) "Dwelling" means a residential structure that contains one (1)
1043		-	to four (4) units, regardless of whether the structure is attached to real
1044		-	property. The term includes an individual:
1045		-	(a) condominium unit;
1046		-	(b) cooperative unit;
1047		-	(c) mobile home; or
1048		-	(d) trailer;
1049		-	that is used as a residence.
1050		-	(15) "Earnings" means compensation paid or payable for personal
1051		-	services, whether denominated as wages, salary, commission, bonus,
1052		-	or otherwise, and includes periodic payments under a pension or
1053		-	retirement program.
1054		-	(16) "Employee" means an individual who is paid wages or other
1055		-	compensation by an employer required under federal income tax law
1056		-	to file Form W-2 on behalf of the individual.
1057		-	(17) "Federal banking agencies" means the Board of Governors of
1058		-	the Federal Reserve System, the Office of the Comptroller of the
1059		-	Currency, the National Credit Union Administration, and the Federal
1060		-	Deposit Insurance Corporation.
1061		-	(18) "First lien mortgage transaction" means:
1062		-	(a) a consumer loan; or
1063		-	(b) a consumer credit sale;
1064		-	that is or will be used by the debtor primarily for personal, family, or
1065		-	household purposes and that is secured by a mortgage or a land
1066		-	SEA 452 — CC 1 26
1067		-	contract (or another consensual security interest equivalent to a
1068		-	mortgage or a land contract) that constitutes a first lien on a dwelling
1069		-	or on residential real estate upon which a dwelling is constructed or
1070		-	intended to be constructed.
1071		-	(19) "Immediate family member" means a spouse, child, sibling,
1072		-	parent, grandparent, or grandchild. The term includes stepparents,
1073		-	stepchildren, stepsiblings, and adoptive relationships.
1074		-	(20) "Individual" means a natural person.
1075		-	(21) "Lender credit card or similar arrangement" means an
1076		-	arrangement or loan agreement, other than a seller credit card, pursuant
1077		-	to which a lender gives a debtor the privilege of using a credit card,
1078		-	letter of credit, or other credit confirmation or identification in
1079		-	transactions out of which debt arises:
1080		-	(a) by the lender's honoring a draft or similar order for the
1081		-	payment of money drawn or accepted by the debtor;
1082		-	(b) by the lender's payment or agreement to pay the debtor's
1083		-	obligations; or
1084		-	(c) by the lender's purchase from the obligee of the debtor's
1085		-	obligations.
1086		-	(22) "Licensee" means a person licensed as a creditor under this
1087		-	article.
1088		-	(23) "Loan brokerage business" means any activity in which a
1089		-	person, in return for any consideration from any source, procures,
1090		-	attempts to procure, or assists in procuring, a mortgage transaction
1091		-	from a third party or any other person, whether or not the person
1092		-	seeking the mortgage transaction actually obtains the mortgage
1093		-	transaction.
1094		-	(24) "Loan processor or underwriter" means an individual who
1095		-	performs clerical or support duties as an employee at the direction of,
1096		-	and subject to the supervision and instruction of, a person licensed to
1097		-	engage in mortgage transactions or a person exempt from licensing. For
1098		-	purposes of this subsection, the term "clerical or support duties" may
1099		-	include, after the receipt of an application, the following:
1100		-	(a) The receipt, collection, distribution, and analysis of
1101		-	information common for the processing or underwriting of a
1102		-	mortgage transaction.
1103		-	(b) The communication with a consumer to obtain the information
1104		-	necessary for the processing or underwriting of a loan, to the
1105		-	extent that the communication does not include:
1106		-	(i) offering or negotiating loan rates or terms; or
1107		-	(ii) counseling consumers about mortgage transaction rates or
1108		-	terms.
1109		-	SEA 452 — CC 1 27
1110		-	The term does not include an individual who is an employee of a
1111		-	person that is not engaged in mortgage transactions as a creditor
1112		-	if that person is permitted to voluntarily register with the
1113		-	department to sponsor the individual under IC 24-4.4-1-202(b)(8)
1114		-	to engage solely in the activities described in this subdivision. An
1115		-	individual engaging solely in loan processor or underwriter activities
1116		-	shall not represent to the public through advertising or other means of
1117		-	communicating or providing information, including the use of business
1118		-	cards, stationery, brochures, signs, rate lists, or other promotional
1119		-	items, that the individual can or will perform any of the activities of a
1120		-	mortgage loan originator. However, an individual who is licensed as
1121		-	a mortgage loan originator under IC 24-4.4 and 750 IAC 9-3, and
1122		-	who is sponsored by a person, as permitted by
1123		-	IC 24-4.4-1-202(b)(8), to engage solely as a third party loan
1124		-	processor or underwriter, is subject to the prohibition set forth in
1125		-	this subdivision with respect to the individual's engagement under
1126		-	the sponsorship.
1127		-	(25) "Mortgage loan originator" means an individual who, for
1128		-	compensation or gain, or in the expectation of compensation or gain,
1129		-	regularly engages in taking a mortgage transaction application or in
1130		-	offering or negotiating the terms of a mortgage transaction that either
1131		-	is made under this article or under IC 24-4.4 or is made by an employee
1132		-	of a person licensed to engage in mortgage transactions or by an
1133		-	employee of a person that is exempt from licensing, while the employee
1134		-	is engaging in the loan brokerage business. The term does not include
1135		-	the following:
1136		-	(a) An individual engaged solely as a loan processor or
1137		-	underwriter as long as the individual works exclusively as an
1138		-	employee of a person licensed to engage in mortgage transactions
1139		-	or as an employee of a person exempt from licensing. However,
1140		-	the term includes an individual who is licensed as a mortgage
1141		-	loan originator under IC 24-4.4 and 750 IAC 9-3 and who is
1142		-	an employee of a person that is not engaged in mortgage
1143		-	transactions as a creditor if that person voluntarily registers
1144		-	with the department to sponsor the individual under
1145		-	IC 24-4.4-1-202(b)(8), to engage solely as a third party
1146		-	processor or underwriter.
1147		-	(b) Unless the person or entity is compensated by:
1148		-	(i) a creditor;
1149		-	(ii) a loan broker;
1150		-	(iii) another mortgage loan originator; or
1151		-	(iv) any agent of the creditor, loan broker, or other mortgage
1152		-	SEA 452 — CC 1 28
1153		-	loan originator described in items (i) through (iii);
1154		-	a person or entity that only performs real estate brokerage
1155		-	activities and is licensed or registered in accordance with
1156		-	applicable state law.
1157		-	(c) A person solely involved in extensions of credit relating to
1158		-	timeshare plans (as defined in 11 U.S.C. 101(53D)).
1159		-	(26) "Mortgage servicer" means the last person to whom a
1160		-	mortgagor or the mortgagor's successor in interest has been instructed
1161		-	by a mortgagee to send payments on a loan secured by a mortgage.
1162		-	(27) "Mortgage transaction" means:
1163		-	(a) a consumer loan; or
1164		-	(b) a consumer credit sale;
1165		-	that is or will be used by the debtor primarily for personal, family, or
1166		-	household purposes and that is secured by a mortgage or a land
1167		-	contract (or another consensual security interest equivalent to a
1168		-	mortgage or a land contract) on a dwelling or on residential real estate
1169		-	upon which a dwelling is constructed or intended to be constructed.
1170		-	(28) "Nationwide Multistate Licensing System and Registry" (or
1171		-	"Nationwide Mortgage Licensing System and Registry" or "NMLSR")
1172		-	means a multistate licensing system owned and operated by the State
1173		-	Regulatory Registry, LLC, or by any successor or affiliated entity, for
1174		-	the licensing and registration of creditors, mortgage loan originators,
1175		-	and other persons in the mortgage or financial services industries. The
1176		-	term includes any other name or acronym that may be assigned to the
1177		-	system by the State Regulatory Registry, LLC, or by any successor or
1178		-	affiliated entity.
1179		-	(29) "Nontraditional mortgage product" means any mortgage
1180		-	product other than a thirty (30) year fixed rate mortgage.
1181		-	(30) "Official fees" means:
1182		-	(a) fees and charges prescribed by law which actually are or will
1183		-	be paid to public officials for determining the existence of or for
1184		-	perfecting, releasing, or satisfying a security interest related to a
1185		-	consumer credit sale, consumer lease, or consumer loan; or
1186		-	(b) premiums payable for insurance in lieu of perfecting a security
1187		-	interest otherwise required by the creditor in connection with the
1188		-	sale, lease, or loan, if the premium does not exceed the fees and
1189		-	charges described in subdivision (a) that would otherwise be
1190		-	payable.
1191		-	(31) "Organization" means a corporation, a government or
1192		-	governmental subdivision, an agency, a trust, an estate, a partnership,
1193		-	a limited liability company, a cooperative, an association, a joint
1194		-	venture, an unincorporated organization, or any other entity, however
1195		-	SEA 452 — CC 1 29
1196		-	organized.
1197		-	(32) "Payable in installments" means that payment is required or
1198		-	permitted by written agreement to be made in more than four (4)
1199		-	installments not including a down payment.
1200		-	(33) "Person" includes an individual or an organization.
1201		-	(34) "Person related to" with respect to an individual means:
1202		-	(a) the spouse of the individual;
1203		-	(b) a brother, brother-in-law, sister, or sister-in-law of the
1204		-	individual;
1205		-	(c) an ancestor or lineal descendants of the individual or the
1206		-	individual's spouse; and
1207		-	(d) any other relative, by blood or marriage, of the individual or
1208		-	the individual's spouse who shares the same home with the
1209		-	individual.
1210		-	(35) "Person related to" with respect to an organization means:
1211		-	(a) a person directly or indirectly controlling, controlled by, or
1212		-	under common control with the organization;
1213		-	(b) a director, an executive officer, or a manager of the
1214		-	organization or a person performing similar functions with respect
1215		-	to the organization or to a person related to the organization;
1216		-	(c) the spouse of a person related to the organization; and
1217		-	(d) a relative by blood or marriage of a person related to the
1218		-	organization who shares the same home with the person.
1219		-	(36) "Presumed" or "presumption" means that the trier of fact must
1220		-	find the existence of the fact presumed, unless and until evidence is
1221		-	introduced that would support a finding of its nonexistence.
1222		-	(37) "Real estate brokerage activity" means any activity that
1223		-	involves offering or providing real estate brokerage services to the
1224		-	public, including the following:
1225		-	(a) Acting as a real estate agent or real estate broker for a buyer,
1226		-	seller, lessor, or lessee of real property.
1227		-	(b) Bringing together parties interested in the sale, purchase,
1228		-	lease, rental, or exchange of real property.
1229		-	(c) Negotiating, on behalf of any party, any part of a contract
1230		-	relating to the sale, purchase, lease, rental, or exchange of real
1231		-	property (other than in connection with providing financing with
1232		-	respect to the sale, purchase, lease, rental, or exchange of real
1233		-	property).
1234		-	(d) Engaging in any activity for which a person is required to be
1235		-	registered or licensed as a real estate agent or real estate broker
1236		-	under any applicable law.
1237		-	(e) Offering to engage in any activity, or act in any capacity,
1238		-	SEA 452 — CC 1 30
1239		-	described in this subsection.
1240		-	(38) "Registered mortgage loan originator" means any individual
1241		-	who:
1242		-	(a) meets the definition of mortgage loan originator and is an
1243		-	employee of:
1244		-	(i) a depository institution;
1245		-	(ii) a subsidiary that is owned and controlled by a depository
1246		-	institution and regulated by a federal banking agency; or
1247		-	(iii) an institution regulated by the Farm Credit
1248		-	Administration; and
1249		-	(b) is registered with, and maintains a unique identifier through,
1250		-	the NMLSR.
1251		-	(39) "Regularly engaged", with respect to a person who extends
1252		-	consumer credit, refers to a person who:
1253		-	(a) extended consumer credit:
1254		-	(i) more than twenty-five (25) times; or
1255		-	(ii) more than five (5) times for a mortgage transaction secured
1256		-	by a dwelling;
1257		-	in the preceding calendar year; or
1258		-	(b) extends or will extend consumer credit:
1259		-	(i) more than twenty-five (25) times; or
1260		-	(ii) more than five (5) times for a mortgage transaction secured
1261		-	by a dwelling;
1262		-	in the current calendar year, if the person did not meet the
1263		-	numerical standards described in subdivision (a) in the preceding
1264		-	calendar year.
1265		-	(40) "Residential real estate" means any real property that is located
1266		-	in Indiana and on which there is located or intended to be constructed
1267		-	a dwelling.
1268		-	(41) "Seller credit card" means an arrangement that gives to a buyer
1269		-	or lessee the privilege of using a credit card, letter of credit, or other
1270		-	credit confirmation or identification for the purpose of purchasing or
1271		-	leasing goods or services from that person, a person related to that
1272		-	person, or from that person and any other person. The term includes a
1273		-	card that is issued by a person, that is in the name of the seller, and that
1274		-	can be used by the buyer or lessee only for purchases or leases at
1275		-	locations of the named seller.
1276		-	(42) "Subordinate lien mortgage transaction" means:
1277		-	(a) a consumer loan; or
1278		-	(b) a consumer credit sale;
1279		-	that is or will be used by the debtor primarily for personal, family, or
1280		-	household purposes and that is secured by a mortgage or a land
1281		-	SEA 452 — CC 1 31
1282		-	contract (or another consensual security interest equivalent to a
1283		-	mortgage or a land contract) that constitutes a subordinate lien on a
1284		-	dwelling or on residential real estate upon which a dwelling is
1285		-	constructed or intended to be constructed.
1286		-	(43) "Unique identifier" means a number or other identifier assigned
1287		-	by protocols established by the NMLSR.
1288		-	(44) "Land contract" means a contract for the sale of real estate in
1289		-	which the seller of the real estate retains legal title to the real estate
1290		-	until the total contract price is paid by the buyer.
1291		-	(45) "Bona fide nonprofit organization" means an organization that
1292		-	does the following, as determined by the director under criteria
1293		-	established by the director:
1294		-	(a) Maintains tax exempt status under Section 501(c)(3) of the
1295		-	Internal Revenue Code.
1296		-	(b) Promotes affordable housing or provides home ownership
1297		-	education or similar services.
1298		-	(c) Conducts the organization's activities in a manner that serves
1299		-	public or charitable purposes.
1300		-	(d) Receives funding and revenue and charges fees in a manner
1301		-	that does not encourage the organization or the organization's
1302		-	employees to act other than in the best interests of the
1303		-	organization's clients.
1304		-	(e) Compensates the organization's employees in a manner that
1305		-	does not encourage employees to act other than in the best
1306		-	interests of the organization's clients.
1307		-	(f) Provides to, or identifies for, debtors mortgage transactions
1308		-	with terms that are favorable to the debtor (as described in section
1309		-	202(b)(15) of this chapter) and comparable to mortgage
1310		-	transactions and housing assistance provided under government
1311		-	housing assistance programs.
1312		-	(g) Maintains certification by the United States Department of
1313		-	Housing and Urban Development or employs counselors who are
1314		-	certified by the Indiana housing and community development
1315		-	authority.
1316		-	SECTION 10. IC 24-4.5-3-502.1, AS AMENDED BY P.L.69-2018,
1317		-	SECTION 19, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
1318		-	JULY 1, 2023]: Sec. 502.1. (1) A person that is a:
1319		-	(a) depository institution;
1320		-	(b) subsidiary that is owned and controlled by a depository
1321		-	institution and regulated by a federal banking agency; or
1322		-	(c) credit union service organization;
1323		-	may engage in Indiana in the making of subordinate lien mortgage
1324		-	SEA 452 — CC 1 32
1325		-	transactions without obtaining a mortgage license issued by the
1326		-	department.
1327		-	(2) A collection agency licensed under IC 25-11-1 or an institution
1328		-	regulated by the Farm Credit Administration may engage in:
1329		-	(a) taking assignments of subordinate lien mortgage transactions;
1330		-	and
1331		-	(b) undertaking the direct collection of payments from or the
1332		-	enforcement of rights against debtors arising from subordinate
1333		-	lien mortgage transactions;
1334		-	in Indiana without obtaining a mortgage license issued by the
1335		-	department.
1336		-	(3) A person that is not otherwise exempt under subsection (1) or
1337		-	(2) shall acquire and retain a mortgage license issued by the
1338		-	department in order to regularly engage in Indiana in the following
1339		-	actions with respect to subordinate lien mortgage transactions:
1340		-	(a) The making of subordinate lien mortgage loans.
1341		-	(b) Taking assignments of subordinate lien mortgage loans.
1342		-	(c) Undertaking the direct collection of payments from or the
1343		-	enforcement of rights against debtors arising from subordinate
1344		-	lien mortgage loans.
1345		-	(4) Each:
1346		-	(a) creditor licensed by the department to engage in subordinate
1347		-	lien mortgage transactions; and
1348		-	(b) entity person that is exempt (either under this article or under
1349		-	IC 24-4.4-1-202(b)(6)(a)) IC 24-4.4-1-202(b)(8)) from licensing
1350		-	and that:
1351		-	(i) employs a licensed mortgage loan originator; or
1352		-	(ii) sponsors under an exclusive written agreement, as
1353		-	permitted by IC 24-4.4-1-202(b)(6)(a), a licensed mortgage
1354		-	loan originator as an independent agent; permitted by
1355		-	IC 24-4.4-1-202(b)(8) or by 750 IAC 9;
1356		-	shall register with and maintain a valid unique identifier issued by the
1357		-	NMLSR. Each licensed mortgage loan originator must be employed by,
1358		-	or sponsored under an exclusive written agreement (as permitted by
1359		-	IC 24-4.4-1-202(b)(6)(a)) and as an independent agent, permitted by
1360		-	IC 24-4.4-1-202(b)(8) or by 750 IAC 9, and associated with, a
1361		-	licensed creditor (or an exempt entity person described under
1362		-	subdivision (b)) that is registered with the NMLSR. in order to
1363		-	originate loans.
1364		-	(5) Applicants for a mortgage license must apply to the department
1365		-	for the license in a form prescribed by the director. Each form:
1366		-	(a) must contain content as set forth by rule, instruction, or
1367		-	SEA 452 — CC 1 33
1368		-	procedure of the director; and
1369		-	(b) may be changed or updated as necessary by the director to
1370		-	carry out the purposes of this article.
1371		-	(6) To fulfill the purposes of this article, the director may establish
1372		-	relationships or contracts with the NMLSR or other entities designated
1373		-	by the NMLSR to:
1374		-	(a) collect and maintain records; and
1375		-	(b) process transaction fees or other fees;
1376		-	related to licensees or other persons subject to this article.
1377		-	(7) For the purpose of participating in the NMLSR, the director or
1378		-	the department may:
1379		-	(a) waive or modify, in whole or in part, by rule, regulation, or
1380		-	order, any or all of the requirements of this article; and
1381		-	(b) establish new requirements as reasonably necessary to
1382		-	participate in the NMLSR.
1383		-	SECTION 11. IC 24-4.5-3-503.3, AS AMENDED BY
1384		-	P.L.129-2020, SECTION 7, IS AMENDED TO READ AS FOLLOWS
1385		-	[EFFECTIVE JULY 1, 2023]: Sec. 503.3. (1) Each:
1386		-	(a) creditor licensed by the department to engage in mortgage
1387		-	transactions; and
1388		-	(b) person that is exempt (either under this article or under
1389		-	IC 24-4.4-1-202(b)(6)(a)) or IC 24-4.4-1-202(b)(8)) from
1390		-	licensing and that:
1391		-	(i) employs a licensed mortgage loan originator; or
1392		-	(ii) sponsors under an exclusive written agreement, as
1393		-	permitted by IC 24-4.4-1-202(b)(6)(a), a licensed mortgage
1394		-	loan originator as an independent agent; permitted by
1395		-	IC 24-4.4-1-202(b)(8) or by 750 IAC 9;
1396		-	must be covered by a surety bond in accordance with this section.
1397		-	(2) A surety bond must:
1398		-	(a) provide coverage for:
1399		-	(i) a creditor described in subsection (1)(a); and
1400		-	(ii) an exempt person described in subsection (1)(b);
1401		-	in an amount as prescribed in subsection (4);
1402		-	(b) be in a form as prescribed by the director;
1403		-	(c) be in effect:
1404		-	(i) during the term of the creditor's license; or
1405		-	(ii) at any time during which the person exempt from licensing
1406		-	employs a licensed mortgage loan originator, or sponsors
1407		-	under an exclusive written agreement (as permitted by
1408		-	IC 24-4.4-1-202(b)(6)(a)) a licensed mortgage loan originator
1409		-	as an independent agent; permitted by IC 24-4.4-1-202(b)(8)
1410		-	SEA 452 — CC 1 34
1411		-	or by 750 IAC 9;
1412		-	as applicable;
1413		-	(d) subject to subsection (3), remain in effect during the two (2)
1414		-	years after:
1415		-	(i) the license of the creditor is surrendered or terminated; or
1416		-	(ii) the person exempt from licensing ceases to employ a
1417		-	licensed mortgage loan originator, or ceases to sponsor under
1418		-	an exclusive written agreement (as permitted by
1419		-	IC 24-4.4-1-202(b)(6)(a)) a licensed mortgage loan originator
1420		-	as an independent agent, permitted by IC 24-4.4-1-202(b)(8)
1421		-	or by 750 IAC 9, or to offer financial services to individuals
1422		-	in Indiana, whichever is later;
1423		-	as applicable;
1424		-	(e) be payable to the department for the benefit of:
1425		-	(i) the state; and
1426		-	(ii) individuals who reside in Indiana when they agree to
1427		-	receive financial services from the creditor or the person
1428		-	exempt from licensing, as applicable;
1429		-	(f) be issued by a bonding, surety, or insurance company
1430		-	authorized to do business in Indiana and rated at least "A-" by at
1431		-	least one (1) nationally recognized investment rating service; and
1432		-	(g) have payment conditioned upon:
1433		-	(i) the creditor's or any of the creditor's licensed mortgage loan
1434		-	originators'; or
1435		-	(ii) the exempt person's or any of the exempt person's licensed
1436		-	mortgage loan originators';
1437		-	noncompliance with or violation of this chapter, 750 IAC 9, or
1438		-	other federal or state laws or regulations applicable to mortgage
1439		-	lending.
1440		-	(3) The director may adopt rules or guidance documents with
1441		-	respect to the requirements for surety bonds as necessary to accomplish
1442		-	the purposes of this article. Upon written request from:
1443		-	(a) a creditor described in subsection (1)(a); or
1444		-	(b) an exempt person described in subsection (1)(b);
1445		-	the director may, at the discretion of the director, waive or shorten the
1446		-	two (2) year period set forth in subsection (2)(d) during which a surety
1447		-	bond required by this section must remain in effect after the occurrence
1448		-	of an event described in subsection (2)(d)(i) or (2)(d)(ii), as applicable.
1449		-	(4) The penal sum of the surety bond shall be maintained in an
1450		-	amount that reflects the dollar amount of mortgage transactions
1451		-	originated as determined by the director. If the principal amount of a
1452		-	surety bond required under this section is reduced by payment of a
1453		-	SEA 452 — CC 1 35
1454		-	claim or judgment, the creditor or exempt person for whom the bond
1455		-	is issued shall immediately notify the director of the reduction and, not
1456		-	later than thirty (30) days after notice by the director, file a new or an
1457		-	additional surety bond in an amount set by the director. The amount of
1458		-	the new or additional bond set by the director must be at least the
1459		-	amount of the bond before payment of the claim or judgment.
1460		-	(5) If for any reason a surety terminates a bond issued under this
1461		-	section, the creditor or the exempt person shall immediately notify the
1462		-	department and file a new surety bond in an amount determined by the
1463		-	director.
1464		-	(6) Cancellation of a surety bond issued under this section does not
1465		-	affect any liability incurred or accrued during the period when the
1466		-	surety bond was in effect.
1467		-	(7) The director may obtain satisfaction from a surety bond issued
1468		-	under this section if the director incurs expenses, issues a final order,
1469		-	or recovers a final judgment under this chapter.
1470		-	(8) Notices required under this section must be made in writing and
1471		-	submitted through the NMLSR or any other electronic registration
1472		-	system that may be approved by the director.
1473		-	SECTION 12. IC 24-4.5-3-503.4, AS AMENDED BY
1474		-	P.L.176-2019, SECTION 21, IS AMENDED TO READ AS
1475		-	FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 503.4. (1) Subject to
1476		-	subsection (6), the director shall designate the NMLSR to serve as the
1477		-	sole entity responsible for:
1478		-	(a) processing applications and renewals for licenses under
1479		-	section 502.1 of this chapter;
1480		-	(b) issuing unique identifiers for licensees under section 502.1 of
1481		-	this chapter and for entities persons exempt from licensing
1482		-	(either under this article or under IC 24-4.4-1-202(b)(8)) that
1483		-	employ licensed mortgage loan originators or that sponsor
1484		-	licensed loan originators as permitted by
1485		-	IC 24-4.4-1-202(b)(8) or by 750 IAC 9; and
1486		-	(c) performing other services that the director determines
1487		-	necessary for the orderly administration of the department's
1488		-	licensing system under section 502.1 of this chapter.
1489		-	(2) Subject to the confidentiality provisions contained in IC 5-14-3,
1490		-	this section, and IC 28-1-2-30, the director may regularly report
1491		-	significant or recurring violations of this article related to subordinate
1492		-	lien mortgage transactions to the NMLSR.
1493		-	(3) Subject to the confidentiality provisions contained in IC 5-14-3,
1494		-	this section, and IC 28-1-2-30, the director may report complaints
1495		-	received regarding licensees and relating to subordinate lien mortgage
1496		-	SEA 452 — CC 1 36
1497		-	transactions to the NMLSR.
1498		-	(4) The director may report publicly adjudicated licensure actions
1499		-	against licensees under section 502.1 of this chapter to the NMLSR.
1500		-	(5) The director shall establish a process in which persons licensed
1501		-	in accordance with section 502.1 of this chapter may challenge
1502		-	information reported to the NMLSR by the department.
1503		-	(6) The director's authority to designate the NMLSR under
1504		-	subsection (1) is subject to the following:
1505		-	(a) Information stored in the NMLSR is subject to the
1506		-	confidentiality provisions of IC 28-1-2-30 and IC 5-14-3. A
1507		-	person may not:
1508		-	(i) obtain information from the NMLSR unless the person is
1509		-	authorized to do so by statute;
1510		-	(ii) initiate any civil action based on information obtained
1511		-	from the NMLSR if the information is not otherwise available
1512		-	to the person under any other state law; or
1513		-	(iii) initiate any civil action based on information obtained
1514		-	from the NMLSR if the person could not have initiated the
1515		-	action based on information otherwise available to the person
1516		-	under any other state law.
1517		-	(b) Documents, materials, and other forms of information in the
1518		-	control or possession of the NMLSR that are confidential under
1519		-	IC 28-1-2-30 and that are:
1520		-	(i) furnished by the director, the director's designee, or a
1521		-	licensee; or
1522		-	(ii) otherwise obtained by the NMLSR;
1523		-	are confidential and privileged by law and are not subject to
1524		-	inspection under IC 5-14-3, subject to subpoena, subject to
1525		-	discovery, or admissible in evidence in any civil action. However,
1526		-	the director may use the documents, materials, or other
1527		-	information available to the director in furtherance of any action
1528		-	brought in connection with the director's duties under this article.
1529		-	(c) Disclosure of documents, materials, and information:
1530		-	(i) to the director; or
1531		-	(ii) by the director;
1532		-	under this subsection does not result in a waiver of any applicable
1533		-	privilege or claim of confidentiality with respect to the
1534		-	documents, materials, or information.
1535		-	(d) Information provided to the NMLSR is subject to IC 4-1-11.
1536		-	(e) This subsection does not limit or impair a person's right to:
1537		-	(i) obtain information;
1538		-	(ii) use information as evidence in a civil action or proceeding;
1539		-	SEA 452 — CC 1 37
1540		-	or
1541		-	(iii) use information to initiate a civil action or proceeding;
1542		-	if the information may be obtained from the director or the
1543		-	director's designee under any law.
1544		-	(f) Except as otherwise provided in the federal Housing and
1545		-	Economic Recovery Act of 2008, Public Law 110-289, Section
1546		-	1512, the requirements under any federal law or IC 5-14-3
1547		-	regarding the privacy or confidentiality of any information or
1548		-	material provided to the NMLSR, and any privilege arising under
1549		-	federal or state law, including the rules of any federal or state
1550		-	court, with respect to the information or material, continue to
1551		-	apply to the information or material after the information or
1552		-	material has been disclosed to the NMLSR. The information and
1553		-	material may be shared with all state and federal regulatory
1554		-	officials with mortgage industry oversight authority without the
1555		-	loss of privilege or the loss of confidentiality protections provided
1556		-	by federal law or IC 5-14-3.
1557		-	(g) For purposes of this section, the director may enter agreements
1558		-	or sharing arrangements with other governmental agencies, the
1559		-	Conference of State Bank Supervisors, the American Association
1560		-	of Residential Mortgage Regulators, or other associations
1561		-	representing governmental agencies as established by rule or
1562		-	order of the director.
1563		-	(h) Information or material that is subject to a privilege or
1564		-	confidentiality under subdivision (f) is not subject to:
1565		-	(i) disclosure under any federal or state law governing the
1566		-	disclosure to the public of information held by an officer or an
1567		-	agency of the federal government or the respective state; or
1568		-	(ii) subpoena, discovery, or admission into evidence, in any
1569		-	private civil action or administrative process, unless with
1570		-	respect to any privilege held by the NMLSR with respect to
1571		-	the information or material, the person to whom the
1572		-	information or material pertains waives, in whole or in part, in
1573		-	the discretion of the person, that privilege.
1574		-	(i) Any provision of IC 5-14-3 that concerns the disclosure of:
1575		-	(i) confidential supervisory information; or
1576		-	(ii) any information or material described in subdivision (f);
1577		-	and that is inconsistent with subdivision (f) is superseded by this
1578		-	section.
1579		-	(j) This section does not apply with respect to information or
1580		-	material that concerns the employment history of, and publicly
1581		-	adjudicated disciplinary and enforcement actions against, a
1582		-	SEA 452 — CC 1 38
1583		-	person licensed in accordance with section 502.1 of this chapter
1584		-	and described in section 503(2) of this chapter and that is
1585		-	included in the NMLSR for access by the public.
1586		-	(k) The director may require a licensee required to submit
1587		-	information to the NMLSR to pay a processing fee considered
1588		-	reasonable by the director. In determining whether an NMLSR
1589		-	processing fee is reasonable, the director shall:
1590		-	(i) require review of; and
1591		-	(ii) make available;
1592		-	the audited financial statements of the NMLSR.
1593		-	(7) Notwithstanding any other provision of law, any:
1594		-	(a) application, renewal, or other form or document that:
1595		-	(i) relates to mortgage licenses issued by the department; and
1596		-	(ii) is made or produced in an electronic format;
1597		-	(b) document filed as an electronic record in a multistate
1598		-	automated repository established and operated for the licensing or
1599		-	registration of mortgage lenders, brokers, or loan originators; or
1600		-	(c) electronic record filed through the NMLSR;
1601		-	is considered a valid original document when reproduced in paper form
1602		-	by the department.
1603		-	SECTION 13. IC 24-4.5-3-505, AS AMENDED BY P.L.69-2018,
1604		-	SECTION 22, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
1605		-	JULY 1, 2023]: Sec. 505. (1) Every creditor required to be licensed
1606		-	under this article shall maintain records in conformity with United
1607		-	States generally accepted accounting principles and practices, or in any
1608		-	other form that may be preapproved at the discretion of the director, in
1609		-	a manner that will enable the department to determine whether the
1610		-	licensee is complying with the provisions of this article. The record
1611		-	keeping system of a licensee shall be sufficient if the licensee makes
1612		-	the required information reasonably available. The department shall
1613		-	determine the sufficiency of the records and whether the licensee has
1614		-	made the required information reasonably available. The department
1615		-	shall be given free access to the records wherever located. The records
1616		-	pertaining to any loan shall be retained for two (2) years after making
1617		-	the final entry relating to the loan, but in the case of a revolving loan
1618		-	account the two (2) years is measured from the date of each entry. A
1619		-	person licensed or required to be licensed under this chapter is subject
1620		-	to IC 28-1-2-30.5 with respect to any records maintained by the person.
1621		-	A person that is exempt (either under this article or under
1622		-	IC 24-4.4-1-202(b)(6)(a)) IC 24-4.4-1-202(b)(8)) from licensing and
1623		-	that sponsors one (1) or more licensed mortgage loan originators as
1624		-	independent agents under an exclusive written agreement, as permitted
1625		-	SEA 452 — CC 1 39
1626		-	by IC 24-4.4-1-202(b)(6)(a), IC 24-4.4-1-202(b)(8) or by 750 IAC 9,
1627		-	shall:
1628		-	(a) cooperate with the department; and
1629		-	(b) provide access to records and documents;
1630		-	as required by the department in carrying out examinations of the
1631		-	activities of the licensed mortgage loan originators sponsored by the
1632		-	federal savings bank. person.
1633		-	(2) The unique identifier of any person originating a mortgage
1634		-	transaction must be clearly shown on all mortgage transaction
1635		-	application forms and any other documents as required by the director.
1636		-	(3) Every licensee that engages in mortgage transactions shall use
1637		-	automated examination and regulatory software designated by the
1638		-	director, including third party software. Use of the software consistent
1639		-	with guidance documents and policies issued by the director is not a
1640		-	violation of IC 28-1-2-30.
1641		-	(4) Each:
1642		-	(a) creditor that is licensed by the department to engage in
1643		-	mortgage transactions; and
1644		-	(b) entity person that is exempt (either under this article or under
1645		-	IC 24-4.4-1-202(b)(6)(a)) IC 24-4.4-1-202(b)(8)) from licensing
1646		-	and that:
1647		-	(i) employs one (1) or more licensed mortgage loan
1648		-	originators; or
1649		-	(ii) sponsors under an exclusive written agreement, as
1650		-	permitted by IC 24-4.4-1-202(b)(6)(a), one (1) or more
1651		-	licensed mortgage loan originators as independent agents;
1652		-	permitted by IC 24-4.4-1-202(b)(8) or by 750 IAC 9;
1653		-	shall submit to the NMLSR a call report, which must be in the form
1654		-	and contain information the NMLSR requires.
1655		-	(5) Every creditor required to be licensed under this article shall file
1656		-	with the department a composite report as required by the department,
1657		-	but not more frequently than annually, in the form prescribed by the
1658		-	department relating to all consumer loans made by the licensee. The
1659		-	department shall consult with comparable officials in other states for
1660		-	the purpose of making the kinds of information required in the reports
1661		-	uniform among the states. Information contained in the reports shall be
1662		-	confidential and may be published only in composite form. The
1663		-	department may impose a fee in an amount fixed by the department
1664		-	under IC 28-11-3-5 for each day that a creditor fails to file the report
1665		-	required by this subsection.
1666		-	(6) A creditor required to be licensed under this article shall file
1667		-	notification with the department if the licensee:
1668		-	SEA 452 — CC 1 40
1669		-	(a) has a change in name, address, or principals;
1670		-	(b) opens a new branch, closes an existing branch, or relocates an
1671		-	existing branch;
1672		-	(c) files for bankruptcy or reorganization; or
1673		-	(d) is subject to revocation or suspension proceedings by a state
1674		-	or governmental authority with regard to the licensee's activities;
1675		-	not later than thirty (30) days after the date of the event described in
1676		-	this subsection.
1677		-	(7) Every licensee shall file notification with the department if the
1678		-	licensee or any director, executive officer, or manager of the licensee
1679		-	has been convicted of a felony under the laws of Indiana or any other
1680		-	jurisdiction. The licensee shall file the notification required by this
1681		-	subsection not later than thirty (30) days after the date of the event
1682		-	described in this subsection.
1683		-	SECTION 14. IC 28-7-1-19, AS AMENDED BY P.L.35-2010,
1684		-	SECTION 160, IS AMENDED TO READ AS FOLLOWS
1685		-	[EFFECTIVE JULY 1, 2023]: Sec. 19. (a) The capital of a credit union
1686		-	shall consist of the payments on shares which have been made to it by
1687		-	members. A credit union may attach a lien on the shares of any member
1688		-	with outstanding obligations to the credit union. A credit union may,
1689		-	upon the resignation of a member, cancel the shares of such member,
1690		-	and apply the withdrawal value of such shares towards the liquidation
1691		-	of the member's obligations. Fully paid up shares of a credit union may
1692		-	be transferred to any qualified member upon such terms as the bylaws
1693		-	provide. If a federal credit union is authorized by the federal regulatory
1694		-	authority with jurisdiction or by federal law to use one (1) or more
1695		-	forms of secondary capital, the department may by rule, order, or
1696		-	declaratory ruling allow a credit union to use one (1) or more forms of
1697		-	secondary capital. The rule, order, or declaratory ruling must include
1698		-	disclosure requirements concerning the conditions for return of the
1699		-	secondary capital and the liquidation priority of the secondary capital.
1700		-	(b) A credit union shall maintain capital consistent with the
1701		-	safety and soundness necessary to support the risk in the credit
1702		-	union's activities, as determined appropriate by the director. The
1703		-	National Credit Union Administration's:
1704		-	(1) prompt corrective action; and
1705		-	(2) risk based net worth;
1706		-	regulations set forth in 12 CFR 702.101, 12 CFR 702.102, 12 CFR
1707		-	702.103, 12 CFR 702.104, and 12 CFR 702.105 apply to all credit
1708		-	unions.
1709		-	SECTION 15. IC 28-7-1-19.1 IS ADDED TO THE INDIANA
	88	+	1 SECTION 1. IC 24-4.4-1-102, AS AMENDED BY P.L.29-2022,
	89	+	2 SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
	90	+	3 JULY 1, 2023]: Sec. 102. (1) This article shall be liberally construed
	91	+	4 and applied to promote its underlying purposes and policies.
	92	+	5 (2) The underlying purposes and policies of this article are:
	93	+	6 (a) to permit and encourage the development of fair and
	94	+	7 economically sound first lien mortgage lending practices; and
	95	+	8 (b) to conform the regulation of first lien mortgage lending
	96	+	9 practices to applicable state and federal laws, rules, regulations,
	97	+	10 policies, and guidance.
	98	+	11 (3) A reference to a requirement imposed by this article includes
	99	+	12 reference to a related rule of the department adopted under this article.
	100	+	13 (4) A reference to a federal law in this article is a reference to the
	101	+	14 law as in effect December 31, 2021. 2022.
	102	+	15 SECTION 2. IC 24-4.4-1-202, AS AMENDED BY P.L.103-2014,
	103	+	ES 452—LS 7232/DI 101 2
	104	+	1 SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
	105	+	2 JULY 1, 2023]: Sec. 202. (a) As used in this section, "balloon
	106	+	3 payment", with respect to a mortgage transaction, means any payment:
	107	+	4 (1) that the creditor requires the debtor to make at any time during
	108	+	5 the term of the mortgage;
	109	+	6 (2) that represents the entire amount of the outstanding balance
	110	+	7 with respect to the mortgage; and
	111	+	8 (3) the entire amount of which is due as of a specified date or at
	112	+	9 the end of a specified period;
	113	+	10 if the aggregate amount of the minimum periodic payments required
	114	+	11 under the mortgage would not fully amortize the outstanding balance
	115	+	12 by the specified date or at the end of the specified period. The term
	116	+	13 does not include a payment required by a creditor under a due-on-sale
	117	+	14 clause (as defined in 12 U.S.C. 1701j-3(a)) or a payment required by
	118	+	15 a creditor under a provision in the mortgage that permits the creditor
	119	+	16 to accelerate the debt upon the debtor's default or failure to abide by the
	120	+	17 material terms of the mortgage.
	121	+	18 (b) This article does not apply to the following:
	122	+	19 (1) Extensions of credit to government or governmental agencies
	123	+	20 or instrumentalities.
	124	+	21 (2) A first lien mortgage transaction in which the debt is incurred
	125	+	22 primarily for a purpose other than a personal, family, or
	126	+	23 household purpose.
	127	+	24 (3) An extension of credit primarily for a business, a commercial,
	128	+	25 or an agricultural purpose.
	129	+	26 (4) Except for IC 24-4.4-2-401(2), IC 24-4.4-2-402.3,
	130	+	27 IC 24-4.4-2-405(4), and IC 24-4.4-2-405(5), a first lien mortgage
	131	+	28 transaction made:
	132	+	29 (a) in compliance with the requirements of; and
	133	+	30 (b) by a community development corporation (as defined in
	134	+	31 IC 4-4-28-2) acting as a subrecipient of funds from;
	135	+	32 the Indiana housing and community development authority
	136	+	33 established by IC 5-20-1-3.
	137	+	34 (5) Except for IC 24-4.4-2-401(2), IC 24-4.4-2-402.3,
	138	+	35 IC 24-4.4-2-405(4), and IC 24-4.4-2-405(5), a first lien mortgage
	139	+	36 transaction made by an entity that exclusively uses funds provided
	140	+	37 by the United States Department of Housing and Urban
	141	+	38 Development under Title 1 of the federal Housing and
	142	+	39 Community Development Act of 1974, Public Law 93-383, as
	143	+	40 amended (42 U.S.C. 5301 et seq.).
	144	+	41 (6) An extension of credit originated by the following:
	145	+	42 (a) A depository institution. However, a federal savings bank
	146	+	ES 452—LS 7232/DI 101 3
	147	+	1 may voluntarily register with the department for the purpose
	148	+	2 of sponsoring, under an exclusive written agreement,
	149	+	3 individuals who are licensed as mortgage loan originators
	150	+	4 under this article and 750 IAC 9-3, who perform mortgage
	151	+	5 loan origination activities as independent agents under the
	152	+	6 federal savings bank's direct supervision and control, who hold
	153	+	7 a current, valid insurance producer license under IC 27-1-15.6,
	154	+	8 and who sell, solicit, or negotiate insurance under an exclusive
	155	+	9 written agreement for a licensed insurance company that is a
	156	+	10 subsidiary of a company that also owns or controls the federal
	157	+	11 savings bank, if the federal savings bank does the following:
	158	+	12 (i) Assumes responsibility for and reasonably supervises the
	159	+	13 activities of all licensed mortgage loan originators sponsored
	160	+	14 by the federal savings bank under this clause.
	161	+	15 (ii) Registers with and maintains a valid unique identifier
	162	+	16 issued by the NMLSR as required by IC 24-4.4-2-401(2),
	163	+	17 maintains a surety bond in accordance with
	164	+	18 IC 24-4.4-2-402.3, submits to the NMLSR reports of
	165	+	19 condition in accordance with IC 24-4.4-2-405(4) (subject to
	166	+	20 IC 24-4.4-2-402.4), and files financial statements with the
	167	+	21 department in accordance with IC 24-4.4-2-405(5).
	168	+	22 (iii) Cooperates with the department, and provides access to
	169	+	23 records and documents, as required by the department in
	170	+	24 carrying out examinations of the activities of the licensed
	171	+	25 mortgage loan originators sponsored by the federal savings
	172	+	26 bank under this clause, as described in IC 24-4.4-2-405(1).
	173	+	27 (iv) Agrees to comply with all law, rules, directives, and
	174	+	28 orders in connection with the activities of the licensed
	175	+	29 mortgage loan originators sponsored by the federal savings
	176	+	30 bank, as the director determines necessary to ensure
	177	+	31 compliance with the federal Secure and Fair Enforcement
	178	+	32 for Mortgage Licensing Act of 2008 (12 U.S.C. 5101 et seq.)
	179	+	33 and with Indiana law.
	180	+	34 (b) Subsidiaries that are not licensed under this article and that
	181	+	35 are:
	182	+	36 (i) owned and controlled by a depository institution; and
	183	+	37 (ii) regulated by a federal banking agency.
	184	+	38 (c) An institution regulated by the Farm Credit Administration.
	185	+	39 (7) Except for IC 24-4.4-2-401(2), IC 24-4.4-2-402.3,
	186	+	40 IC 24-4.4-2-405(4), and IC 24-4.4-2-405(5), a credit union service
	187	+	41 organization that is majority owned, directly or indirectly, by one
	188	+	42 (1) or more credit unions.
	189	+	ES 452—LS 7232/DI 101 4
	190	+	1 (8) A person that does not engage as a creditor in first lien
	191	+	2 mortgage transactions in Indiana. However, a person may
	192	+	3 voluntarily register with the department for the purpose of
	193	+	4 sponsoring employees who are licensed as mortgage loan
	194	+	5 originators under this article and 750 IAC 9-3, and who are
	195	+	6 engaged solely as third party loan processors or underwriters,
	196	+	7 if the person does the following:
	197	+	8 (a) Assumes responsibility for and reasonably supervises
	198	+	9 the activities of all licensed mortgage loan originators
	199	+	10 sponsored by the person.
	200	+	11 (b) Registers with and maintains a valid unique identifier
	201	+	12 issued by the NMLSR as required by IC 24-4.4-2-401(2),
	202	+	13 maintains a surety bond in accordance with
	203	+	14 IC 24-4.4-2-402.3, submits to the NMLSR reports of
	204	+	15 condition in accordance with IC 24-4.4-2-405(4) (subject to
	205	+	16 IC 24-4.4-2-402.4), and files financial statements with the
	206	+	17 department in accordance with IC 24-4.4-2-405(5).
	207	+	18 (c) Cooperates with the department, and provides access to
	208	+	19 records and documents, as required by the department in
	209	+	20 carrying out examinations of the activities of the licensed
	210	+	21 mortgage loan originators sponsored by the person, as
	211	+	22 described in IC 24-4.4-2-405(1).
	212	+	23 (d) Agrees to comply with all law, rules, directives, and
	213	+	24 orders in connection with the activities of the licensed
	214	+	25 mortgage loan originators sponsored by the person, as the
	215	+	26 director determines necessary to ensure compliance with
	216	+	27 the federal Secure and Fair Enforcement for Mortgage
	217	+	28 Licensing Act of 2008 (12 U.S.C. 5101 et seq.) and with
	218	+	29 Indiana law.
	219	+	30 (8) (9) A first lien mortgage transaction originated by a registered
	220	+	31 mortgage loan originator, when acting for an entity described in
	221	+	32 subsection (6). However, a privately insured state chartered credit
	222	+	33 union shall comply with the system of mortgage loan originator
	223	+	34 registration developed by the Federal Financial Institutions
	224	+	35 Examinations Council under Section 1507 of the federal Secure
	225	+	36 and Fair Enforcement for Mortgage Licensing Act of 2008
	226	+	37 (SAFE).
	227	+	38 (9) (10) An individual who offers or negotiates terms of a
	228	+	39 mortgage transaction with or on behalf of an immediate family
	229	+	40 member of the individual.
	230	+	41 (10) (11) An individual who offers or negotiates terms of a
	231	+	42 mortgage transaction secured by a dwelling that served as the
	232	+	ES 452—LS 7232/DI 101 5
	233	+	1 individual's residence.
	234	+	2 (11) (12) Unless the attorney is compensated by:
	235	+	3 (a) a lender;
	236	+	4 (b) a mortgage broker;
	237	+	5 (c) another mortgage loan originator; or
	238	+	6 (d) any agent of the lender, mortgage broker, or other
	239	+	7 mortgage loan originator described in clauses (a) through (c);
	240	+	8 a licensed attorney who negotiates the terms of a mortgage
	241	+	9 transaction on behalf of a client as an ancillary matter to the
	242	+	10 attorney's representation of the client.
	243	+	11 (12) (13) The United States, any state or local government, or any
	244	+	12 agency or instrumentality of any governmental entity, including
	245	+	13 United States government sponsored enterprises.
	246	+	14 (13) (14) A person in whose name a tablefunded transaction is
	247	+	15 closed, as described in section 301(34)(a) of this chapter.
	248	+	16 However, the exemption provided by this subsection does not
	249	+	17 apply if:
	250	+	18 (a) the transaction:
	251	+	19 (i) is secured by a dwelling that is a mobile home, a
	252	+	20 manufactured home, or a trailer; and
	253	+	21 (ii) is not also secured by an interest in land; and
	254	+	22 (b) the person in whose name the transaction is closed, as
	255	+	23 described in section 301(34)(a) of this chapter, sells the
	256	+	24 dwelling to the debtor through a retail installment contract or
	257	+	25 other similar transaction.
	258	+	26 (14) (15) A bona fide nonprofit organization not operating in a
	259	+	27 commercial context, as determined by the director, if the
	260	+	28 following criteria are satisfied:
	261	+	29 (a) Subject to clause (b), the organization originates only one
	262	+	30 (1) or both of the following types of mortgage transactions:
	263	+	31 (i) Zero (0) interest first lien mortgage transactions.
	264	+	32 (ii) Zero (0) interest subordinate lien mortgage transactions.
	265	+	33 (b) The organization does not require, under the terms of the
	266	+	34 mortgage or otherwise, balloon payments with respect to the
	267	+	35 mortgage transactions described in clause (a).
	268	+	36 (c) The organization is exempt from federal income taxation
	269	+	37 under Section 501(c)(3) of the Internal Revenue Code.
	270	+	38 (d) The organization's primary purpose is to serve the public
	271	+	39 by helping low income individuals and families build, repair,
	272	+	40 and purchase housing.
	273	+	41 (e) The organization uses only:
	274	+	42 (i) unpaid volunteers; or
	275	+	ES 452—LS 7232/DI 101 6
	276	+	1 (ii) employees whose compensation is not based on the
	277	+	2 number or size of any mortgage transactions that the
	278	+	3 employees originate;
	279	+	4 to originate the mortgage transactions described in clause (a).
	280	+	5 (f) The organization does not charge loan origination fees in
	281	+	6 connection with the mortgage transactions described in clause
	282	+	7 (a).
	283	+	8 (15) (16) A bona fide nonprofit organization (as defined in section
	284	+	9 301(37) of this chapter) if the following criteria are satisfied:
	285	+	10 (a) For each calendar year that the organization seeks the
	286	+	11 exemption provided by this subdivision, the organization
	287	+	12 certifies, not later than December 31 of the preceding calendar
	288	+	13 year and on a form prescribed by the director and accompanied
	289	+	14 by such documentation as required by the director, that the
	290	+	15 organization is a bona fide nonprofit organization (as defined
	291	+	16 in section 301(37) of this chapter).
	292	+	17 (b) The director determines that the organization originates
	293	+	18 only mortgage transactions that are favorable to the debtor. For
	294	+	19 purposes of this clause, a mortgage transaction is favorable to
	295	+	20 the debtor if the director determines that the terms of the
	296	+	21 mortgage transaction are consistent with terms of mortgage
	297	+	22 transactions made in a public or charitable context, rather than
	298	+	23 in a commercial context.
	299	+	24 SECTION 3. IC 24-4.4-1-301, AS AMENDED BY P.L.69-2018,
	300	+	25 SECTION 3, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
	301	+	26 JULY 1, 2023]: Sec. 301. In addition to definitions appearing in
	302	+	27 subsequent chapters of this article, the following definitions apply
	303	+	28 throughout this article:
	304	+	29 (1) "Affiliate", with respect to any person subject to this article,
	305	+	30 means a person that, directly or indirectly, through one (1) or
	306	+	31 more intermediaries:
	307	+	32 (a) controls;
	308	+	33 (b) is controlled by; or
	309	+	34 (c) is under common control with;
	310	+	35 the person subject to this article.
	311	+	36 (2) "Agreement" means the bargain of the parties in fact as found
	312	+	37 in the parties' language or by implication from other
	313	+	38 circumstances, including course of dealing or usage of trade or
	314	+	39 course of performance.
	315	+	40 (3) "Agricultural products" includes agricultural products,
	316	+	41 horticultural products, viticultural products, dairy products,
	317	+	42 livestock, wildlife, poultry, bees, forest products, fish and
	318	+	ES 452—LS 7232/DI 101 7
	319	+	1 shellfish, any products raised or produced on farms, and any
	320	+	2 products processed or manufactured from products raised or
	321	+	3 produced on farms.
	322	+	4 (4) "Agricultural purpose" means a purpose related to the
	323	+	5 production, harvest, exhibition, marketing, transportation,
	324	+	6 processing, or manufacture of agricultural products by a natural
	325	+	7 person who cultivates, plants, propagates, or nurtures the
	326	+	8 agricultural products.
	327	+	9 (5) "Consumer credit sale" is a sale of goods, services, or an
	328	+	10 interest in land in which:
	329	+	11 (a) credit is granted by a person who engages as a seller in
	330	+	12 credit transactions of the same kind;
	331	+	13 (b) the buyer is a person other than an organization;
	332	+	14 (c) the goods, services, or interest in land are purchased
	333	+	15 primarily for a personal, family, or household purpose;
	334	+	16 (d) either the debt is payable in installments or a credit service
	335	+	17 charge is made; and
	336	+	18 (e) with respect to a sale of goods or services, either:
	337	+	19 (i) the amount of credit extended, the written credit limit, or
	338	+	20 the initial advance does not exceed the exempt threshold
	339	+	21 amount, as adjusted in accordance with the annual
	340	+	22 adjustment of the exempt threshold amount, specified in
	341	+	23 Regulation Z (12 CFR 226.3 or 12 CFR 1026.3(b), as
	342	+	24 applicable); or
	343	+	25 (ii) the debt is secured by personal property used or expected
	344	+	26 to be used as the principal dwelling of the buyer.
	345	+	27 (6) "Credit" means the right granted by a creditor to a debtor to
	346	+	28 defer payment of debt or to incur debt and defer its payment.
	347	+	29 (7) "Creditor" means a person:
	348	+	30 (a) that regularly engages in the extension of first lien
	349	+	31 mortgage transactions that are subject to a credit service
	350	+	32 charge or loan finance charge, as applicable, or are payable by
	351	+	33 written agreement in more than four (4) installments (not
	352	+	34 including a down payment); and
	353	+	35 (b) to which the obligation is initially payable, either on the
	354	+	36 face of the note or contract, or by agreement if there is not a
	355	+	37 note or contract.
	356	+	38 The term does not include a person described in subsection
	357	+	39 (34)(a) in a tablefunded transaction. A creditor may be an
	358	+	40 individual, a limited liability company, a sole proprietorship, a
	359	+	41 partnership, a trust, a joint venture, a corporation, an
	360	+	42 unincorporated organization, or other form of entity, however
	361	+	ES 452—LS 7232/DI 101 8
	362	+	1 organized.
	363	+	2 (8) "Department" refers to the members of the department of
	364	+	3 financial institutions.
	365	+	4 (9) "Depository institution" has the meaning set forth in the
	366	+	5 Federal Deposit Insurance Act (12 U.S.C. 1813(c)) and includes
	367	+	6 any credit union.
	368	+	7 (10) "Director" refers to the director of the department of financial
	369	+	8 institutions or the director's designee.
	370	+	9 (11) "Dwelling" means a residential structure that contains one
	371	+	10 (1) to four (4) units, regardless of whether the structure is
	372	+	11 attached to real property. The term includes an individual:
	373	+	12 (a) condominium unit;
	374	+	13 (b) cooperative unit;
	375	+	14 (c) mobile home; or
	376	+	15 (d) trailer;
	377	+	16 that is used as a residence.
	378	+	17 (12) "Employee" means an individual who is paid wages or other
	379	+	18 compensation by an employer required under federal income tax
	380	+	19 law to file Form W-2 on behalf of the individual.
	381	+	20 (13) "Federal banking agencies" means the Board of Governors
	382	+	21 of the Federal Reserve System, the Office of the Comptroller of
	383	+	22 the Currency, the Office of Thrift Supervision, the National Credit
	384	+	23 Union Administration, and the Federal Deposit Insurance
	385	+	24 Corporation.
	386	+	25 (14) "First lien mortgage transaction" means:
	387	+	26 (a) a consumer loan; or
	388	+	27 (b) a consumer credit sale;
	389	+	28 that is or will be used by the debtor primarily for personal, family,
	390	+	29 or household purposes and that is secured by a mortgage or a land
	391	+	30 contract (or another consensual security interest equivalent to a
	392	+	31 mortgage or a land contract) that constitutes a first lien on a
	393	+	32 dwelling or on residential real estate upon which a dwelling is
	394	+	33 constructed or intended to be constructed.
	395	+	34 (15) "Immediate family member" means a spouse, child, sibling,
	396	+	35 parent, grandparent, or grandchild. The term includes stepparents,
	397	+	36 stepchildren, stepsiblings, and adoptive relationships.
	398	+	37 (16) "Individual" means a natural person.
	399	+	38 (17) "Licensee" means a person licensed to engage in mortgage
	400	+	39 transactions as a creditor.
	401	+	40 (18) "Loan" includes:
	402	+	41 (a) the creation of debt by:
	403	+	42 (i) the creditor's payment of or agreement to pay money to
	404	+	ES 452—LS 7232/DI 101 9
	405	+	1 the debtor or to a third party for the account of the debtor; or
	406	+	2 (ii) the extension of credit by a person who engages as a
	407	+	3 seller in credit transactions primarily secured by an interest
	408	+	4 in land;
	409	+	5 (b) the creation of debt by a credit to an account with the
	410	+	6 creditor upon which the debtor is entitled to draw
	411	+	7 immediately; and
	412	+	8 (c) the forbearance of debt arising from a loan.
	413	+	9 (19) "Loan brokerage business" means any activity in which a
	414	+	10 person, in return for any consideration from any source, procures,
	415	+	11 attempts to procure, or assists in procuring, a mortgage
	416	+	12 transaction from a third party or any other person, whether or not
	417	+	13 the person seeking the mortgage transaction actually obtains the
	418	+	14 mortgage transaction.
	419	+	15 (20) "Loan processor or underwriter" means an individual who
	420	+	16 performs clerical or support duties as an employee at the direction
	421	+	17 of, and subject to the supervision and instruction of, a person
	422	+	18 licensed to engage in mortgage transactions or a person exempt
	423	+	19 from licensing. For purposes of this subsection, the term "clerical
	424	+	20 or support duties" may include, after the receipt of an application,
	425	+	21 the following:
	426	+	22 (a) The receipt, collection, distribution, and analysis of
	427	+	23 information common for the processing or underwriting of a
	428	+	24 mortgage transaction.
	429	+	25 (b) The communication with a consumer to obtain the
	430	+	26 information necessary for the processing or underwriting of a
	431	+	27 loan, to the extent that the communication does not include:
	432	+	28 (i) offering or negotiating loan rates or terms; or
	433	+	29 (ii) counseling consumers about mortgage transaction rates
	434	+	30 or terms.
	435	+	31 The term does not include an individual who is an employee
	436	+	32 of a person that is not engaged in mortgage transactions as a
	437	+	33 creditor if that person is permitted to voluntarily register with
	438	+	34 the department to sponsor the individual under section
	439	+	35 202(b)(8) of this chapter to engage solely in the activities
	440	+	36 described in this subdivision.
	441	+	37 (21) "Mortgage loan originator" means an individual who, for
	442	+	38 compensation or gain, or in the expectation of compensation or
	443	+	39 gain, regularly engages in taking a mortgage transaction
	444	+	40 application or in offering or negotiating the terms of a mortgage
	445	+	41 transaction that either is made under this article or under
	446	+	42 IC 24-4.5 or is made by an employee of a person licensed to
	447	+	ES 452—LS 7232/DI 101 10
	448	+	1 engage in mortgage transactions or by an employee of a person
	449	+	2 that is exempt from licensing, while the employee is engaging in
	450	+	3 the loan brokerage business. The term does not include the
	451	+	4 following:
	452	+	5 (a) An individual engaged solely as a loan processor or
	453	+	6 underwriter as long as the individual works exclusively as an
	454	+	7 employee of a person licensed to engage in mortgage
	455	+	8 transactions or as an employee of a person exempt from
	456	+	9 licensing. However, the term includes an individual who is
	457	+	10 licensed as a mortgage loan originator under this article
	458	+	11 and 750 IAC 9-3 and who is an employee of a person that
	459	+	12 is not engaged in mortgage transactions as a creditor if
	460	+	13 that person voluntarily registers with the department to
	461	+	14 sponsor the individual under section 202(b)(8) of this
	462	+	15 chapter to engage solely as a third party processor or
	463	+	16 underwriter.
	464	+	17 (b) Unless the person or entity is compensated by:
	465	+	18 (i) a creditor;
	466	+	19 (ii) a loan broker;
	467	+	20 (iii) another mortgage loan originator; or
	468	+	21 (iv) any agent of a creditor, a loan broker, or another
	469	+	22 mortgage loan originator described in items (i) through (iii);
	470	+	23 a person or entity that performs only real estate brokerage
	471	+	24 activities and is licensed or registered in accordance with
	472	+	25 applicable state law.
	473	+	26 (c) A person solely involved in extensions of credit relating to
	474	+	27 timeshare plans (as defined in 11 U.S.C. 101(53D)).
	475	+	28 (22) "Mortgage servicer" means the last person to whom a
	476	+	29 mortgagor or the mortgagor's successor in interest has been
	477	+	30 instructed by a mortgagee to send payments on a loan secured by
	478	+	31 a mortgage.
	479	+	32 (23) "Mortgage transaction" means:
	480	+	33 (a) a consumer loan; or
	481	+	34 (b) a consumer credit sale;
	482	+	35 that is or will be used by the debtor primarily for personal, family,
	483	+	36 or household purposes and that is secured by a mortgage or a land
	484	+	37 contract (or another consensual security interest equivalent to a
	485	+	38 mortgage or a land contract) on a dwelling or on residential real
	486	+	39 estate upon which a dwelling is constructed or intended to be
	487	+	40 constructed.
	488	+	41 (24) "Nationwide Multistate Licensing System and Registry" (or
	489	+	42 "Nationwide Mortgage Licensing System and Registry" or
	490	+	ES 452—LS 7232/DI 101 11
	491	+	1 "NMLSR") means a multistate licensing system owned and
	492	+	2 operated by the State Regulatory Registry, LLC, or by any
	493	+	3 successor or affiliated entity, for the licensing and registration of
	494	+	4 creditors, mortgage loan originators, and other persons in the
	495	+	5 mortgage or financial services industries. The term includes any
	496	+	6 other name or acronym that may be assigned to the system by the
	497	+	7 State Regulatory Registry, LLC, or by any successor or affiliated
	498	+	8 entity.
	499	+	9 (25) "Nontraditional mortgage product" means any mortgage
	500	+	10 product other than a thirty (30) year fixed rate mortgage.
	501	+	11 (26) "Organization" means a corporation, a government or
	502	+	12 government subdivision, an agency, a trust, an estate, a
	503	+	13 partnership, a limited liability company, a cooperative, an
	504	+	14 association, a joint venture, an unincorporated organization, or
	505	+	15 any other entity, however organized.
	506	+	16 (27) "Payable in installments", with respect to a debt or an
	507	+	17 obligation, means that payment is required or permitted by written
	508	+	18 agreement to be made in more than four (4) installments not
	509	+	19 including a down payment.
	510	+	20 (28) "Person" includes an individual or an organization.
	511	+	21 (29) "Principal" of a mortgage transaction means the total of:
	512	+	22 (a) the net amount paid to, receivable by, or paid or payable
	513	+	23 for the account of the debtor; and
	514	+	24 (b) to the extent that payment is deferred, amounts actually
	515	+	25 paid or to be paid by the creditor for registration, certificate of
	516	+	26 title, or license fees if not included in clause (a).
	517	+	27 (30) "Real estate brokerage activity" means any activity that
	518	+	28 involves offering or providing real estate brokerage services to the
	519	+	29 public, including the following:
	520	+	30 (a) Acting as a real estate agent or real estate broker for a
	521	+	31 buyer, seller, lessor, or lessee of real property.
	522	+	32 (b) Bringing together parties interested in the sale, purchase,
	523	+	33 lease, rental, or exchange of real property.
	524	+	34 (c) Negotiating, on behalf of any party, any part of a contract
	525	+	35 relating to the sale, purchase, lease, rental, or exchange of real
	526	+	36 property (other than in connection with providing financing
	527	+	37 with respect to the sale, purchase, lease, rental, or exchange of
	528	+	38 real property).
	529	+	39 (d) Engaging in any activity for which a person engaged in the
	530	+	40 activity is required to be registered or licensed as a real estate
	531	+	41 agent or real estate broker under any applicable law.
	532	+	42 (e) Offering to engage in any activity, or act in any capacity,
	533	+	ES 452—LS 7232/DI 101 12
	534	+	1 described in this subsection.
	535	+	2 (31) "Registered mortgage loan originator" means any individual
	536	+	3 who:
	537	+	4 (a) meets the definition of mortgage loan originator and is an
	538	+	5 employee of:
	539	+	6 (i) a depository institution;
	540	+	7 (ii) a subsidiary that is owned and controlled by a depository
	541	+	8 institution and regulated by a federal banking agency; or
	542	+	9 (iii) an institution regulated by the Farm Credit
	543	+	10 Administration; and
	544	+	11 (b) is registered with, and maintains a unique identifier
	545	+	12 through, the NMLSR.
	546	+	13 (32) "Residential real estate" means any real property that is
	547	+	14 located in Indiana and on which there is located or intended to be
	548	+	15 constructed a dwelling.
	549	+	16 (33) "Revolving first lien mortgage transaction" means a first lien
	550	+	17 mortgage transaction in which:
	551	+	18 (a) the creditor permits the debtor to obtain advances from
	552	+	19 time to time;
	553	+	20 (b) the unpaid balances of principal, finance charges, and other
	554	+	21 appropriate charges are debited to an account; and
	555	+	22 (c) the debtor has the privilege of paying the balances in
	556	+	23 installments.
	557	+	24 (34) "Tablefunded" means a transaction in which:
	558	+	25 (a) a person closes a first lien mortgage transaction in the
	559	+	26 person's own name as a mortgagee with funds provided by one
	560	+	27 (1) or more other persons; and
	561	+	28 (b) the transaction is assigned, not later than one (1) business
	562	+	29 day after the funding of the transaction, to the mortgage
	563	+	30 creditor providing the funding.
	564	+	31 (35) "Unique identifier" means a number or other identifier
	565	+	32 assigned by protocols established by the NMLSR.
	566	+	33 (36) "Land contract" means a contract for the sale of real estate in
	567	+	34 which the seller of the real estate retains legal title to the real
	568	+	35 estate until the total contract price is paid by the buyer.
	569	+	36 (37) "Bona fide nonprofit organization" means an organization
	570	+	37 that does the following, as determined by the director, under
	571	+	38 criteria established by the director:
	572	+	39 (a) Maintains tax exempt status under Section 501(c)(3) of the
	573	+	40 Internal Revenue Code.
	574	+	41 (b) Promotes affordable housing or provides home ownership
	575	+	42 education or similar services.
	576	+	ES 452—LS 7232/DI 101 13
	577	+	1 (c) Conducts the organization's activities in a manner that
	578	+	2 serves public or charitable purposes.
	579	+	3 (d) Receives funding and revenue and charges fees in a
	580	+	4 manner that does not encourage the organization or the
	581	+	5 organization's employees to act other than in the best interests
	582	+	6 of the organization's clients.
	583	+	7 (e) Compensates the organization's employees in a manner that
	584	+	8 does not encourage employees to act other than in the best
	585	+	9 interests of the organization's clients.
	586	+	10 (f) Provides to, or identifies for, debtors mortgage transactions
	587	+	11 with terms that are favorable to the debtor (as described in
	588	+	12 section 202(b)(15) 202(b)(16) of this chapter) and comparable
	589	+	13 to mortgage transactions and housing assistance provided
	590	+	14 under government housing assistance programs.
	591	+	15 (g) Maintains certification by the United States Department of
	592	+	16 Housing and Urban Development or employs counselors who
	593	+	17 are certified by the Indiana housing and community
	594	+	18 development authority.
	595	+	19 (38) "Regularly engaged", with respect to a person who extends
	596	+	20 or originates first lien mortgage transactions, refers to a person
	597	+	21 who:
	598	+	22 (a) extended or originated more than five (5) first lien
	599	+	23 mortgage transactions in the preceding calendar year; or
	600	+	24 (b) extends or originates, or will extend or originate, more than
	601	+	25 five (5) first lien mortgage transactions in the current calendar
	602	+	26 year if the person did not extend or originate more than five
	603	+	27 (5) first lien mortgage transactions in the preceding calendar
	604	+	28 year.
	605	+	29 SECTION 4. IC 24-4.4-2-401, AS AMENDED BY P.L.69-2018,
	606	+	30 SECTION 4, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
	607	+	31 JULY 1, 2023]: Sec. 401. (1) Unless a person subject to this article has
	608	+	32 first obtained a mortgage license from the department and annually
	609	+	33 maintains the license, the person shall not engage in Indiana as a
	610	+	34 creditor in first lien mortgage transactions. A separate mortgage license
	611	+	35 is required for each legal entity that engages in Indiana as a creditor in
	612	+	36 first lien mortgage transactions. However, a separate mortgage license
	613	+	37 is not required for each branch of a legal entity licensed by the
	614	+	38 department.
	615	+	39 (2) Each:
	616	+	40 (a) creditor licensed by the department to engage in mortgage
	617	+	41 transactions; and
	618	+	42 (b) entity person exempt from licensing that:
	619	+	ES 452—LS 7232/DI 101 14
	620	+	1 (i) employs a licensed mortgage loan originator; or
	621	+	2 (ii) sponsors under an exclusive written agreement, as
	622	+	3 permitted by IC 24-4.4-1-202(b)(6)(a), a licensed mortgage
	623	+	4 loan originator as an independent agent; permitted by
	624	+	5 IC 24-4.4-1-202(b)(8) or by 750 IAC 9;
	625	+	6 shall register with and maintain a valid unique identifier issued by the
	626	+	7 NMLSR. Each licensed mortgage loan originator must be employed by,
	627	+	8 or sponsored under an exclusive written agreement (as permitted by
	628	+	9 IC 24-4.4-1-202(b)(6)(a)) and as an independent agent, permitted by
	629	+	10 IC 24-4.4-1-202(b)(8) or by 750 IAC 9, and associated with, a
	630	+	11 licensed creditor (or an entity a person exempt from licensing) that is
	631	+	12 registered with the NMLSR. in order to originate loans.
	632	+	13 (3) An individual engaging solely in loan processor or underwriter
	633	+	14 activities shall not represent to the public, through advertising or other
	634	+	15 means of communicating or providing information, including the use
	635	+	16 of business cards, stationery, brochures, signs, rate lists, or other
	636	+	17 promotional items, that the individual can or will perform any of the
	637	+	18 activities of a mortgage loan originator. An individual who:
	638	+	19 (a) is licensed as a mortgage loan originator under this article
	639	+	20 and 750 IAC 9-3; and
	640	+	21 (b) is sponsored by a person, as permitted by
	641	+	22 IC 24-4.4-1-202(b)(8), to engage solely as a third party loan
	642	+	23 processor or underwriter;
	643	+	24 is subject to the prohibition set forth in this subsection with respect
	644	+	25 to the individual's engagement under the sponsorship.
	645	+	26 (4) Applicants for a mortgage license must apply for the license in
	646	+	27 the form prescribed by the director. Each form:
	647	+	28 (a) must contain content as set forth by rule, instruction, or
	648	+	29 procedure of the director; and
	649	+	30 (b) may be changed or updated as necessary by the director to
	650	+	31 carry out the purposes of this article.
	651	+	32 (5) To fulfill the purposes of this article, the director may establish
	652	+	33 relationships or contracts with the NMLSR or other entities designated
	653	+	34 by the NMLSR to:
	654	+	35 (a) collect and maintain records; and
	655	+	36 (b) process transaction fees or other fees related to licensees or
	656	+	37 other persons subject to this article.
	657	+	38 (6) For the purpose of participating in the NMLSR, the director or
	658	+	39 the department may:
	659	+	40 (a) waive or modify, in whole or in part, by rule or order, any of
	660	+	41 the requirements of this article; and
	661	+	42 (b) establish new requirements as reasonably necessary to
	662	+	ES 452—LS 7232/DI 101 15
	663	+	1 participate in the NMLSR.
	664	+	2 SECTION 5. IC 24-4.4-2-402.3, AS AMENDED BY P.L.129-2020,
	665	+	3 SECTION 3, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
	666	+	4 JULY 1, 2023]: Sec. 402.3. (1) Each:
	667	+	5 (a) creditor; and
	668	+	6 (b) person that is exempt (either under this article or under
	669	+	7 IC 24-4.5) from licensing to engage in mortgage loans and that:
	670	+	8 (i) employs a licensed mortgage loan originator; or
	671	+	9 (ii) sponsors under an exclusive written agreement, as
	672	+	10 permitted by IC 24-4.4-1-202(b)(6)(a), a licensed mortgage
	673	+	11 loan originator as an independent agent; permitted by
	674	+	12 IC 24-4.4-1-202(b)(8) or by 750 IAC 9;
	675	+	13 must be covered by a surety bond in accordance with this section.
	676	+	14 (2) A surety bond must:
	677	+	15 (a) provide coverage for:
	678	+	16 (i) a creditor; or
	679	+	17 (ii) a person that is exempt from licensing and that employs a
	680	+	18 licensed mortgage loan originator, or that sponsors under an
	681	+	19 exclusive written agreement (as permitted by
	682	+	20 IC 24-4.4-1-202(b)(6)(a)) a licensed mortgage loan originator
	683	+	21 as an independent agent; permitted by IC 24-4.4-1-202(b)(8)
	684	+	22 or by 750 IAC 9;
	685	+	23 in an amount as prescribed in subsection (4);
	686	+	24 (b) be in a form prescribed by the director;
	687	+	25 (c) be in effect:
	688	+	26 (i) during the term of the creditor's license; or
	689	+	27 (ii) at any time during which the person exempt from licensing
	690	+	28 employs a licensed mortgage loan originator or sponsors under
	691	+	29 an exclusive written agreement (as permitted by
	692	+	30 IC 24-4.4-1-202(b)(6)(a)) a licensed mortgage loan originator
	693	+	31 as an independent agent; permitted by IC 24-4.4-1-202(b)(8)
	694	+	32 or by 750 IAC 9;
	695	+	33 as applicable;
	696	+	34 (d) subject to subsection (3), remain in effect during the two (2)
	697	+	35 years after:
	698	+	36 (i) the license of the creditor is surrendered or terminated; or
	699	+	37 (ii) the person exempt from licensing ceases to employ a
	700	+	38 licensed mortgage loan originator, or ceases to sponsor under
	701	+	39 an exclusive written agreement (as permitted by
	702	+	40 IC 24-4.4-1-202(b)(6)(a)) a licensed mortgage loan originator
	703	+	41 as an independent agent, permitted by IC 24-4.4-1-202(b)(8)
	704	+	42 or by 750 IAC 9, or to offer financial services to individuals
	705	+	ES 452—LS 7232/DI 101 16
	706	+	1 in Indiana, whichever is later;
	707	+	2 as applicable;
	708	+	3 (e) be payable to the department for the benefit of:
	709	+	4 (i) the state; and
	710	+	5 (ii) individuals who reside in Indiana when they agree to
	711	+	6 receive financial services from the creditor or the person
	712	+	7 exempt from licensing, as applicable;
	713	+	8 (f) be issued by a bonding, surety, or insurance company
	714	+	9 authorized to do business in Indiana and rated at least "A-" by at
	715	+	10 least one (1) nationally recognized investment rating service; and
	716	+	11 (g) have payment conditioned upon:
	717	+	12 (i) the creditor's or any of the creditor's licensed mortgage loan
	718	+	13 originators'; or
	719	+	14 (ii) the exempt person's or any of the exempt person's licensed
	720	+	15 mortgage loan originators';
	721	+	16 noncompliance with or violation of this chapter, 750 IAC 9, or
	722	+	17 other federal or state laws or regulations applicable to mortgage
	723	+	18 lending.
	724	+	19 (3) The director may adopt rules or guidance documents with
	725	+	20 respect to the requirements for a surety bond as necessary to
	726	+	21 accomplish the purposes of this article. Upon written request from:
	727	+	22 (a) a creditor described in subsection (1)(a); or
	728	+	23 (b) an exempt person described in subsection (1)(b);
	729	+	24 the director may, at the discretion of the director, waive or shorten the
	730	+	25 two (2) year period set forth in subsection (2)(d) during which a surety
	731	+	26 bond required by this section must remain in effect after the occurrence
	732	+	27 of an event described in subsection (2)(d)(i) or (2)(d)(ii), as applicable.
	733	+	28 (4) The penal sum of the surety bond shall be maintained in an
	734	+	29 amount that reflects the dollar amount of mortgage transactions
	735	+	30 originated as determined by the director. If the principal amount of a
	736	+	31 surety bond required under this section is reduced by payment of a
	737	+	32 claim or judgment, the creditor or exempt person for whom the bond
	738	+	33 is issued shall immediately notify the director of the reduction and, not
	739	+	34 later than thirty (30) days after notice by the director, file a new or an
	740	+	35 additional surety bond in an amount set by the director. The amount of
	741	+	36 the new or additional bond set by the director must be at least the
	742	+	37 amount of the bond before payment of the claim or judgment.
	743	+	38 (5) If for any reason a surety terminates a bond issued under this
	744	+	39 section, the creditor or the exempt person shall immediately notify the
	745	+	40 department and file a new surety bond in an amount determined by the
	746	+	41 director.
	747	+	42 (6) Cancellation of a surety bond issued under this section does not
	748	+	ES 452—LS 7232/DI 101 17
	749	+	1 affect any liability incurred or accrued during the period when the
	750	+	2 surety bond was in effect.
	751	+	3 (7) The director may obtain satisfaction from a surety bond issued
	752	+	4 under this section if the director incurs expenses, issues a final order,
	753	+	5 or recovers a final judgment under this chapter.
	754	+	6 (8) Notices required under this section must be made in writing and
	755	+	7 submitted through the NMLSR or any other electronic registration
	756	+	8 system that may be approved by the director.
	757	+	9 SECTION 6. IC 24-4.4-2-402.4, AS AMENDED BY P.L.176-2019,
	758	+	10 SECTION 4, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
	759	+	11 JULY 1, 2023]: Sec. 402.4. (1) Subject to subsection (6), the director
	760	+	12 shall designate the NMLSR to serve as the sole entity responsible for:
	761	+	13 (a) processing applications and renewals for mortgage licenses;
	762	+	14 (b) issuing unique identifiers for licensees and entities persons
	763	+	15 exempt from licensing that employ or sponsor a licensed
	764	+	16 mortgage loan originator under this article; and
	765	+	17 (c) performing other services that the director determines are
	766	+	18 necessary for the orderly administration of the department's
	767	+	19 mortgage licensing system.
	768	+	20 (2) Subject to the confidentiality provisions contained in IC 5-14-3,
	769	+	21 this section, and IC 28-1-2-30, the director may regularly report
	770	+	22 significant or recurring violations of this article to the NMLSR.
	771	+	23 (3) Subject to the confidentiality provisions contained in IC 5-14-3,
	772	+	24 this section, and IC 28-1-2-30, the director may report complaints
	773	+	25 received regarding mortgage licensees to the NMLSR.
	774	+	26 (4) The director may report publicly adjudicated licensure actions
	775	+	27 against a licensee to the NMLSR.
	776	+	28 (5) The director shall establish a process in which licensees may
	777	+	29 challenge information reported to the NMLSR by the department.
	778	+	30 (6) The director's authority to designate the NMLSR under
	779	+	31 subsection (1) is subject to the following:
	780	+	32 (a) Information stored in the NMLSR is subject to the
	781	+	33 confidentiality provisions of IC 5-14-3 and IC 28-1-2-30. A
	782	+	34 person may not:
	783	+	35 (i) obtain information from the NMLSR, unless the person is
	784	+	36 authorized to do so by statute;
	785	+	37 (ii) initiate any civil action based on information obtained
	786	+	38 from the NMLSR if the information is not otherwise available
	787	+	39 to the person under any other state law; or
	788	+	40 (iii) initiate any civil action based on information obtained
	789	+	41 from the NMLSR if the person could not have initiated the
	790	+	42 action based on information otherwise available to the person
	791	+	ES 452—LS 7232/DI 101 18
	792	+	1 under any other state law.
	793	+	2 (b) Documents, materials, and other forms of information in the
	794	+	3 control or possession of the NMLSR that are confidential under
	795	+	4 IC 28-1-2-30 and that are:
	796	+	5 (i) furnished by the director, the director's designee, or a
	797	+	6 licensee; or
	798	+	7 (ii) otherwise obtained by the NMLSR;
	799	+	8 are confidential and privileged by law and are not subject to
	800	+	9 inspection under IC 5-14-3, subject to subpoena, subject to
	801	+	10 discovery, or admissible in evidence in any civil action. However,
	802	+	11 the director may use the documents, materials, or other
	803	+	12 information available to the director in furtherance of any action
	804	+	13 brought in connection with the director's duties under this article.
	805	+	14 (c) Disclosure of documents, materials, and information:
	806	+	15 (i) to the director; or
	807	+	16 (ii) by the director;
	808	+	17 under this subsection does not result in a waiver of any applicable
	809	+	18 privilege or claim of confidentiality with respect to the
	810	+	19 documents, materials, or information.
	811	+	20 (d) Information provided to the NMLSR is subject to IC 4-1-11.
	812	+	21 (e) This subsection does not limit or impair a person's right to:
	813	+	22 (i) obtain information;
	814	+	23 (ii) use information as evidence in a civil action or proceeding;
	815	+	24 or
	816	+	25 (iii) use information to initiate a civil action or proceeding;
	817	+	26 if the information may be obtained from the director or the
	818	+	27 director's designee under any law.
	819	+	28 (f) Except as otherwise provided in the federal Housing and
	820	+	29 Economic Recovery Act of 2008 (Public Law 110-289, Section
	821	+	30 1512), the requirements under any federal law or IC 5-14-3
	822	+	31 regarding the privacy or confidentiality of any information or
	823	+	32 material provided to the NMLSR, and any privilege arising under
	824	+	33 federal or state law, including the rules of any federal or state
	825	+	34 court, with respect to the information or material, continue to
	826	+	35 apply to the information or material after the information or
	827	+	36 material has been disclosed to the NMLSR. The information and
	828	+	37 material may be shared with all state and federal regulatory
	829	+	38 officials with mortgage industry oversight authority without the
	830	+	39 loss of privilege or the loss of confidentiality protections provided
	831	+	40 by federal law or IC 5-14-3.
	832	+	41 (g) For purposes of this section, the director may enter agreements
	833	+	42 or sharing arrangements with other governmental agencies, the
	834	+	ES 452—LS 7232/DI 101 19
	835	+	1 Conference of State Bank Supervisors, the American Association
	836	+	2 of Residential Mortgage Regulators, or other associations
	837	+	3 representing governmental agencies, as established by rule or
	838	+	4 order of the director.
	839	+	5 (h) Information or material that is subject to a privilege or
	840	+	6 confidentiality under subdivision (f) is not subject to:
	841	+	7 (i) disclosure under any federal or state law governing the
	842	+	8 disclosure to the public of information held by an officer or an
	843	+	9 agency of the federal government or the respective state; or
	844	+	10 (ii) subpoena, discovery, or admission into evidence in any
	845	+	11 private civil action or administrative process, unless with
	846	+	12 respect to any privilege held by the NMLSR with respect to
	847	+	13 the information or material, the person to whom the
	848	+	14 information or material pertains waives, in whole or in part, in
	849	+	15 the discretion of the person, that privilege.
	850	+	16 (i) Any provision of IC 5-14-3 that concerns the disclosure of:
	851	+	17 (i) confidential supervisory information; or
	852	+	18 (ii) any information or material described in subdivision (f);
	853	+	19 and that is inconsistent with subdivision (f) is superseded by this
	854	+	20 section.
	855	+	21 (j) This section does not apply with respect to information or
	856	+	22 material that concerns the employment history of, and publicly
	857	+	23 adjudicated disciplinary and enforcement actions against, a
	858	+	24 person described in section 402(2) of this chapter and that is
	859	+	25 included in the NMLSR for access by the public.
	860	+	26 (k) The director may require a licensee required to submit
	861	+	27 information to the NMLSR to pay a processing fee considered
	862	+	28 reasonable by the director. In determining whether an NMLSR
	863	+	29 processing fee is reasonable, the director shall:
	864	+	30 (i) require review of; and
	865	+	31 (ii) make available;
	866	+	32 the audited financial statements of the NMLSR.
	867	+	33 (7) Notwithstanding any other provision of law, any:
	868	+	34 (a) application, renewal, or other form or document that:
	869	+	35 (i) relates to mortgage licenses issued by the department; and
	870	+	36 (ii) is made or produced in an electronic format;
	871	+	37 (b) document filed as an electronic record in a multistate
	872	+	38 automated repository established and operated for the licensing or
	873	+	39 registration of mortgage lenders, brokers, or loan originators; or
	874	+	40 (c) electronic record filed through the NMLSR;
	875	+	41 is considered a valid original document when reproduced in paper form
	876	+	42 by the department.
	877	+	ES 452—LS 7232/DI 101 20
	878	+	1 SECTION 7. IC 24-4.4-2-405, AS AMENDED BY P.L.69-2018,
	879	+	2 SECTION 9, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
	880	+	3 JULY 1, 2023]: Sec. 405. (1) Every licensee shall maintain records in
	881	+	4 a manner that will enable the department to determine whether the
	882	+	5 licensee is complying with this article. The record keeping system of
	883	+	6 a licensee is sufficient if the licensee makes the required information
	884	+	7 reasonably available. The department shall determine the sufficiency
	885	+	8 of the records and whether the licensee has made the required
	886	+	9 information reasonably available. The department shall be given free
	887	+	10 access to the records wherever the records are located. Records
	888	+	11 concerning any first lien mortgage transaction shall be retained for two
	889	+	12 (2) years after the making of the final entry relating to the transaction,
	890	+	13 but in the case of a revolving first lien mortgage transaction, the two (2)
	891	+	14 years required under this subsection is measured from the date of each
	892	+	15 entry relating to the transaction. A federal savings bank person that
	893	+	16 voluntarily registers with the department under
	894	+	17 IC 24-4.4-1-202(b)(6)(a) IC 24-4.4-1-202(b)(8) for the purpose of
	895	+	18 sponsoring under an exclusive written agreement, licensed mortgage
	896	+	19 loan originators as independent agents shall:
	897	+	20 (a) cooperate with the department; and
	898	+	21 (b) provide access to records and documents;
	899	+	22 as required by the department in carrying out examinations of the
	900	+	23 activities of the licensed mortgage loan originators sponsored by the
	901	+	24 federal savings bank. person.
	902	+	25 (2) The unique identifier of any person originating a mortgage
	903	+	26 transaction must be clearly shown on all mortgage transaction
	904	+	27 application forms and any other documents as required by the director.
	905	+	28 (3) Every licensee shall use automated examination and regulatory
	906	+	29 software designated by the director, including third party software. Use
	907	+	30 of the software consistent with guidance and policies issued by the
	908	+	31 director is not a violation of IC 28-1-2-30.
	909	+	32 (4) Each:
	910	+	33 (a) creditor licensed to engage in mortgage transactions by the
	911	+	34 department; and
	912	+	35 (b) entity person that is exempt from licensing and that:
	913	+	36 (i) employs one (1) or more licensed mortgage loan
	914	+	37 originators; or
	915	+	38 (ii) sponsors under an exclusive written agreement, as
	916	+	39 permitted by IC 24-4.4-1-202(b)(6)(a), one (1) or more
	917	+	40 licensed mortgage originators as independent agents;
	918	+	41 permitted by IC 24-4.4-1-202(b)(8) or by 750 IAC 9;
	919	+	42 shall submit to the NMLSR reports of condition, which must be in a
	920	+	ES 452—LS 7232/DI 101 21
	921	+	1 form and must contain information as required by the NMLSR.
	922	+	2 (5) Each:
	923	+	3 (a) creditor licensed by the department to engage in mortgage
	924	+	4 transactions; and
	925	+	5 (b) entity person that is exempt from licensing by the department
	926	+	6 to engage in mortgage transactions and that:
	927	+	7 (i) employs one (1) or more licensed mortgage loan
	928	+	8 originators; or
	929	+	9 (ii) sponsors under an exclusive written agreement, as
	930	+	10 permitted by IC 24-4.4-1-202(b)(6)(a), one (1) or more
	931	+	11 licensed mortgage loan originators as independent agents;
	932	+	12 permitted by IC 24-4.4-1-202(b)(8) or by 750 IAC 9;
	933	+	13 shall file with the department additional financial statements relating
	934	+	14 to all first lien mortgage transactions originated by the licensed creditor
	935	+	15 or the exempt entity person as required by the department, but not
	936	+	16 more frequently than annually, in the form prescribed by the
	937	+	17 department.
	938	+	18 (6) A licensed creditor shall file notification with the department if
	939	+	19 the licensee:
	940	+	20 (a) has a change in name, address, or any of its principals;
	941	+	21 (b) opens a new branch, closes an existing branch, or relocates an
	942	+	22 existing branch;
	943	+	23 (c) files for bankruptcy or reorganization; or
	944	+	24 (d) is subject to revocation or suspension proceedings by a state
	945	+	25 or governmental authority with regard to the licensed creditor's
	946	+	26 activities;
	947	+	27 not later than thirty (30) days after the date of the event described in
	948	+	28 this subsection.
	949	+	29 (7) A licensee shall file notification with the department if the
	950	+	30 licensee or any director, executive officer, or manager of the licensee
	951	+	31 has been convicted of a felony under the laws of Indiana or any other
	952	+	32 jurisdiction. The licensee shall file the notification required by this
	953	+	33 subsection not later than thirty (30) days after the date of the event
	954	+	34 described in this subsection.
	955	+	35 (8) A licensee shall file notification with the department if the
	956	+	36 licensee or any director, executive officer, or manager of the licensee
	957	+	37 has had the person's authority to do business in the securities,
	958	+	38 commodities, banking, financial services, insurance, real estate, or real
	959	+	39 estate appraisal industry revoked or suspended by Indiana or by any
	960	+	40 other state, federal, or foreign governmental agency or self regulatory
	961	+	41 organization. The licensee shall file the notification required by this
	962	+	42 subsection not later than thirty (30) days after the date of the event
	963	+	ES 452—LS 7232/DI 101 22
	964	+	1 described in this subsection.
	965	+	2 SECTION 8. IC 24-4.5-1-102, AS AMENDED BY P.L.29-2022,
	966	+	3 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
	967	+	4 JULY 1, 2023]: Sec. 102. (1) This article shall be liberally construed
	968	+	5 and applied to promote its underlying purposes and policies.
	969	+	6 (2) The underlying purposes and policies of this article are:
	970	+	7 (a) to simplify, clarify, and modernize the law governing retail
	971	+	8 installment sales, consumer credit, small loans, and usury;
	972	+	9 (b) to provide rate ceilings to assure an adequate supply of credit
	973	+	10 to consumers;
	974	+	11 (c) to further consumer understanding of the terms of credit
	975	+	12 transactions and to foster competition among suppliers of
	976	+	13 consumer credit so that consumers may obtain credit at
	977	+	14 reasonable cost;
	978	+	15 (d) to protect consumer buyers, lessees, and borrowers against
	979	+	16 unfair practices by some suppliers of consumer credit, having due
	980	+	17 regard for the interests of legitimate and scrupulous creditors;
	981	+	18 (e) to permit and encourage the development of fair and
	982	+	19 economically sound consumer credit practices;
	983	+	20 (f) to conform the regulation of consumer credit transactions to
	984	+	21 the policies of the Consumer Credit Protection Act (15 U.S.C.
	985	+	22 1601 et seq.) and to applicable state and federal laws, rules,
	986	+	23 regulations, policies, and guidance; and
	987	+	24 (g) to make uniform the law, including administrative rules
	988	+	25 among the various jurisdictions.
	989	+	26 (3) A reference to a requirement imposed by this article includes
	990	+	27 reference to a related rule or guidance of the department adopted
	991	+	28 pursuant to this article.
	992	+	29 (4) A reference to a federal law in this article is a reference to the
	993	+	30 law as in effect December 31, 2021. 2022.
	994	+	31 (5) This article applies to a transaction if the director determines
	995	+	32 that the transaction:
	996	+	33 (a) is in substance a disguised consumer credit transaction; or
	997	+	34 (b) involves the application of subterfuge for the purpose of
	998	+	35 avoiding this article.
	999	+	36 A determination by the director under this subsection must be in
	1000	+	37 writing and shall be delivered to all parties to the transaction.
	1001	+	38 IC 4-21.5-3 applies to a determination made under this subsection.
	1002	+	39 (6) The authority of this article remains in effect, whether a licensee,
	1003	+	40 an individual, or a person subject to this article acts or claims to act
	1004	+	41 under any licensing or registration law of this state, or claims to act
	1005	+	42 without such authority.
	1006	+	ES 452—LS 7232/DI 101 23
	1007	+	1 (7) A violation of a state or federal law, regulation, or rule
	1008	+	2 applicable to consumer credit transactions is a violation of this article.
	1009	+	3 (8) The department may enforce penalty provisions set forth in 15
	1010	+	4 U.S.C. 1640 for violations of disclosure requirements applicable to
	1011	+	5 mortgage transactions.
	1012	+	6 SECTION 9. IC 24-4.5-1-301.5, AS AMENDED BY P.L.176-2019,
	1013	+	7 SECTION 12, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
	1014	+	8 JULY 1, 2023]: Sec. 301.5. In addition to definitions appearing in
	1015	+	9 subsequent chapters in this article, the following definitions apply
	1016	+	10 throughout this article:
	1017	+	11 (1) "Affiliate", with respect to any person subject to this article,
	1018	+	12 means a person that, directly or indirectly, through one (1) or more
	1019	+	13 intermediaries:
	1020	+	14 (a) controls;
	1021	+	15 (b) is controlled by; or
	1022	+	16 (c) is under common control with;
	1023	+	17 the person subject to this article.
	1024	+	18 (2) "Agreement" means the bargain of the parties in fact as found in
	1025	+	19 their language or by implication from other circumstances, including
	1026	+	20 course of dealing or usage of trade or course of performance.
	1027	+	21 (3) "Agricultural purpose" means a purpose related to the
	1028	+	22 production, harvest, exhibition, marketing, transportation, processing,
	1029	+	23 or manufacture of agricultural products by a natural person who
	1030	+	24 cultivates, plants, propagates, or nurtures the agricultural products.
	1031	+	25 "Agricultural products" includes agricultural, horticultural, viticultural,
	1032	+	26 and dairy products, livestock, wildlife, poultry, bees, forest products,
	1033	+	27 fish and shellfish, and any and all products raised or produced on farms
	1034	+	28 and any processed or manufactured products thereof.
	1035	+	29 (4) "Average daily balance" means the sum of each of the daily
	1036	+	30 balances in a billing cycle divided by the number of days in the billing
	1037	+	31 cycle, and if the billing cycle is a month, the creditor may elect to treat
	1038	+	32 the number of days in each billing cycle as thirty (30).
	1039	+	33 (5) "Closing costs" with respect to a subordinate lien mortgage
	1040	+	34 transaction includes:
	1041	+	35 (a) fees or premiums for title examination, title insurance, or
	1042	+	36 similar purposes, including surveys;
	1043	+	37 (b) fees for preparation of a deed, settlement statement, or other
	1044	+	38 documents;
	1045	+	39 (c) escrows for future payments of taxes and insurance;
	1046	+	40 (d) fees for notarizing deeds and other documents;
	1047	+	41 (e) appraisal fees; and
	1048	+	42 (f) fees for credit reports.
	1049	+	ES 452—LS 7232/DI 101 24
	1050	+	1 (6) "Conspicuous" refers to a term or clause when it is so written
	1051	+	2 that a reasonable person against whom it is to operate ought to have
	1052	+	3 noticed it.
	1053	+	4 (7) "Consumer credit" means credit offered or extended to a
	1054	+	5 consumer primarily for a personal, family, or household purpose.
	1055	+	6 (8) "Consumer credit sale" is a sale of goods, services, or an interest
	1056	+	7 in land in which:
	1057	+	8 (a) credit is granted by a person who regularly engages as a seller
	1058	+	9 in credit transactions of the same kind;
	1059	+	10 (b) the buyer is a person other than an organization;
	1060	+	11 (c) the goods, services, or interest in land are purchased primarily
	1061	+	12 for a personal, family, or household purpose;
	1062	+	13 (d) either the debt is payable in installments or a credit service
	1063	+	14 charge is made; and
	1064	+	15 (e) with respect to a sale of goods or services, either:
	1065	+	16 (i) the amount of credit extended, the written credit limit, or
	1066	+	17 the initial advance does not exceed the exempt threshold
	1067	+	18 amount, as adjusted in accordance with the annual adjustment
	1068	+	19 of the exempt threshold amount, specified in Regulation Z (12
	1069	+	20 CFR 226.3 or 12 CFR 1026.3(b), as applicable); or
	1070	+	21 (ii) the debt is secured by personal property used or expected
	1071	+	22 to be used as the principal dwelling of the buyer.
	1072	+	23 Unless the sale is made subject to this article by agreement
	1073	+	24 (IC 24-4.5-2-601), "consumer credit sale" does not include a sale
	1074	+	25 in which the seller allows the buyer to purchase goods or services
	1075	+	26 pursuant to a lender credit card or similar arrangement or, except
	1076	+	27 as provided with respect to disclosure (IC 24-4.5-2-301), debtors'
	1077	+	28 remedies (IC 24-4.5-5-201), providing payoff amounts
	1078	+	29 (IC 24-4.5-2-209), and powers and functions of the department
	1079	+	30 (IC 24-4.5-6), a sale of an interest in land which is a first lien
	1080	+	31 mortgage transaction.
	1081	+	32 (9) "Consumer loan" means a loan made by a person regularly
	1082	+	33 engaged in the business of making loans in which:
	1083	+	34 (a) the debtor is a person other than an organization;
	1084	+	35 (b) the debt is primarily for a personal, family, or household
	1085	+	36 purpose;
	1086	+	37 (c) either the debt is payable in installments or a loan finance
	1087	+	38 charge is made; and
	1088	+	39 (d) either:
	1089	+	40 (i) the amount of credit extended, the written credit limit, or
	1090	+	41 the initial advance does not exceed the exempt threshold
	1091	+	42 amount, as adjusted in accordance with the annual adjustment
	1092	+	ES 452—LS 7232/DI 101 25
	1093	+	1 of the exempt threshold amount, specified in Regulation Z (12
	1094	+	2 CFR 226.3 or 12 CFR 1026.3(b), as applicable); or
	1095	+	3 (ii) the debt is secured by an interest in land or by personal
	1096	+	4 property used or expected to be used as the principal dwelling
	1097	+	5 of the debtor.
	1098	+	6 Except as described in IC 24-4.5-3-105, the term does not include a
	1099	+	7 first lien mortgage transaction.
	1100	+	8 (10) "Credit" means the right granted by a creditor to a debtor to
	1101	+	9 defer payment of debt or to incur debt and defer its payment.
	1102	+	10 (11) "Creditor" means a person:
	1103	+	11 (a) who regularly engages in the extension of consumer credit that
	1104	+	12 is subject to a credit service charge or loan finance charge, as
	1105	+	13 applicable, or is payable by written agreement in more than four
	1106	+	14 (4) installments (not including a down payment); and
	1107	+	15 (b) to whom the obligation is initially payable, either on the face
	1108	+	16 of the note or contract, or by agreement when there is not a note
	1109	+	17 or contract.
	1110	+	18 (12) "Depository institution" has the meaning set forth in the
	1111	+	19 Federal Deposit Insurance Act (12 U.S.C. 1813(c)) and includes any
	1112	+	20 credit union.
	1113	+	21 (13) "Director" means the director of the department of financial
	1114	+	22 institutions or the director's designee.
	1115	+	23 (14) "Dwelling" means a residential structure that contains one (1)
	1116	+	24 to four (4) units, regardless of whether the structure is attached to real
	1117	+	25 property. The term includes an individual:
	1118	+	26 (a) condominium unit;
	1119	+	27 (b) cooperative unit;
	1120	+	28 (c) mobile home; or
	1121	+	29 (d) trailer;
	1122	+	30 that is used as a residence.
	1123	+	31 (15) "Earnings" means compensation paid or payable for personal
	1124	+	32 services, whether denominated as wages, salary, commission, bonus,
	1125	+	33 or otherwise, and includes periodic payments under a pension or
	1126	+	34 retirement program.
	1127	+	35 (16) "Employee" means an individual who is paid wages or other
	1128	+	36 compensation by an employer required under federal income tax law
	1129	+	37 to file Form W-2 on behalf of the individual.
	1130	+	38 (17) "Federal banking agencies" means the Board of Governors of
	1131	+	39 the Federal Reserve System, the Office of the Comptroller of the
	1132	+	40 Currency, the National Credit Union Administration, and the Federal
	1133	+	41 Deposit Insurance Corporation.
	1134	+	42 (18) "First lien mortgage transaction" means:
	1135	+	ES 452—LS 7232/DI 101 26
	1136	+	1 (a) a consumer loan; or
	1137	+	2 (b) a consumer credit sale;
	1138	+	3 that is or will be used by the debtor primarily for personal, family, or
	1139	+	4 household purposes and that is secured by a mortgage or a land
	1140	+	5 contract (or another consensual security interest equivalent to a
	1141	+	6 mortgage or a land contract) that constitutes a first lien on a dwelling
	1142	+	7 or on residential real estate upon which a dwelling is constructed or
	1143	+	8 intended to be constructed.
	1144	+	9 (19) "Immediate family member" means a spouse, child, sibling,
	1145	+	10 parent, grandparent, or grandchild. The term includes stepparents,
	1146	+	11 stepchildren, stepsiblings, and adoptive relationships.
	1147	+	12 (20) "Individual" means a natural person.
	1148	+	13 (21) "Lender credit card or similar arrangement" means an
	1149	+	14 arrangement or loan agreement, other than a seller credit card, pursuant
	1150	+	15 to which a lender gives a debtor the privilege of using a credit card,
	1151	+	16 letter of credit, or other credit confirmation or identification in
	1152	+	17 transactions out of which debt arises:
	1153	+	18 (a) by the lender's honoring a draft or similar order for the
	1154	+	19 payment of money drawn or accepted by the debtor;
	1155	+	20 (b) by the lender's payment or agreement to pay the debtor's
	1156	+	21 obligations; or
	1157	+	22 (c) by the lender's purchase from the obligee of the debtor's
	1158	+	23 obligations.
	1159	+	24 (22) "Licensee" means a person licensed as a creditor under this
	1160	+	25 article.
	1161	+	26 (23) "Loan brokerage business" means any activity in which a
	1162	+	27 person, in return for any consideration from any source, procures,
	1163	+	28 attempts to procure, or assists in procuring, a mortgage transaction
	1164	+	29 from a third party or any other person, whether or not the person
	1165	+	30 seeking the mortgage transaction actually obtains the mortgage
	1166	+	31 transaction.
	1167	+	32 (24) "Loan processor or underwriter" means an individual who
	1168	+	33 performs clerical or support duties as an employee at the direction of,
	1169	+	34 and subject to the supervision and instruction of, a person licensed to
	1170	+	35 engage in mortgage transactions or a person exempt from licensing. For
	1171	+	36 purposes of this subsection, the term "clerical or support duties" may
	1172	+	37 include, after the receipt of an application, the following:
	1173	+	38 (a) The receipt, collection, distribution, and analysis of
	1174	+	39 information common for the processing or underwriting of a
	1175	+	40 mortgage transaction.
	1176	+	41 (b) The communication with a consumer to obtain the information
	1177	+	42 necessary for the processing or underwriting of a loan, to the
	1178	+	ES 452—LS 7232/DI 101 27
	1179	+	1 extent that the communication does not include:
	1180	+	2 (i) offering or negotiating loan rates or terms; or
	1181	+	3 (ii) counseling consumers about mortgage transaction rates or
	1182	+	4 terms.
	1183	+	5 The term does not include an individual who is an employee of a
	1184	+	6 person that is not engaged in mortgage transactions as a creditor
	1185	+	7 if that person is permitted to voluntarily register with the
	1186	+	8 department to sponsor the individual under IC 24-4.4-1-202(b)(8)
	1187	+	9 to engage solely in the activities described in this subdivision. An
	1188	+	10 individual engaging solely in loan processor or underwriter activities
	1189	+	11 shall not represent to the public through advertising or other means of
	1190	+	12 communicating or providing information, including the use of business
	1191	+	13 cards, stationery, brochures, signs, rate lists, or other promotional
	1192	+	14 items, that the individual can or will perform any of the activities of a
	1193	+	15 mortgage loan originator. However, an individual who is licensed as
	1194	+	16 a mortgage loan originator under IC 24-4.4 and 750 IAC 9-3, and
	1195	+	17 who is sponsored by a person, as permitted by
	1196	+	18 IC 24-4.4-1-202(b)(8), to engage solely as a third party loan
	1197	+	19 processor or underwriter, is subject to the prohibition set forth in
	1198	+	20 this subdivision with respect to the individual's engagement under
	1199	+	21 the sponsorship.
	1200	+	22 (25) "Mortgage loan originator" means an individual who, for
	1201	+	23 compensation or gain, or in the expectation of compensation or gain,
	1202	+	24 regularly engages in taking a mortgage transaction application or in
	1203	+	25 offering or negotiating the terms of a mortgage transaction that either
	1204	+	26 is made under this article or under IC 24-4.4 or is made by an employee
	1205	+	27 of a person licensed to engage in mortgage transactions or by an
	1206	+	28 employee of a person that is exempt from licensing, while the employee
	1207	+	29 is engaging in the loan brokerage business. The term does not include
	1208	+	30 the following:
	1209	+	31 (a) An individual engaged solely as a loan processor or
	1210	+	32 underwriter as long as the individual works exclusively as an
	1211	+	33 employee of a person licensed to engage in mortgage transactions
	1212	+	34 or as an employee of a person exempt from licensing. However,
	1213	+	35 the term includes an individual who is licensed as a mortgage
	1214	+	36 loan originator under IC 24-4.4 and 750 IAC 9-3 and who is
	1215	+	37 an employee of a person that is not engaged in mortgage
	1216	+	38 transactions as a creditor if that person voluntarily registers
	1217	+	39 with the department to sponsor the individual under
	1218	+	40 IC 24-4.4-1-202(b)(8), to engage solely as a third party
	1219	+	41 processor or underwriter.
	1220	+	42 (b) Unless the person or entity is compensated by:
	1221	+	ES 452—LS 7232/DI 101 28
	1222	+	1 (i) a creditor;
	1223	+	2 (ii) a loan broker;
	1224	+	3 (iii) another mortgage loan originator; or
	1225	+	4 (iv) any agent of the creditor, loan broker, or other mortgage
	1226	+	5 loan originator described in items (i) through (iii);
	1227	+	6 a person or entity that only performs real estate brokerage
	1228	+	7 activities and is licensed or registered in accordance with
	1229	+	8 applicable state law.
	1230	+	9 (c) A person solely involved in extensions of credit relating to
	1231	+	10 timeshare plans (as defined in 11 U.S.C. 101(53D)).
	1232	+	11 (26) "Mortgage servicer" means the last person to whom a
	1233	+	12 mortgagor or the mortgagor's successor in interest has been instructed
	1234	+	13 by a mortgagee to send payments on a loan secured by a mortgage.
	1235	+	14 (27) "Mortgage transaction" means:
	1236	+	15 (a) a consumer loan; or
	1237	+	16 (b) a consumer credit sale;
	1238	+	17 that is or will be used by the debtor primarily for personal, family, or
	1239	+	18 household purposes and that is secured by a mortgage or a land
	1240	+	19 contract (or another consensual security interest equivalent to a
	1241	+	20 mortgage or a land contract) on a dwelling or on residential real estate
	1242	+	21 upon which a dwelling is constructed or intended to be constructed.
	1243	+	22 (28) "Nationwide Multistate Licensing System and Registry" (or
	1244	+	23 "Nationwide Mortgage Licensing System and Registry" or "NMLSR")
	1245	+	24 means a multistate licensing system owned and operated by the State
	1246	+	25 Regulatory Registry, LLC, or by any successor or affiliated entity, for
	1247	+	26 the licensing and registration of creditors, mortgage loan originators,
	1248	+	27 and other persons in the mortgage or financial services industries. The
	1249	+	28 term includes any other name or acronym that may be assigned to the
	1250	+	29 system by the State Regulatory Registry, LLC, or by any successor or
	1251	+	30 affiliated entity.
	1252	+	31 (29) "Nontraditional mortgage product" means any mortgage
	1253	+	32 product other than a thirty (30) year fixed rate mortgage.
	1254	+	33 (30) "Official fees" means:
	1255	+	34 (a) fees and charges prescribed by law which actually are or will
	1256	+	35 be paid to public officials for determining the existence of or for
	1257	+	36 perfecting, releasing, or satisfying a security interest related to a
	1258	+	37 consumer credit sale, consumer lease, or consumer loan; or
	1259	+	38 (b) premiums payable for insurance in lieu of perfecting a security
	1260	+	39 interest otherwise required by the creditor in connection with the
	1261	+	40 sale, lease, or loan, if the premium does not exceed the fees and
	1262	+	41 charges described in subdivision (a) that would otherwise be
	1263	+	42 payable.
	1264	+	ES 452—LS 7232/DI 101 29
	1265	+	1 (31) "Organization" means a corporation, a government or
	1266	+	2 governmental subdivision, an agency, a trust, an estate, a partnership,
	1267	+	3 a limited liability company, a cooperative, an association, a joint
	1268	+	4 venture, an unincorporated organization, or any other entity, however
	1269	+	5 organized.
	1270	+	6 (32) "Payable in installments" means that payment is required or
	1271	+	7 permitted by written agreement to be made in more than four (4)
	1272	+	8 installments not including a down payment.
	1273	+	9 (33) "Person" includes an individual or an organization.
	1274	+	10 (34) "Person related to" with respect to an individual means:
	1275	+	11 (a) the spouse of the individual;
	1276	+	12 (b) a brother, brother-in-law, sister, or sister-in-law of the
	1277	+	13 individual;
	1278	+	14 (c) an ancestor or lineal descendants of the individual or the
	1279	+	15 individual's spouse; and
	1280	+	16 (d) any other relative, by blood or marriage, of the individual or
	1281	+	17 the individual's spouse who shares the same home with the
	1282	+	18 individual.
	1283	+	19 (35) "Person related to" with respect to an organization means:
	1284	+	20 (a) a person directly or indirectly controlling, controlled by, or
	1285	+	21 under common control with the organization;
	1286	+	22 (b) a director, an executive officer, or a manager of the
	1287	+	23 organization or a person performing similar functions with respect
	1288	+	24 to the organization or to a person related to the organization;
	1289	+	25 (c) the spouse of a person related to the organization; and
	1290	+	26 (d) a relative by blood or marriage of a person related to the
	1291	+	27 organization who shares the same home with the person.
	1292	+	28 (36) "Presumed" or "presumption" means that the trier of fact must
	1293	+	29 find the existence of the fact presumed, unless and until evidence is
	1294	+	30 introduced that would support a finding of its nonexistence.
	1295	+	31 (37) "Real estate brokerage activity" means any activity that
	1296	+	32 involves offering or providing real estate brokerage services to the
	1297	+	33 public, including the following:
	1298	+	34 (a) Acting as a real estate agent or real estate broker for a buyer,
	1299	+	35 seller, lessor, or lessee of real property.
	1300	+	36 (b) Bringing together parties interested in the sale, purchase,
	1301	+	37 lease, rental, or exchange of real property.
	1302	+	38 (c) Negotiating, on behalf of any party, any part of a contract
	1303	+	39 relating to the sale, purchase, lease, rental, or exchange of real
	1304	+	40 property (other than in connection with providing financing with
	1305	+	41 respect to the sale, purchase, lease, rental, or exchange of real
	1306	+	42 property).
	1307	+	ES 452—LS 7232/DI 101 30
	1308	+	1 (d) Engaging in any activity for which a person is required to be
	1309	+	2 registered or licensed as a real estate agent or real estate broker
	1310	+	3 under any applicable law.
	1311	+	4 (e) Offering to engage in any activity, or act in any capacity,
	1312	+	5 described in this subsection.
	1313	+	6 (38) "Registered mortgage loan originator" means any individual
	1314	+	7 who:
	1315	+	8 (a) meets the definition of mortgage loan originator and is an
	1316	+	9 employee of:
	1317	+	10 (i) a depository institution;
	1318	+	11 (ii) a subsidiary that is owned and controlled by a depository
	1319	+	12 institution and regulated by a federal banking agency; or
	1320	+	13 (iii) an institution regulated by the Farm Credit
	1321	+	14 Administration; and
	1322	+	15 (b) is registered with, and maintains a unique identifier through,
	1323	+	16 the NMLSR.
	1324	+	17 (39) "Regularly engaged", with respect to a person who extends
	1325	+	18 consumer credit, refers to a person who:
	1326	+	19 (a) extended consumer credit:
	1327	+	20 (i) more than twenty-five (25) times; or
	1328	+	21 (ii) more than five (5) times for a mortgage transaction secured
	1329	+	22 by a dwelling;
	1330	+	23 in the preceding calendar year; or
	1331	+	24 (b) extends or will extend consumer credit:
	1332	+	25 (i) more than twenty-five (25) times; or
	1333	+	26 (ii) more than five (5) times for a mortgage transaction secured
	1334	+	27 by a dwelling;
	1335	+	28 in the current calendar year, if the person did not meet the
	1336	+	29 numerical standards described in subdivision (a) in the preceding
	1337	+	30 calendar year.
	1338	+	31 (40) "Residential real estate" means any real property that is located
	1339	+	32 in Indiana and on which there is located or intended to be constructed
	1340	+	33 a dwelling.
	1341	+	34 (41) "Seller credit card" means an arrangement that gives to a buyer
	1342	+	35 or lessee the privilege of using a credit card, letter of credit, or other
	1343	+	36 credit confirmation or identification for the purpose of purchasing or
	1344	+	37 leasing goods or services from that person, a person related to that
	1345	+	38 person, or from that person and any other person. The term includes a
	1346	+	39 card that is issued by a person, that is in the name of the seller, and that
	1347	+	40 can be used by the buyer or lessee only for purchases or leases at
	1348	+	41 locations of the named seller.
	1349	+	42 (42) "Subordinate lien mortgage transaction" means:
	1350	+	ES 452—LS 7232/DI 101 31
	1351	+	1 (a) a consumer loan; or
	1352	+	2 (b) a consumer credit sale;
	1353	+	3 that is or will be used by the debtor primarily for personal, family, or
	1354	+	4 household purposes and that is secured by a mortgage or a land
	1355	+	5 contract (or another consensual security interest equivalent to a
	1356	+	6 mortgage or a land contract) that constitutes a subordinate lien on a
	1357	+	7 dwelling or on residential real estate upon which a dwelling is
	1358	+	8 constructed or intended to be constructed.
	1359	+	9 (43) "Unique identifier" means a number or other identifier assigned
	1360	+	10 by protocols established by the NMLSR.
	1361	+	11 (44) "Land contract" means a contract for the sale of real estate in
	1362	+	12 which the seller of the real estate retains legal title to the real estate
	1363	+	13 until the total contract price is paid by the buyer.
	1364	+	14 (45) "Bona fide nonprofit organization" means an organization that
	1365	+	15 does the following, as determined by the director under criteria
	1366	+	16 established by the director:
	1367	+	17 (a) Maintains tax exempt status under Section 501(c)(3) of the
	1368	+	18 Internal Revenue Code.
	1369	+	19 (b) Promotes affordable housing or provides home ownership
	1370	+	20 education or similar services.
	1371	+	21 (c) Conducts the organization's activities in a manner that serves
	1372	+	22 public or charitable purposes.
	1373	+	23 (d) Receives funding and revenue and charges fees in a manner
	1374	+	24 that does not encourage the organization or the organization's
	1375	+	25 employees to act other than in the best interests of the
	1376	+	26 organization's clients.
	1377	+	27 (e) Compensates the organization's employees in a manner that
	1378	+	28 does not encourage employees to act other than in the best
	1379	+	29 interests of the organization's clients.
	1380	+	30 (f) Provides to, or identifies for, debtors mortgage transactions
	1381	+	31 with terms that are favorable to the debtor (as described in section
	1382	+	32 202(b)(15) of this chapter) and comparable to mortgage
	1383	+	33 transactions and housing assistance provided under government
	1384	+	34 housing assistance programs.
	1385	+	35 (g) Maintains certification by the United States Department of
	1386	+	36 Housing and Urban Development or employs counselors who are
	1387	+	37 certified by the Indiana housing and community development
	1388	+	38 authority.
	1389	+	39 SECTION 10. IC 24-4.5-3-502.1, AS AMENDED BY P.L.69-2018,
	1390	+	40 SECTION 19, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
	1391	+	41 JULY 1, 2023]: Sec. 502.1. (1) A person that is a:
	1392	+	42 (a) depository institution;
	1393	+	ES 452—LS 7232/DI 101 32
	1394	+	1 (b) subsidiary that is owned and controlled by a depository
	1395	+	2 institution and regulated by a federal banking agency; or
	1396	+	3 (c) credit union service organization;
	1397	+	4 may engage in Indiana in the making of subordinate lien mortgage
	1398	+	5 transactions without obtaining a mortgage license issued by the
	1399	+	6 department.
	1400	+	7 (2) A collection agency licensed under IC 25-11-1 or an institution
	1401	+	8 regulated by the Farm Credit Administration may engage in:
	1402	+	9 (a) taking assignments of subordinate lien mortgage transactions;
	1403	+	10 and
	1404	+	11 (b) undertaking the direct collection of payments from or the
	1405	+	12 enforcement of rights against debtors arising from subordinate
	1406	+	13 lien mortgage transactions;
	1407	+	14 in Indiana without obtaining a mortgage license issued by the
	1408	+	15 department.
	1409	+	16 (3) A person that is not otherwise exempt under subsection (1) or
	1410	+	17 (2) shall acquire and retain a mortgage license issued by the
	1411	+	18 department in order to regularly engage in Indiana in the following
	1412	+	19 actions with respect to subordinate lien mortgage transactions:
	1413	+	20 (a) The making of subordinate lien mortgage loans.
	1414	+	21 (b) Taking assignments of subordinate lien mortgage loans.
	1415	+	22 (c) Undertaking the direct collection of payments from or the
	1416	+	23 enforcement of rights against debtors arising from subordinate
	1417	+	24 lien mortgage loans.
	1418	+	25 (4) Each:
	1419	+	26 (a) creditor licensed by the department to engage in subordinate
	1420	+	27 lien mortgage transactions; and
	1421	+	28 (b) entity person that is exempt (either under this article or under
	1422	+	29 IC 24-4.4-1-202(b)(6)(a)) IC 24-4.4-1-202(b)(8)) from licensing
	1423	+	30 and that:
	1424	+	31 (i) employs a licensed mortgage loan originator; or
	1425	+	32 (ii) sponsors under an exclusive written agreement, as
	1426	+	33 permitted by IC 24-4.4-1-202(b)(6)(a), a licensed mortgage
	1427	+	34 loan originator as an independent agent; permitted by
	1428	+	35 IC 24-4.4-1-202(b)(8) or by 750 IAC 9;
	1429	+	36 shall register with and maintain a valid unique identifier issued by the
	1430	+	37 NMLSR. Each licensed mortgage loan originator must be employed by,
	1431	+	38 or sponsored under an exclusive written agreement (as permitted by
	1432	+	39 IC 24-4.4-1-202(b)(6)(a)) and as an independent agent, permitted by
	1433	+	40 IC 24-4.4-1-202(b)(8) or by 750 IAC 9, and associated with, a
	1434	+	41 licensed creditor (or an exempt entity person described under
	1435	+	42 subdivision (b)) that is registered with the NMLSR. in order to
	1436	+	ES 452—LS 7232/DI 101 33
	1437	+	1 originate loans.
	1438	+	2 (5) Applicants for a mortgage license must apply to the department
	1439	+	3 for the license in a form prescribed by the director. Each form:
	1440	+	4 (a) must contain content as set forth by rule, instruction, or
	1441	+	5 procedure of the director; and
	1442	+	6 (b) may be changed or updated as necessary by the director to
	1443	+	7 carry out the purposes of this article.
	1444	+	8 (6) To fulfill the purposes of this article, the director may establish
	1445	+	9 relationships or contracts with the NMLSR or other entities designated
	1446	+	10 by the NMLSR to:
	1447	+	11 (a) collect and maintain records; and
	1448	+	12 (b) process transaction fees or other fees;
	1449	+	13 related to licensees or other persons subject to this article.
	1450	+	14 (7) For the purpose of participating in the NMLSR, the director or
	1451	+	15 the department may:
	1452	+	16 (a) waive or modify, in whole or in part, by rule, regulation, or
	1453	+	17 order, any or all of the requirements of this article; and
	1454	+	18 (b) establish new requirements as reasonably necessary to
	1455	+	19 participate in the NMLSR.
	1456	+	20 SECTION 11. IC 24-4.5-3-503.3, AS AMENDED BY
	1457	+	21 P.L.129-2020, SECTION 7, IS AMENDED TO READ AS FOLLOWS
	1458	+	22 [EFFECTIVE JULY 1, 2023]: Sec. 503.3. (1) Each:
	1459	+	23 (a) creditor licensed by the department to engage in mortgage
	1460	+	24 transactions; and
	1461	+	25 (b) person that is exempt (either under this article or under
	1462	+	26 IC 24-4.4-1-202(b)(6)(a)) or IC 24-4.4-1-202(b)(8)) from
	1463	+	27 licensing and that:
	1464	+	28 (i) employs a licensed mortgage loan originator; or
	1465	+	29 (ii) sponsors under an exclusive written agreement, as
	1466	+	30 permitted by IC 24-4.4-1-202(b)(6)(a), a licensed mortgage
	1467	+	31 loan originator as an independent agent; permitted by
	1468	+	32 IC 24-4.4-1-202(b)(8) or by 750 IAC 9;
	1469	+	33 must be covered by a surety bond in accordance with this section.
	1470	+	34 (2) A surety bond must:
	1471	+	35 (a) provide coverage for:
	1472	+	36 (i) a creditor described in subsection (1)(a); and
	1473	+	37 (ii) an exempt person described in subsection (1)(b);
	1474	+	38 in an amount as prescribed in subsection (4);
	1475	+	39 (b) be in a form as prescribed by the director;
	1476	+	40 (c) be in effect:
	1477	+	41 (i) during the term of the creditor's license; or
	1478	+	42 (ii) at any time during which the person exempt from licensing
	1479	+	ES 452—LS 7232/DI 101 34
	1480	+	1 employs a licensed mortgage loan originator, or sponsors
	1481	+	2 under an exclusive written agreement (as permitted by
	1482	+	3 IC 24-4.4-1-202(b)(6)(a)) a licensed mortgage loan originator
	1483	+	4 as an independent agent; permitted by IC 24-4.4-1-202(b)(8)
	1484	+	5 or by 750 IAC 9;
	1485	+	6 as applicable;
	1486	+	7 (d) subject to subsection (3), remain in effect during the two (2)
	1487	+	8 years after:
	1488	+	9 (i) the license of the creditor is surrendered or terminated; or
	1489	+	10 (ii) the person exempt from licensing ceases to employ a
	1490	+	11 licensed mortgage loan originator, or ceases to sponsor under
	1491	+	12 an exclusive written agreement (as permitted by
	1492	+	13 IC 24-4.4-1-202(b)(6)(a)) a licensed mortgage loan originator
	1493	+	14 as an independent agent, permitted by IC 24-4.4-1-202(b)(8)
	1494	+	15 or by 750 IAC 9, or to offer financial services to individuals
	1495	+	16 in Indiana, whichever is later;
	1496	+	17 as applicable;
	1497	+	18 (e) be payable to the department for the benefit of:
	1498	+	19 (i) the state; and
	1499	+	20 (ii) individuals who reside in Indiana when they agree to
	1500	+	21 receive financial services from the creditor or the person
	1501	+	22 exempt from licensing, as applicable;
	1502	+	23 (f) be issued by a bonding, surety, or insurance company
	1503	+	24 authorized to do business in Indiana and rated at least "A-" by at
	1504	+	25 least one (1) nationally recognized investment rating service; and
	1505	+	26 (g) have payment conditioned upon:
	1506	+	27 (i) the creditor's or any of the creditor's licensed mortgage loan
	1507	+	28 originators'; or
	1508	+	29 (ii) the exempt person's or any of the exempt person's licensed
	1509	+	30 mortgage loan originators';
	1510	+	31 noncompliance with or violation of this chapter, 750 IAC 9, or
	1511	+	32 other federal or state laws or regulations applicable to mortgage
	1512	+	33 lending.
	1513	+	34 (3) The director may adopt rules or guidance documents with
	1514	+	35 respect to the requirements for surety bonds as necessary to accomplish
	1515	+	36 the purposes of this article. Upon written request from:
	1516	+	37 (a) a creditor described in subsection (1)(a); or
	1517	+	38 (b) an exempt person described in subsection (1)(b);
	1518	+	39 the director may, at the discretion of the director, waive or shorten the
	1519	+	40 two (2) year period set forth in subsection (2)(d) during which a surety
	1520	+	41 bond required by this section must remain in effect after the occurrence
	1521	+	42 of an event described in subsection (2)(d)(i) or (2)(d)(ii), as applicable.
	1522	+	ES 452—LS 7232/DI 101 35
	1523	+	1 (4) The penal sum of the surety bond shall be maintained in an
	1524	+	2 amount that reflects the dollar amount of mortgage transactions
	1525	+	3 originated as determined by the director. If the principal amount of a
	1526	+	4 surety bond required under this section is reduced by payment of a
	1527	+	5 claim or judgment, the creditor or exempt person for whom the bond
	1528	+	6 is issued shall immediately notify the director of the reduction and, not
	1529	+	7 later than thirty (30) days after notice by the director, file a new or an
	1530	+	8 additional surety bond in an amount set by the director. The amount of
	1531	+	9 the new or additional bond set by the director must be at least the
	1532	+	10 amount of the bond before payment of the claim or judgment.
	1533	+	11 (5) If for any reason a surety terminates a bond issued under this
	1534	+	12 section, the creditor or the exempt person shall immediately notify the
	1535	+	13 department and file a new surety bond in an amount determined by the
	1536	+	14 director.
	1537	+	15 (6) Cancellation of a surety bond issued under this section does not
	1538	+	16 affect any liability incurred or accrued during the period when the
	1539	+	17 surety bond was in effect.
	1540	+	18 (7) The director may obtain satisfaction from a surety bond issued
	1541	+	19 under this section if the director incurs expenses, issues a final order,
	1542	+	20 or recovers a final judgment under this chapter.
	1543	+	21 (8) Notices required under this section must be made in writing and
	1544	+	22 submitted through the NMLSR or any other electronic registration
	1545	+	23 system that may be approved by the director.
	1546	+	24 SECTION 12. IC 24-4.5-3-503.4, AS AMENDED BY
	1547	+	25 P.L.176-2019, SECTION 21, IS AMENDED TO READ AS
	1548	+	26 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 503.4. (1) Subject to
	1549	+	27 subsection (6), the director shall designate the NMLSR to serve as the
	1550	+	28 sole entity responsible for:
	1551	+	29 (a) processing applications and renewals for licenses under
	1552	+	30 section 502.1 of this chapter;
	1553	+	31 (b) issuing unique identifiers for licensees under section 502.1 of
	1554	+	32 this chapter and for entities persons exempt from licensing
	1555	+	33 (either under this article or under IC 24-4.4-1-202(b)(8)) that
	1556	+	34 employ licensed mortgage loan originators or that sponsor
	1557	+	35 licensed loan originators as permitted by
	1558	+	36 IC 24-4.4-1-202(b)(8) or by 750 IAC 9; and
	1559	+	37 (c) performing other services that the director determines
	1560	+	38 necessary for the orderly administration of the department's
	1561	+	39 licensing system under section 502.1 of this chapter.
	1562	+	40 (2) Subject to the confidentiality provisions contained in IC 5-14-3,
	1563	+	41 this section, and IC 28-1-2-30, the director may regularly report
	1564	+	42 significant or recurring violations of this article related to subordinate
	1565	+	ES 452—LS 7232/DI 101 36
	1566	+	1 lien mortgage transactions to the NMLSR.
	1567	+	2 (3) Subject to the confidentiality provisions contained in IC 5-14-3,
	1568	+	3 this section, and IC 28-1-2-30, the director may report complaints
	1569	+	4 received regarding licensees and relating to subordinate lien mortgage
	1570	+	5 transactions to the NMLSR.
	1571	+	6 (4) The director may report publicly adjudicated licensure actions
	1572	+	7 against licensees under section 502.1 of this chapter to the NMLSR.
	1573	+	8 (5) The director shall establish a process in which persons licensed
	1574	+	9 in accordance with section 502.1 of this chapter may challenge
	1575	+	10 information reported to the NMLSR by the department.
	1576	+	11 (6) The director's authority to designate the NMLSR under
	1577	+	12 subsection (1) is subject to the following:
	1578	+	13 (a) Information stored in the NMLSR is subject to the
	1579	+	14 confidentiality provisions of IC 28-1-2-30 and IC 5-14-3. A
	1580	+	15 person may not:
	1581	+	16 (i) obtain information from the NMLSR unless the person is
	1582	+	17 authorized to do so by statute;
	1583	+	18 (ii) initiate any civil action based on information obtained
	1584	+	19 from the NMLSR if the information is not otherwise available
	1585	+	20 to the person under any other state law; or
	1586	+	21 (iii) initiate any civil action based on information obtained
	1587	+	22 from the NMLSR if the person could not have initiated the
	1588	+	23 action based on information otherwise available to the person
	1589	+	24 under any other state law.
	1590	+	25 (b) Documents, materials, and other forms of information in the
	1591	+	26 control or possession of the NMLSR that are confidential under
	1592	+	27 IC 28-1-2-30 and that are:
	1593	+	28 (i) furnished by the director, the director's designee, or a
	1594	+	29 licensee; or
	1595	+	30 (ii) otherwise obtained by the NMLSR;
	1596	+	31 are confidential and privileged by law and are not subject to
	1597	+	32 inspection under IC 5-14-3, subject to subpoena, subject to
	1598	+	33 discovery, or admissible in evidence in any civil action. However,
	1599	+	34 the director may use the documents, materials, or other
	1600	+	35 information available to the director in furtherance of any action
	1601	+	36 brought in connection with the director's duties under this article.
	1602	+	37 (c) Disclosure of documents, materials, and information:
	1603	+	38 (i) to the director; or
	1604	+	39 (ii) by the director;
	1605	+	40 under this subsection does not result in a waiver of any applicable
	1606	+	41 privilege or claim of confidentiality with respect to the
	1607	+	42 documents, materials, or information.
	1608	+	ES 452—LS 7232/DI 101 37
	1609	+	1 (d) Information provided to the NMLSR is subject to IC 4-1-11.
	1610	+	2 (e) This subsection does not limit or impair a person's right to:
	1611	+	3 (i) obtain information;
	1612	+	4 (ii) use information as evidence in a civil action or proceeding;
	1613	+	5 or
	1614	+	6 (iii) use information to initiate a civil action or proceeding;
	1615	+	7 if the information may be obtained from the director or the
	1616	+	8 director's designee under any law.
	1617	+	9 (f) Except as otherwise provided in the federal Housing and
	1618	+	10 Economic Recovery Act of 2008, Public Law 110-289, Section
	1619	+	11 1512, the requirements under any federal law or IC 5-14-3
	1620	+	12 regarding the privacy or confidentiality of any information or
	1621	+	13 material provided to the NMLSR, and any privilege arising under
	1622	+	14 federal or state law, including the rules of any federal or state
	1623	+	15 court, with respect to the information or material, continue to
	1624	+	16 apply to the information or material after the information or
	1625	+	17 material has been disclosed to the NMLSR. The information and
	1626	+	18 material may be shared with all state and federal regulatory
	1627	+	19 officials with mortgage industry oversight authority without the
	1628	+	20 loss of privilege or the loss of confidentiality protections provided
	1629	+	21 by federal law or IC 5-14-3.
	1630	+	22 (g) For purposes of this section, the director may enter agreements
	1631	+	23 or sharing arrangements with other governmental agencies, the
	1632	+	24 Conference of State Bank Supervisors, the American Association
	1633	+	25 of Residential Mortgage Regulators, or other associations
	1634	+	26 representing governmental agencies as established by rule or
	1635	+	27 order of the director.
	1636	+	28 (h) Information or material that is subject to a privilege or
	1637	+	29 confidentiality under subdivision (f) is not subject to:
	1638	+	30 (i) disclosure under any federal or state law governing the
	1639	+	31 disclosure to the public of information held by an officer or an
	1640	+	32 agency of the federal government or the respective state; or
	1641	+	33 (ii) subpoena, discovery, or admission into evidence, in any
	1642	+	34 private civil action or administrative process, unless with
	1643	+	35 respect to any privilege held by the NMLSR with respect to
	1644	+	36 the information or material, the person to whom the
	1645	+	37 information or material pertains waives, in whole or in part, in
	1646	+	38 the discretion of the person, that privilege.
	1647	+	39 (i) Any provision of IC 5-14-3 that concerns the disclosure of:
	1648	+	40 (i) confidential supervisory information; or
	1649	+	41 (ii) any information or material described in subdivision (f);
	1650	+	42 and that is inconsistent with subdivision (f) is superseded by this
	1651	+	ES 452—LS 7232/DI 101 38
	1652	+	1 section.
	1653	+	2 (j) This section does not apply with respect to information or
	1654	+	3 material that concerns the employment history of, and publicly
	1655	+	4 adjudicated disciplinary and enforcement actions against, a
	1656	+	5 person licensed in accordance with section 502.1 of this chapter
	1657	+	6 and described in section 503(2) of this chapter and that is
	1658	+	7 included in the NMLSR for access by the public.
	1659	+	8 (k) The director may require a licensee required to submit
	1660	+	9 information to the NMLSR to pay a processing fee considered
	1661	+	10 reasonable by the director. In determining whether an NMLSR
	1662	+	11 processing fee is reasonable, the director shall:
	1663	+	12 (i) require review of; and
	1664	+	13 (ii) make available;
	1665	+	14 the audited financial statements of the NMLSR.
	1666	+	15 (7) Notwithstanding any other provision of law, any:
	1667	+	16 (a) application, renewal, or other form or document that:
	1668	+	17 (i) relates to mortgage licenses issued by the department; and
	1669	+	18 (ii) is made or produced in an electronic format;
	1670	+	19 (b) document filed as an electronic record in a multistate
	1671	+	20 automated repository established and operated for the licensing or
	1672	+	21 registration of mortgage lenders, brokers, or loan originators; or
	1673	+	22 (c) electronic record filed through the NMLSR;
	1674	+	23 is considered a valid original document when reproduced in paper form
	1675	+	24 by the department.
	1676	+	25 SECTION 13. IC 24-4.5-3-505, AS AMENDED BY P.L.69-2018,
	1677	+	26 SECTION 22, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
	1678	+	27 JULY 1, 2023]: Sec. 505. (1) Every creditor required to be licensed
	1679	+	28 under this article shall maintain records in conformity with United
	1680	+	29 States generally accepted accounting principles and practices, or in any
	1681	+	30 other form that may be preapproved at the discretion of the director, in
	1682	+	31 a manner that will enable the department to determine whether the
	1683	+	32 licensee is complying with the provisions of this article. The record
	1684	+	33 keeping system of a licensee shall be sufficient if the licensee makes
	1685	+	34 the required information reasonably available. The department shall
	1686	+	35 determine the sufficiency of the records and whether the licensee has
	1687	+	36 made the required information reasonably available. The department
	1688	+	37 shall be given free access to the records wherever located. The records
	1689	+	38 pertaining to any loan shall be retained for two (2) years after making
	1690	+	39 the final entry relating to the loan, but in the case of a revolving loan
	1691	+	40 account the two (2) years is measured from the date of each entry. A
	1692	+	41 person licensed or required to be licensed under this chapter is subject
	1693	+	42 to IC 28-1-2-30.5 with respect to any records maintained by the person.
	1694	+	ES 452—LS 7232/DI 101 39
	1695	+	1 A person that is exempt (either under this article or under
	1696	+	2 IC 24-4.4-1-202(b)(6)(a)) IC 24-4.4-1-202(b)(8)) from licensing and
	1697	+	3 that sponsors one (1) or more licensed mortgage loan originators as
	1698	+	4 independent agents under an exclusive written agreement, as permitted
	1699	+	5 by IC 24-4.4-1-202(b)(6)(a), IC 24-4.4-1-202(b)(8) or by 750 IAC 9,
	1700	+	6 shall:
	1701	+	7 (a) cooperate with the department; and
	1702	+	8 (b) provide access to records and documents;
	1703	+	9 as required by the department in carrying out examinations of the
	1704	+	10 activities of the licensed mortgage loan originators sponsored by the
	1705	+	11 federal savings bank. person.
	1706	+	12 (2) The unique identifier of any person originating a mortgage
	1707	+	13 transaction must be clearly shown on all mortgage transaction
	1708	+	14 application forms and any other documents as required by the director.
	1709	+	15 (3) Every licensee that engages in mortgage transactions shall use
	1710	+	16 automated examination and regulatory software designated by the
	1711	+	17 director, including third party software. Use of the software consistent
	1712	+	18 with guidance documents and policies issued by the director is not a
	1713	+	19 violation of IC 28-1-2-30.
	1714	+	20 (4) Each:
	1715	+	21 (a) creditor that is licensed by the department to engage in
	1716	+	22 mortgage transactions; and
	1717	+	23 (b) entity person that is exempt (either under this article or under
	1718	+	24 IC 24-4.4-1-202(b)(6)(a)) IC 24-4.4-1-202(b)(8)) from licensing
	1719	+	25 and that:
	1720	+	26 (i) employs one (1) or more licensed mortgage loan
	1721	+	27 originators; or
	1722	+	28 (ii) sponsors under an exclusive written agreement, as
	1723	+	29 permitted by IC 24-4.4-1-202(b)(6)(a), one (1) or more
	1724	+	30 licensed mortgage loan originators as independent agents;
	1725	+	31 permitted by IC 24-4.4-1-202(b)(8) or by 750 IAC 9;
	1726	+	32 shall submit to the NMLSR a call report, which must be in the form
	1727	+	33 and contain information the NMLSR requires.
	1728	+	34 (5) Every creditor required to be licensed under this article shall file
	1729	+	35 with the department a composite report as required by the department,
	1730	+	36 but not more frequently than annually, in the form prescribed by the
	1731	+	37 department relating to all consumer loans made by the licensee. The
	1732	+	38 department shall consult with comparable officials in other states for
	1733	+	39 the purpose of making the kinds of information required in the reports
	1734	+	40 uniform among the states. Information contained in the reports shall be
	1735	+	41 confidential and may be published only in composite form. The
	1736	+	42 department may impose a fee in an amount fixed by the department
	1737	+	ES 452—LS 7232/DI 101 40
	1738	+	1 under IC 28-11-3-5 for each day that a creditor fails to file the report
	1739	+	2 required by this subsection.
	1740	+	3 (6) A creditor required to be licensed under this article shall file
	1741	+	4 notification with the department if the licensee:
	1742	+	5 (a) has a change in name, address, or principals;
	1743	+	6 (b) opens a new branch, closes an existing branch, or relocates an
	1744	+	7 existing branch;
	1745	+	8 (c) files for bankruptcy or reorganization; or
	1746	+	9 (d) is subject to revocation or suspension proceedings by a state
	1747	+	10 or governmental authority with regard to the licensee's activities;
	1748	+	11 not later than thirty (30) days after the date of the event described in
	1749	+	12 this subsection.
	1750	+	13 (7) Every licensee shall file notification with the department if the
	1751	+	14 licensee or any director, executive officer, or manager of the licensee
	1752	+	15 has been convicted of a felony under the laws of Indiana or any other
	1753	+	16 jurisdiction. The licensee shall file the notification required by this
	1754	+	17 subsection not later than thirty (30) days after the date of the event
	1755	+	18 described in this subsection.
	1756	+	19 SECTION 14. IC 28-1-20-1.2 IS ADDED TO THE INDIANA
	1757	+	20 CODE AS A NEW SECTION TO READ AS FOLLOWS
	1758	+	21 [EFFECTIVE JULY 1, 2023]: Sec. 1.2. (a) As used in this section,
	1759	+	22 "depository financial institution" has the meaning set forth in
	1760	+	23 IC 28-1-1-6.
	1761	+	24 (b) A depository financial institution may change, amend, alter,
	1762	+	25 add, or remove any term in a contract or agreement with a
	1763	+	26 depositor at any time, subject to any limitations imposed in the
	1764	+	27 contract or agreement itself.
	1765	+	28 (c) For purposes of contract interpretation in connection with
	1766	+	29 the permissibility under this section of a depository financial
	1767	+	30 institution to change, amend, alter, add, or remove any term in a
	1768	+	31 contract or agreement with a depositor, the words "any term of
	1769	+	32 this agreement", or any similar language, in the contract or
	1770	+	33 agreement shall be liberally interpreted to mean:
	1771	+	34 (1) any part of the contract or agreement that relates to a
	1772	+	35 particular matter;
	1773	+	36 (2) the entire contract or agreement; or
	1774	+	37 (3) any new provision to the contract or agreement;
	1775	+	38 as appropriate.
	1776	+	39 SECTION 15. IC 28-7-1-19, AS AMENDED BY P.L.35-2010,
	1777	+	40 SECTION 160, IS AMENDED TO READ AS FOLLOWS
	1778	+	41 [EFFECTIVE JULY 1, 2023]: Sec. 19. (a) The capital of a credit union
	1779	+	42 shall consist of the payments on shares which have been made to it by
	1780	+	ES 452—LS 7232/DI 101 41
	1781	+	1 members. A credit union may attach a lien on the shares of any member
	1782	+	2 with outstanding obligations to the credit union. A credit union may,
	1783	+	3 upon the resignation of a member, cancel the shares of such member,
	1784	+	4 and apply the withdrawal value of such shares towards the liquidation
	1785	+	5 of the member's obligations. Fully paid up shares of a credit union may
	1786	+	6 be transferred to any qualified member upon such terms as the bylaws
	1787	+	7 provide. If a federal credit union is authorized by the federal regulatory
	1788	+	8 authority with jurisdiction or by federal law to use one (1) or more
	1789	+	9 forms of secondary capital, the department may by rule, order, or
	1790	+	10 declaratory ruling allow a credit union to use one (1) or more forms of
	1791	+	11 secondary capital. The rule, order, or declaratory ruling must include
	1792	+	12 disclosure requirements concerning the conditions for return of the
	1793	+	13 secondary capital and the liquidation priority of the secondary capital.
	1794	+	14 (b) A credit union shall maintain capital consistent with the
	1795	+	15 safety and soundness necessary to support the risk in the credit
	1796	+	16 union's activities, as determined appropriate by the director. The
	1797	+	17 National Credit Union Administration's:
	1798	+	18 (1) prompt corrective action; and
	1799	+	19 (2) risk based net worth;
	1800	+	20 regulations set forth in 12 CFR 702.101, 12 CFR 702.102, 12 CFR
	1801	+	21 702.103, 12 CFR 702.104, and 12 CFR 702.105 apply to all credit
	1802	+	22 unions.
	1803	+	23 SECTION 16. IC 28-7-1-19.1 IS ADDED TO THE INDIANA
	1804	+	24 CODE AS A NEW SECTION TO READ AS FOLLOWS
	1805	+	25 [EFFECTIVE JULY 1, 2023]: Sec. 19.1. (a) Beginning on the
	1806	+	26 effective date of a credit union's classification as adequately
	1807	+	27 capitalized or lower, the credit union must increase the dollar
	1808	+	28 amount of the credit union's net worth on a quarterly basis, either:
	1809	+	29 (1) in the current quarter; or
	1810	+	30 (2) on average over the current quarter and the preceding
	1811	+	31 three (3) quarters;
	1812	+	32 by an amount equal to at least one-tenth of one percent (0.1%) of
	1813	+	33 the credit union's total assets (or by a greater amount at the
	1814	+	34 election of the credit union) until the credit union is classified as
	1815	+	35 well capitalized.
	1816	+	36 (b) Upon written application:
	1817	+	37 (1) made by a credit union described in subsection (a); and
	1818	+	38 (2) received by the director and the credit union's share
	1819	+	39 insurer not later than fourteen (14) days before the end of the
	1820	+	40 applicable quarter;
	1821	+	41 the director and the credit union's share insurer may permit the
	1822	+	42 credit union to increase the dollar amount of the credit union's net
	1823	+	ES 452—LS 7232/DI 101 42
	1824	+	1 worth by an amount that is less than the amount set forth in
	1825	+	2 subsection (a), to the extent the director and the credit union's
	1826	+	3 share insurer determine that the lesser amount is necessary to
	1827	+	4 avoid a significant redemption of the credit union's shares, and
	1828	+	5 would further the purposes of section 19(b) of this chapter.
	1829	+	6 (c) A decision under subsection (b) is subject to quarterly review
	1830	+	7 and revocation unless the credit union is operating under an
	1831	+	8 approved net worth restoration plan that is in accordance with the
	1832	+	9 decision under subsection (b).
	1833	+	10 SECTION 17. IC 28-7-1-19.2 IS ADDED TO THE INDIANA
	1834	+	11 CODE AS A NEW SECTION TO READ AS FOLLOWS
	1835	+	12 [EFFECTIVE JULY 1, 2023]: Sec. 19.2. (a) A credit union that is
	1836	+	13 classified as undercapitalized or lower must do the following:
	1837	+	14 (1) Increase the credit union's net worth in accordance with
	1838	+	15 section 19.1 of this chapter.
	1839	+	16 (2) Submit a net worth restoration plan to the director at the
	1840	+	17 time and in the manner specified by the director. If the credit
	1841	+	18 union:
	1842	+	19 (A) has a net worth ratio of less than five percent (5%);
	1843	+	20 and
	1844	+	21 (B) either:
	1845	+	22 (i) fails to submit a net worth restoration plan required
	1846	+	23 by this subdivision; or
	1847	+	24 (ii) materially fails to implement a net worth restoration
	1848	+	25 plan submitted under this subdivision and approved by
	1849	+	26 the director;
	1850	+	27 the credit union shall be reclassified as significantly
	1851	+	28 undercapitalized as described in 12 CFR 702.102(a)(4)(ii).
	1852	+	29 (3) Beginning on the effective date of the credit union's
	1853	+	30 classification as undercapitalized or lower, not permit the
	1854	+	31 credit union's assets to increase beyond the credit union's
	1855	+	32 assets as of the end of the preceding quarter unless one (1) of
	1856	+	33 the following applies:
	1857	+	34 (A) The director and the credit union's share insurer have
	1858	+	35 approved a net worth restoration plan that provides for an
	1859	+	36 increase in total assets and:
	1860	+	37 (i) the assets of the credit union are increasing consistent
	1861	+	38 with the approved plan; and
	1862	+	39 (ii) the credit union is implementing steps to increase the
	1863	+	40 credit union's net worth ratio consistent with the
	1864	+	41 approved plan.
	1865	+	42 (B) The director and the credit union's share insurer have
	1866	+	ES 452—LS 7232/DI 101 43
	1867	+	1 not approved a net worth restoration plan, but the credit
	1868	+	2 union's total assets are increasing because of increases in
	1869	+	3 the balances (as of the end of the preceding quarter) of one
	1870	+	4 (1) or more of the following:
	1871	+	5 (i) The credit union's total accounts receivable and
	1872	+	6 accrued income on loans and investments.
	1873	+	7 (ii) Total cash and cash equivalents.
	1874	+	8 (iii) Total loans outstanding, as long as the amount of the
	1875	+	9 credit union's total loans outstanding does not exceed the
	1876	+	10 sum of the credit union's total assets plus the balance, as
	1877	+	11 of the end of the preceding quarter, of the credit union's
	1878	+	12 unused commitments to lend and unused lines of credit.
	1879	+	13 A credit union with one (1) or more increased balances
	1880	+	14 under this clause may not offer rates on shares that exceed
	1881	+	15 the prevailing rates on shares in the credit union's relevant
	1882	+	16 market area, and may not establish or acquire any
	1883	+	17 additional branch office.
	1884	+	18 (4) Beginning on the effective date of the credit union's
	1885	+	19 classification as undercapitalized or lower, not increase the
	1886	+	20 total dollar amount of member business loans (including loans
	1887	+	21 outstanding and unused commitments to lend) above the total
	1888	+	22 dollar amount of member business loans (including loans
	1889	+	23 outstanding and unused commitments to lend) as of the end of
	1890	+	24 the preceding quarter, unless the credit union is permitted to
	1891	+	25 do so by the director and the credit union's share insurer.
	1892	+	26 (b) Subject to the applicable procedures for issuing, reviewing,
	1893	+	27 and enforcing directives under this chapter, the director may, by
	1894	+	28 directive, take one (1) or more of the following actions with respect
	1895	+	29 to an undercapitalized credit union having a net worth ratio of less
	1896	+	30 than five percent (5%) (or with respect to a director, officer, or
	1897	+	31 employee of such a credit union) if the director determines that the
	1898	+	32 action is necessary to carry out the purposes of section 19(b) of this
	1899	+	33 chapter:
	1900	+	34 (1) Prohibit the credit union from, directly or indirectly:
	1901	+	35 (A) acquiring any interest in any business entity or
	1902	+	36 financial institution;
	1903	+	37 (B) establishing or acquiring any additional branch office;
	1904	+	38 or
	1905	+	39 (C) engaging in any new line of business;
	1906	+	40 unless the director has approved the credit union's net worth
	1907	+	41 restoration plan, the credit union is implementing the plan,
	1908	+	42 and the director determines that the proposed action is
	1909	+	ES 452—LS 7232/DI 101 44
	1910	+	1 consistent with and will further the objectives of the plan.
	1911	+	2 (2) Restrict the credit union's transactions with a credit union
	1912	+	3 service organization, or require the credit union to reduce or
	1913	+	4 divest the credit union's ownership interest in a credit union
	1914	+	5 service organization.
	1915	+	6 (3) Restrict the dividend rates that the credit union pays on
	1916	+	7 shares to the prevailing rates paid on comparable accounts
	1917	+	8 and maturities in the relevant market area, as determined by
	1918	+	9 the director. However, the director may not retroactively
	1919	+	10 restrict a dividend rate already declared with respect to
	1920	+	11 shares acquired before a restriction is imposed under this
	1921	+	12 subdivision.
	1922	+	13 (4) Prohibit any growth in the credit union's assets, or in a
	1923	+	14 category of assets, or require the credit union to reduce the
	1924	+	15 credit union's assets or a category of the credit union's assets.
	1925	+	16 (5) Require the credit union or the credit union's credit union
	1926	+	17 service organization to alter, reduce, or terminate any activity
	1927	+	18 that poses excessive risk to the credit union, as determined by
	1928	+	19 the director.
	1929	+	20 (6) Prohibit the credit union from accepting all or certain
	1930	+	21 nonmember deposits, as specified by the director.
	1931	+	22 (7) Require the credit union to dismiss from office one (1) or
	1932	+	23 more directors or senior executive officers. A dismissal under
	1933	+	24 this subdivision shall not be construed to be a formal
	1934	+	25 administrative action for removal.
	1935	+	26 (8) Require the credit union to employ qualified senior
	1936	+	27 executive officers, who, if the director and the credit union's
	1937	+	28 share insurer so specify, shall be subject to the approval of the
	1938	+	29 director and the credit union's share insurer.
	1939	+	30 (9) Restrict or require any other action by the credit union, to
	1940	+	31 the extent the director and the credit union's share insurer
	1941	+	32 determine that the restriction or requirement will carry out
	1942	+	33 the purposes of section 19(b) of this chapter better than any
	1943	+	34 of the restrictions or requirements set forth in subdivisions (1)
	1944	+	35 through (8).
	1945	+	36 (c) An undercapitalized credit union that:
	1946	+	37 (1) has a net worth ratio of at least five percent (5%); or
	1947	+	38 (2) is classified as undercapitalized in accordance with 12
	1948	+	39 CFR 702.102(a)(3)(ii) for having a risk based capital ratio of
	1949	+	40 less than eight percent (8%), as calculated under 12 CFR
	1950	+	41 702.104;
	1951	+	42 is subject to the discretionary supervisory actions set forth in
	1952	+	ES 452—LS 7232/DI 101 45
	1953	+	1 subsection (b) if the credit union fails to comply with one (1) or
	1954	+	2 more mandatory supervisory requirements or restrictions set forth
	1955	+	3 in subsection (a), or if the credit union fails to timely implement a
	1956	+	4 net worth restoration plan, as described in 12 CFR 702.111 and
	1957	+	5 approved by the director, including a failure to meet the prescribed
	1958	+	6 steps to increase the credit union's net worth ratio.
	1959	+	7 SECTION 18. IC 28-7-1-19.3 IS ADDED TO THE INDIANA
	1960	+	8 CODE AS A NEW SECTION TO READ AS FOLLOWS
	1961	+	9 [EFFECTIVE JULY 1, 2023]: Sec. 19.3. (a) A credit union that is
	1962	+	10 classified as significantly undercapitalized or lower must do the
	1963	+	11 following:
	1964	+	12 (1) Increase the credit union's net worth in accordance with
	1965	+	13 section 19.1 of this chapter.
	1966	+	14 (2) Submit a net worth restoration plan to the director at the
	1967	+	15 time and in the manner specified by the director.
	1968	+	16 (3) Beginning on the effective date of the credit union's
	1969	+	17 classification as significantly undercapitalized or lower, not
	1970	+	18 permit the credit union's assets to increase beyond the credit
	1971	+	19 union's assets as of the end of the preceding quarter except as
	1972	+	20 permitted under section 19.2(a)(3)(A) or 19.2(a)(3)(B) of this
	1973	+	21 chapter.
	1974	+	22 (4) Beginning on the effective date of the credit union's
	1975	+	23 classification as significantly undercapitalized or lower, not
	1976	+	24 increase the total dollar amount of member business loans
	1977	+	25 (including loans outstanding and unused commitments to
	1978	+	26 lend) above the total dollar amount of member business loans
	1979	+	27 (including loans outstanding and unused commitments to
	1980	+	28 lend) as of the end of the preceding quarter.
	1981	+	29 (b) Subject to the applicable procedures for issuing, reviewing,
	1982	+	30 and enforcing directives under this chapter, the director may, by
	1983	+	31 directive, take one (1) or more of the following actions with respect
	1984	+	32 to a significantly undercapitalized credit union (or with respect to
	1985	+	33 a director, officer, or employee of such a credit union) if the
	1986	+	34 director determines that the action is necessary to carry out the
	1987	+	35 purposes of section 19(b) of this chapter:
	1988	+	36 (1) Prohibit the credit union from, directly or indirectly:
	1989	+	37 (A) acquiring any interest in any business entity or
	1990	+	38 financial institution;
	1991	+	39 (B) establishing or acquiring any additional branch office;
	1992	+	40 or
	1993	+	41 (C) engaging in any new line of business;
	1994	+	42 except as permitted by the director and the credit union's
	1995	+	ES 452—LS 7232/DI 101 46
	1996	+	1 share insurer.
	1997	+	2 (2) Restrict the credit union's transactions with a credit union
	1998	+	3 service organization, or require the credit union to reduce or
	1999	+	4 divest the credit union's ownership interest in a credit union
	2000	+	5 service organization.
	2001	+	6 (3) Restrict the dividend rates that the credit union pays on
	2002	+	7 shares, as determined by the director and the credit union's
	2003	+	8 share insurer.
	2004	+	9 (4) Prohibit any growth in the credit union's assets, or in a
	2005	+	10 category of assets, or require the credit union to reduce the
	2006	+	11 credit union's assets or a category of the credit union's assets.
	2007	+	12 (5) Require the credit union or the credit union's credit union
	2008	+	13 service organization to alter, reduce, or terminate any activity
	2009	+	14 that poses excessive risk to the credit union, as determined by
	2010	+	15 the director.
	2011	+	16 (6) Prohibit the credit union from accepting all or certain
	2012	+	17 nonmember deposits, as specified by the director.
	2013	+	18 (7) Order a new election of the credit union's board of
	2014	+	19 directors.
	2015	+	20 (8) Require the credit union to dismiss from office one (1) or
	2016	+	21 more directors or senior executive officers. A dismissal under
	2017	+	22 this subdivision shall not be construed to be a formal
	2018	+	23 administrative action for removal.
	2019	+	24 (9) Require the credit union to employ qualified senior
	2020	+	25 executive officers, who, if the director and the credit union's
	2021	+	26 share insurer so specify, shall be subject to the approval of the
	2022	+	27 director and the credit union's share insurer.
	2023	+	28 (10) Limit the compensation of one (1) or more senior
	2024	+	29 executive officers of the credit union to that officer's average
	2025	+	30 rate of compensation (excluding bonuses and profit sharing)
	2026	+	31 during the four (4) calendar quarters preceding the effective
	2027	+	32 date of the credit union's classification as significantly
	2028	+	33 undercapitalized or lower, and prohibit the payment of a
	2029	+	34 bonus or profit share to the officer. If the director exercises
	2030	+	35 the discretionary supervisory authority authorized by this
	2031	+	36 subdivision, the director may permit the credit union to
	2032	+	37 compensate a senior executive officer without the limitations
	2033	+	38 described in this subdivision, or with less stringent limitations
	2034	+	39 than those described in this subdivision, with the prior written
	2035	+	40 approval of the director and the credit union's share insurer.
	2036	+	41 (11) Restrict or require any other action by the credit union,
	2037	+	42 to the extent the director and the credit union's share insurer
	2038	+	ES 452—LS 7232/DI 101 47
	2039	+	1 determine that the restriction or requirement will carry out
	2040	+	2 the purposes of section 19(b) of this chapter better than any
	2041	+	3 of the restrictions or requirements set forth in subdivisions (1)
	2042	+	4 through (10).
	2043	+	5 (12) Require the credit union to merge with another financial
	2044	+	6 institution if one (1) or more grounds exist for placing the
	2045	+	7 credit union into conservatorship or into liquidation.
	2046	+	8 (c) Notwithstanding any other mandatory or discretionary
	2047	+	9 supervisory requirements or restrictions set forth in this section,
	2048	+	10 if a credit union is classified as significantly undercapitalized or
	2049	+	11 lower (including by reclassification in accordance with 12 CFR
	2050	+	12 702.102(b)), the director and the credit union's share insurer may
	2051	+	13 place the credit union into conservatorship or into liquidation if the
	2052	+	14 credit union has no reasonable prospect of becoming well
	2053	+	15 capitalized, as determined by the director.
	2054	+	16 SECTION 19. IC 28-7-1-19.4 IS ADDED TO THE INDIANA
	2055	+	17 CODE AS A NEW SECTION TO READ AS FOLLOWS
	2056	+	18 [EFFECTIVE JULY 1, 2023]: Sec. 19.4. (a) A credit union that is
	2057	+	19 classified as critically undercapitalized must do the following:
	2058	+	20 (1) Increase the credit union's net worth in accordance with
	2059	+	21 section 19.1 of this chapter.
	2060	+	22 (2) Submit a net worth restoration plan to the director at the
	2061	+	23 time and in the manner specified by the director.
	2062	+	24 (3) Beginning sixty (60) days after the effective date of the
	2063	+	25 credit union's classification as critically undercapitalized, not
	2064	+	26 pay the principal of or interest on the credit union's
	2065	+	27 subordinated debt (as defined in 12 CFR 702.402). Unpaid
	2066	+	28 interest shall continue to accrue under the terms of the related
	2067	+	29 subordinated debt note (as defined in 12 CFR 702.402), to the
	2068	+	30 extent permitted by law.
	2069	+	31 (4) Not permit the credit union's total assets to increase,
	2070	+	32 except as permitted by the director and the credit union's
	2071	+	33 share insurer.
	2072	+	34 (5) Beginning on the effective date of the credit union's
	2073	+	35 classification as critically undercapitalized, not increase the
	2074	+	36 total dollar amount of member business loans (including loans
	2075	+	37 outstanding and unused commitments to lend) above the total
	2076	+	38 dollar amount of member business loans (including loans
	2077	+	39 outstanding and unused commitments to lend) as of the end of
	2078	+	40 the preceding quarter.
	2079	+	41 (b) Subject to the applicable procedures for issuing, reviewing,
	2080	+	42 and enforcing directives under this chapter, the director may, by
	2081	+	ES 452—LS 7232/DI 101 48
	2082	+	1 directive, take one (1) or more of the following actions with respect
	2083	+	2 to a critically undercapitalized credit union (or with respect to a
	2084	+	3 director, officer, or employee of such a credit union) if the director
	2085	+	4 determines that the action is necessary to carry out the purposes of
	2086	+	5 section 19(b) of this chapter:
	2087	+	6 (1) Prohibit the credit union from, directly or indirectly:
	2088	+	7 (A) acquiring any interest in any business entity or
	2089	+	8 financial institution;
	2090	+	9 (B) establishing or acquiring any additional branch office;
	2091	+	10 or
	2092	+	11 (C) engaging in any new line of business;
	2093	+	12 except as permitted by the director and the credit union's
	2094	+	13 share insurer.
	2095	+	14 (2) Restrict the credit union's transactions with a credit union
	2096	+	15 service organization, or require the credit union to reduce or
	2097	+	16 divest the credit union's ownership interest in a credit union
	2098	+	17 service organization.
	2099	+	18 (3) Restrict the dividend rates that the credit union pays on
	2100	+	19 shares, as determined by the director and the credit union's
	2101	+	20 share insurer.
	2102	+	21 (4) Prohibit any growth in the credit union's assets, or in a
	2103	+	22 category of assets, or require the credit union to reduce the
	2104	+	23 credit union's assets or a category of the credit union's assets.
	2105	+	24 (5) Require the credit union or the credit union's credit union
	2106	+	25 service organization to alter, reduce, or terminate any activity
	2107	+	26 that poses excessive risk to the credit union, as determined by
	2108	+	27 the director.
	2109	+	28 (6) Prohibit the credit union from accepting all or certain
	2110	+	29 nonmember deposits, as specified by the director.
	2111	+	30 (7) Order a new election of the credit union's board of
	2112	+	31 directors.
	2113	+	32 (8) Require the credit union to dismiss from office one (1) or
	2114	+	33 more directors or senior executive officers. A dismissal under
	2115	+	34 this subdivision shall not be construed to be a formal
	2116	+	35 administrative action for removal.
	2117	+	36 (9) Require the credit union to employ qualified senior
	2118	+	37 executive officers, who, if the director and the credit union's
	2119	+	38 share insurer so specify, shall be subject to the approval of the
	2120	+	39 director.
	2121	+	40 (10) Limit the compensation of one (1) or more senior
	2122	+	41 executive officers of the credit union to that officer's average
	2123	+	42 rate of compensation (excluding bonuses and profit sharing)
	2124	+	ES 452—LS 7232/DI 101 49
	2125	+	1 during the four (4) calendar quarters preceding the effective
	2126	+	2 date of the credit union's classification as critically
	2127	+	3 undercapitalized, and prohibit the payment of a bonus or
	2128	+	4 profit share to the officer. If the director exercises the
	2129	+	5 discretionary supervisory authority authorized by this
	2130	+	6 subdivision, the director may permit the credit union to
	2131	+	7 compensate a senior executive officer without the limitations
	2132	+	8 described in this subdivision, or with less stringent limitations
	2133	+	9 than those described in this subdivision, with the prior written
	2134	+	10 approval of the director and the credit union's share insurer.
	2135	+	11 (11) Beginning sixty (60) days after the effective date of the
	2136	+	12 credit union's classification as critically undercapitalized,
	2137	+	13 prohibit payments of principal, dividends, or interest on the
	2138	+	14 credit union's grandfathered secondary capital (as defined in
	2139	+	15 12 CFR 702.402). Unpaid dividends or interest shall continue
	2140	+	16 to accrue under the terms of the account, to the extent
	2141	+	17 permitted by law.
	2142	+	18 (12) Require the credit union to obtain the prior written
	2143	+	19 approval of the director and the credit union's share insurer
	2144	+	20 before the credit union does any of the following:
	2145	+	21 (A) Enter into any material transaction not within the
	2146	+	22 scope of an approved net worth restoration plan or an
	2147	+	23 approved revised business plan, as applicable.
	2148	+	24 (B) Extend credit for transactions determined to be highly
	2149	+	25 leveraged by the director.
	2150	+	26 (C) Amend the credit union's charter or bylaws, except to
	2151	+	27 the extent necessary to comply with any law, regulation, or
	2152	+	28 order.
	2153	+	29 (D) Make any material change in accounting methods.
	2154	+	30 (E) Pay dividends or interest on new share accounts at a
	2155	+	31 rate exceeding the prevailing rates of interest on insured
	2156	+	32 deposits in the credit union's relevant market area.
	2157	+	33 (13) Restrict or require any other action by the credit union,
	2158	+	34 to the extent the director and the credit union's share insurer
	2159	+	35 determine that the restriction or requirement will carry out
	2160	+	36 the purposes of section 19(b) of this chapter better than any
	2161	+	37 of the restrictions or requirements set forth in subdivisions (1)
	2162	+	38 through (12).
	2163	+	39 (14) Require the credit union to merge with another financial
	2164	+	40 institution if one (1) or more grounds exist for placing the
	2165	+	41 credit union into conservatorship or into liquidation.
	2166	+	42 SECTION 20. IC 28-10-1-1, AS AMENDED BY P.L.29-2022,
	2167	+	ES 452—LS 7232/DI 101 50
	2168	+	1 SECTION 13, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
	2169	+	2 JULY 1, 2023]: Sec. 1. A reference to a federal law or federal
	2170	+	3 regulation in this title is a reference to the law or regulation as in effect
	2171	+	4 December 31, 2021. 2022.
	2172	+	5 SECTION 21. [EFFECTIVE JULY 1, 2023] (a) As used in this
	2173	+	6 SECTION, "department" refers to the department of financial
	2174	+	7 institutions established by IC 28-11-1-1.
	2175	+	8 (b) Not later than June 30, 2024, the department shall adopt
	2176	+	9 emergency rules under IC 4-22-2-37.1 to amend 750 IAC 9 to:
	2177	+	10 (1) conform 750 IAC 9 with this act; and
	2178	+	11 (2) establish a rule to authorize a person that is licensed under
	2179	+	12 IC 24-4.4 or IC 24-4.5, or that is exempt from licensing under
	2180	+	13 IC 24-4.4 or IC 24-4.5 (other than a person that has
	2181	+	14 voluntarily registered with the department under
	2182	+	15 IC 24-4.4-1-202(b)(8), as amended by this act), to sponsor one
	2183	+	16 (1) or more mortgage loan originators, who are not employees
	2184	+	17 of the sponsoring person, to perform mortgage loan
	2185	+	18 originator activities if the person does the following:
	2186	+	19 (A) Requires, by written agreement, each sponsored
	2187	+	20 mortgage loan originator to perform mortgage loan
	2188	+	21 originator activities exclusively for the sponsoring person.
	2189	+	22 (B) Assumes responsibility for and reasonably supervises
	2190	+	23 the activities of each licensed mortgage loan originator
	2191	+	24 sponsored by the person.
	2192	+	25 (C) Maintains a bond, in accordance with 750 IAC 9-3-7,
	2193	+	26 that provides coverage for all mortgage loan originators
	2194	+	27 sponsored by the person.
	2195	+	28 (D) Ensures each sponsored mortgage loan originator
	2196	+	29 holds a current, valid insurance producer license under
	2197	+	30 IC 27-1-15.6.
	2198	+	31 (c) In adopting the emergency rules described in subsection (b),
	2199	+	32 the department shall act in accordance with the authority granted
	2200	+	33 to it under IC 24-4.4-1-101 to adopt emergency rules under
	2201	+	34 IC 4-22-2-37.1 in order to provide for a system of licensing
	2202	+	35 creditors and mortgage loan originators that meets the
	2203	+	36 requirements of:
	2204	+	37 (1) the Secure and Fair Enforcement for Mortgage Licensing
	2205	+	38 Act of 2008 (H.R. 3221 Title V) and the interpretations of that
	2206	+	39 Act issued by the Secretary of Housing and Urban
	2207	+	40 Development and the Consumer Financial Protection Bureau;
	2208	+	41 and
	2209	+	42 (2) the subsequent amendment of the Secure and Fair
	2210	+	ES 452—LS 7232/DI 101 51
	2211	+	1 Enforcement for Mortgage Licensing Act of 2008 by the
	2212	+	2 Economic Growth, Regulatory Relief, and Consumer
	2213	+	3 Protection Act (P.L. 115-174, 132 Stat. 1296).
	2214	+	4 (d) This SECTION expires July 1, 2024.
	2215	+	ES 452—LS 7232/DI 101 52
	2216	+	COMMITTEE REPORT
	2217	+	Madam President: The Senate Committee on Insurance and
	2218	+	Financial Institutions, to which was referred Senate Bill No. 452, has
	2219	+	had the same under consideration and begs leave to report the same
	2220	+	back to the Senate with the recommendation that said bill DO PASS.
	2221	+	(Reference is to SB 452 as introduced.)
	2222	+
	2223	+	BALDWIN, Chairperson
	2224	+	Committee Vote: Yeas 8, Nays 0
	2225	+	_____
	2226	+	COMMITTEE REPORT
	2227	+	Mr. Speaker: Your Committee on Financial Institutions, to which
	2228	+	was referred Senate Bill 452, has had the same under consideration and
	2229	+	begs leave to report the same back to the House with the
	2230	+	recommendation that said bill be amended as follows:
	2231	+	Page 40, between lines 18 and 19, begin a new paragraph and insert:
	2232	+	"SECTION 14. IC 28-1-20-1.2 IS ADDED TO THE INDIANA
1710	2233		CODE AS A NEW SECTION TO READ AS FOLLOWS
1711		-	SEA 452 — CC 1 41
1712		-	[EFFECTIVE JULY 1, 2023]: Sec. 19.1. (a) Beginning on the
1713		-	effective date of a credit union's classification as adequately
1714		-	capitalized or lower, the credit union must increase the dollar
1715		-	amount of the credit union's net worth on a quarterly basis, either:
1716		-	(1) in the current quarter; or
1717		-	(2) on average over the current quarter and the preceding
1718		-	three (3) quarters;
1719		-	by an amount equal to at least one-tenth of one percent (0.1%) of
1720		-	the credit union's total assets (or by a greater amount at the
1721		-	election of the credit union) until the credit union is classified as
1722		-	well capitalized.
1723		-	(b) Upon written application:
1724		-	(1) made by a credit union described in subsection (a); and
1725		-	(2) received by the director and the credit union's share
1726		-	insurer not later than fourteen (14) days before the end of the
1727		-	applicable quarter;
1728		-	the director and the credit union's share insurer may permit the
1729		-	credit union to increase the dollar amount of the credit union's net
1730		-	worth by an amount that is less than the amount set forth in
1731		-	subsection (a), to the extent the director and the credit union's
1732		-	share insurer determine that the lesser amount is necessary to
1733		-	avoid a significant redemption of the credit union's shares, and
1734		-	would further the purposes of section 19(b) of this chapter.
1735		-	(c) A decision under subsection (b) is subject to quarterly review
1736		-	and revocation unless the credit union is operating under an
1737		-	approved net worth restoration plan that is in accordance with the
1738		-	decision under subsection (b).
1739		-	SECTION 16. IC 28-7-1-19.2 IS ADDED TO THE INDIANA
1740		-	CODE AS A NEW SECTION TO READ AS FOLLOWS
1741		-	[EFFECTIVE JULY 1, 2023]: Sec. 19.2. (a) A credit union that is
1742		-	classified as undercapitalized or lower must do the following:
1743		-	(1) Increase the credit union's net worth in accordance with
1744		-	section 19.1 of this chapter.
1745		-	(2) Submit a net worth restoration plan to the director at the
1746		-	time and in the manner specified by the director. If the credit
1747		-	union:
1748		-	(A) has a net worth ratio of less than five percent (5%);
1749		-	and
1750		-	(B) either:
1751		-	(i) fails to submit a net worth restoration plan required
1752		-	by this subdivision; or
1753		-	(ii) materially fails to implement a net worth restoration
1754		-	SEA 452 — CC 1 42
1755		-	plan submitted under this subdivision and approved by
1756		-	the director;
1757		-	the credit union shall be reclassified as significantly
1758		-	undercapitalized as described in 12 CFR 702.102(a)(4)(ii).
1759		-	(3) Beginning on the effective date of the credit union's
1760		-	classification as undercapitalized or lower, not permit the
1761		-	credit union's assets to increase beyond the credit union's
1762		-	assets as of the end of the preceding quarter unless one (1) of
1763		-	the following applies:
1764		-	(A) The director and the credit union's share insurer have
1765		-	approved a net worth restoration plan that provides for an
1766		-	increase in total assets and:
1767		-	(i) the assets of the credit union are increasing consistent
1768		-	with the approved plan; and
1769		-	(ii) the credit union is implementing steps to increase the
1770		-	credit union's net worth ratio consistent with the
1771		-	approved plan.
1772		-	(B) The director and the credit union's share insurer have
1773		-	not approved a net worth restoration plan, but the credit
1774		-	union's total assets are increasing because of increases in
1775		-	the balances (as of the end of the preceding quarter) of one
1776		-	(1) or more of the following:
1777		-	(i) The credit union's total accounts receivable and
1778		-	accrued income on loans and investments.
1779		-	(ii) Total cash and cash equivalents.
1780		-	(iii) Total loans outstanding, as long as the amount of the
1781		-	credit union's total loans outstanding does not exceed the
1782		-	sum of the credit union's total assets plus the balance, as
1783		-	of the end of the preceding quarter, of the credit union's
1784		-	unused commitments to lend and unused lines of credit.
1785		-	A credit union with one (1) or more increased balances
1786		-	under this clause may not offer rates on shares that exceed
1787		-	the prevailing rates on shares in the credit union's relevant
1788		-	market area, and may not establish or acquire any
1789		-	additional branch office.
1790		-	(4) Beginning on the effective date of the credit union's
1791		-	classification as undercapitalized or lower, not increase the
1792		-	total dollar amount of member business loans (including loans
1793		-	outstanding and unused commitments to lend) above the total
1794		-	dollar amount of member business loans (including loans
1795		-	outstanding and unused commitments to lend) as of the end of
1796		-	the preceding quarter, unless the credit union is permitted to
1797		-	SEA 452 — CC 1 43
1798		-	do so by the director and the credit union's share insurer.
1799		-	(b) Subject to the applicable procedures for issuing, reviewing,
1800		-	and enforcing directives under this chapter, the director may, by
1801		-	directive, take one (1) or more of the following actions with respect
1802		-	to an undercapitalized credit union having a net worth ratio of less
1803		-	than five percent (5%) (or with respect to a director, officer, or
1804		-	employee of such a credit union) if the director determines that the
1805		-	action is necessary to carry out the purposes of section 19(b) of this
1806		-	chapter:
1807		-	(1) Prohibit the credit union from, directly or indirectly:
1808		-	(A) acquiring any interest in any business entity or
1809		-	financial institution;
1810		-	(B) establishing or acquiring any additional branch office;
1811		-	or
1812		-	(C) engaging in any new line of business;
1813		-	unless the director has approved the credit union's net worth
1814		-	restoration plan, the credit union is implementing the plan,
1815		-	and the director determines that the proposed action is
1816		-	consistent with and will further the objectives of the plan.
1817		-	(2) Restrict the credit union's transactions with a credit union
1818		-	service organization, or require the credit union to reduce or
1819		-	divest the credit union's ownership interest in a credit union
1820		-	service organization.
1821		-	(3) Restrict the dividend rates that the credit union pays on
1822		-	shares to the prevailing rates paid on comparable accounts
1823		-	and maturities in the relevant market area, as determined by
1824		-	the director. However, the director may not retroactively
1825		-	restrict a dividend rate already declared with respect to
1826		-	shares acquired before a restriction is imposed under this
1827		-	subdivision.
1828		-	(4) Prohibit any growth in the credit union's assets, or in a
1829		-	category of assets, or require the credit union to reduce the
1830		-	credit union's assets or a category of the credit union's assets.
1831		-	(5) Require the credit union or the credit union's credit union
1832		-	service organization to alter, reduce, or terminate any activity
1833		-	that poses excessive risk to the credit union, as determined by
1834		-	the director.
1835		-	(6) Prohibit the credit union from accepting all or certain
1836		-	nonmember deposits, as specified by the director.
1837		-	(7) Require the credit union to dismiss from office one (1) or
1838		-	more directors or senior executive officers. A dismissal under
1839		-	this subdivision shall not be construed to be a formal
1840		-	SEA 452 — CC 1 44
1841		-	administrative action for removal.
1842		-	(8) Require the credit union to employ qualified senior
1843		-	executive officers, who, if the director and the credit union's
1844		-	share insurer so specify, shall be subject to the approval of the
1845		-	director and the credit union's share insurer.
1846		-	(9) Restrict or require any other action by the credit union, to
1847		-	the extent the director and the credit union's share insurer
1848		-	determine that the restriction or requirement will carry out
1849		-	the purposes of section 19(b) of this chapter better than any
1850		-	of the restrictions or requirements set forth in subdivisions (1)
1851		-	through (8).
1852		-	(c) An undercapitalized credit union that:
1853		-	(1) has a net worth ratio of at least five percent (5%); or
1854		-	(2) is classified as undercapitalized in accordance with 12
1855		-	CFR 702.102(a)(3)(ii) for having a risk based capital ratio of
1856		-	less than eight percent (8%), as calculated under 12 CFR
1857		-	702.104;
1858		-	is subject to the discretionary supervisory actions set forth in
1859		-	subsection (b) if the credit union fails to comply with one (1) or
1860		-	more mandatory supervisory requirements or restrictions set forth
1861		-	in subsection (a), or if the credit union fails to timely implement a
1862		-	net worth restoration plan, as described in 12 CFR 702.111 and
1863		-	approved by the director, including a failure to meet the prescribed
1864		-	steps to increase the credit union's net worth ratio.
1865		-	SECTION 17. IC 28-7-1-19.3 IS ADDED TO THE INDIANA
1866		-	CODE AS A NEW SECTION TO READ AS FOLLOWS
1867		-	[EFFECTIVE JULY 1, 2023]: Sec. 19.3. (a) A credit union that is
1868		-	classified as significantly undercapitalized or lower must do the
1869		-	following:
1870		-	(1) Increase the credit union's net worth in accordance with
1871		-	section 19.1 of this chapter.
1872		-	(2) Submit a net worth restoration plan to the director at the
1873		-	time and in the manner specified by the director.
1874		-	(3) Beginning on the effective date of the credit union's
1875		-	classification as significantly undercapitalized or lower, not
1876		-	permit the credit union's assets to increase beyond the credit
1877		-	union's assets as of the end of the preceding quarter except as
1878		-	permitted under section 19.2(a)(3)(A) or 19.2(a)(3)(B) of this
1879		-	chapter.
1880		-	(4) Beginning on the effective date of the credit union's
1881		-	classification as significantly undercapitalized or lower, not
1882		-	increase the total dollar amount of member business loans
1883		-	SEA 452 — CC 1 45
1884		-	(including loans outstanding and unused commitments to
1885		-	lend) above the total dollar amount of member business loans
1886		-	(including loans outstanding and unused commitments to
1887		-	lend) as of the end of the preceding quarter.
1888		-	(b) Subject to the applicable procedures for issuing, reviewing,
1889		-	and enforcing directives under this chapter, the director may, by
1890		-	directive, take one (1) or more of the following actions with respect
1891		-	to a significantly undercapitalized credit union (or with respect to
1892		-	a director, officer, or employee of such a credit union) if the
1893		-	director determines that the action is necessary to carry out the
1894		-	purposes of section 19(b) of this chapter:
1895		-	(1) Prohibit the credit union from, directly or indirectly:
1896		-	(A) acquiring any interest in any business entity or
1897		-	financial institution;
1898		-	(B) establishing or acquiring any additional branch office;
1899		-	or
1900		-	(C) engaging in any new line of business;
1901		-	except as permitted by the director and the credit union's
1902		-	share insurer.
1903		-	(2) Restrict the credit union's transactions with a credit union
1904		-	service organization, or require the credit union to reduce or
1905		-	divest the credit union's ownership interest in a credit union
1906		-	service organization.
1907		-	(3) Restrict the dividend rates that the credit union pays on
1908		-	shares, as determined by the director and the credit union's
1909		-	share insurer.
1910		-	(4) Prohibit any growth in the credit union's assets, or in a
1911		-	category of assets, or require the credit union to reduce the
1912		-	credit union's assets or a category of the credit union's assets.
1913		-	(5) Require the credit union or the credit union's credit union
1914		-	service organization to alter, reduce, or terminate any activity
1915		-	that poses excessive risk to the credit union, as determined by
1916		-	the director.
1917		-	(6) Prohibit the credit union from accepting all or certain
1918		-	nonmember deposits, as specified by the director.
1919		-	(7) Order a new election of the credit union's board of
1920		-	directors.
1921		-	(8) Require the credit union to dismiss from office one (1) or
1922		-	more directors or senior executive officers. A dismissal under
1923		-	this subdivision shall not be construed to be a formal
1924		-	administrative action for removal.
1925		-	(9) Require the credit union to employ qualified senior
1926		-	SEA 452 — CC 1 46
1927		-	executive officers, who, if the director and the credit union's
1928		-	share insurer so specify, shall be subject to the approval of the
1929		-	director and the credit union's share insurer.
1930		-	(10) Limit the compensation of one (1) or more senior
1931		-	executive officers of the credit union to that officer's average
1932		-	rate of compensation (excluding bonuses and profit sharing)
1933		-	during the four (4) calendar quarters preceding the effective
1934		-	date of the credit union's classification as significantly
1935		-	undercapitalized or lower, and prohibit the payment of a
1936		-	bonus or profit share to the officer. If the director exercises
1937		-	the discretionary supervisory authority authorized by this
1938		-	subdivision, the director may permit the credit union to
1939		-	compensate a senior executive officer without the limitations
1940		-	described in this subdivision, or with less stringent limitations
1941		-	than those described in this subdivision, with the prior written
1942		-	approval of the director and the credit union's share insurer.
1943		-	(11) Restrict or require any other action by the credit union,
1944		-	to the extent the director and the credit union's share insurer
1945		-	determine that the restriction or requirement will carry out
1946		-	the purposes of section 19(b) of this chapter better than any
1947		-	of the restrictions or requirements set forth in subdivisions (1)
1948		-	through (10).
1949		-	(12) Require the credit union to merge with another financial
1950		-	institution if one (1) or more grounds exist for placing the
1951		-	credit union into conservatorship or into liquidation.
1952		-	(c) Notwithstanding any other mandatory or discretionary
1953		-	supervisory requirements or restrictions set forth in this section,
1954		-	if a credit union is classified as significantly undercapitalized or
1955		-	lower (including by reclassification in accordance with 12 CFR
1956		-	702.102(b)), the director and the credit union's share insurer may
1957		-	place the credit union into conservatorship or into liquidation if the
1958		-	credit union has no reasonable prospect of becoming well
1959		-	capitalized, as determined by the director.
1960		-	SECTION 18. IC 28-7-1-19.4 IS ADDED TO THE INDIANA
1961		-	CODE AS A NEW SECTION TO READ AS FOLLOWS
1962		-	[EFFECTIVE JULY 1, 2023]: Sec. 19.4. (a) A credit union that is
1963		-	classified as critically undercapitalized must do the following:
1964		-	(1) Increase the credit union's net worth in accordance with
1965		-	section 19.1 of this chapter.
1966		-	(2) Submit a net worth restoration plan to the director at the
1967		-	time and in the manner specified by the director.
1968		-	(3) Beginning sixty (60) days after the effective date of the
1969		-	SEA 452 — CC 1 47
1970		-	credit union's classification as critically undercapitalized, not
1971		-	pay the principal of or interest on the credit union's
1972		-	subordinated debt (as defined in 12 CFR 702.402). Unpaid
1973		-	interest shall continue to accrue under the terms of the related
1974		-	subordinated debt note (as defined in 12 CFR 702.402), to the
1975		-	extent permitted by law.
1976		-	(4) Not permit the credit union's total assets to increase,
1977		-	except as permitted by the director and the credit union's
1978		-	share insurer.
1979		-	(5) Beginning on the effective date of the credit union's
1980		-	classification as critically undercapitalized, not increase the
1981		-	total dollar amount of member business loans (including loans
1982		-	outstanding and unused commitments to lend) above the total
1983		-	dollar amount of member business loans (including loans
1984		-	outstanding and unused commitments to lend) as of the end of
1985		-	the preceding quarter.
1986		-	(b) Subject to the applicable procedures for issuing, reviewing,
1987		-	and enforcing directives under this chapter, the director may, by
1988		-	directive, take one (1) or more of the following actions with respect
1989		-	to a critically undercapitalized credit union (or with respect to a
1990		-	director, officer, or employee of such a credit union) if the director
1991		-	determines that the action is necessary to carry out the purposes of
1992		-	section 19(b) of this chapter:
1993		-	(1) Prohibit the credit union from, directly or indirectly:
1994		-	(A) acquiring any interest in any business entity or
1995		-	financial institution;
1996		-	(B) establishing or acquiring any additional branch office;
1997		-	or
1998		-	(C) engaging in any new line of business;
1999		-	except as permitted by the director and the credit union's
2000		-	share insurer.
2001		-	(2) Restrict the credit union's transactions with a credit union
2002		-	service organization, or require the credit union to reduce or
2003		-	divest the credit union's ownership interest in a credit union
2004		-	service organization.
2005		-	(3) Restrict the dividend rates that the credit union pays on
2006		-	shares, as determined by the director and the credit union's
2007		-	share insurer.
2008		-	(4) Prohibit any growth in the credit union's assets, or in a
2009		-	category of assets, or require the credit union to reduce the
2010		-	credit union's assets or a category of the credit union's assets.
2011		-	(5) Require the credit union or the credit union's credit union
2012		-	SEA 452 — CC 1 48
2013		-	service organization to alter, reduce, or terminate any activity
2014		-	that poses excessive risk to the credit union, as determined by
2015		-	the director.
2016		-	(6) Prohibit the credit union from accepting all or certain
2017		-	nonmember deposits, as specified by the director.
2018		-	(7) Order a new election of the credit union's board of
2019		-	directors.
2020		-	(8) Require the credit union to dismiss from office one (1) or
2021		-	more directors or senior executive officers. A dismissal under
2022		-	this subdivision shall not be construed to be a formal
2023		-	administrative action for removal.
2024		-	(9) Require the credit union to employ qualified senior
2025		-	executive officers, who, if the director and the credit union's
2026		-	share insurer so specify, shall be subject to the approval of the
2027		-	director.
2028		-	(10) Limit the compensation of one (1) or more senior
2029		-	executive officers of the credit union to that officer's average
2030		-	rate of compensation (excluding bonuses and profit sharing)
2031		-	during the four (4) calendar quarters preceding the effective
2032		-	date of the credit union's classification as critically
2033		-	undercapitalized, and prohibit the payment of a bonus or
2034		-	profit share to the officer. If the director exercises the
2035		-	discretionary supervisory authority authorized by this
2036		-	subdivision, the director may permit the credit union to
2037		-	compensate a senior executive officer without the limitations
2038		-	described in this subdivision, or with less stringent limitations
2039		-	than those described in this subdivision, with the prior written
2040		-	approval of the director and the credit union's share insurer.
2041		-	(11) Beginning sixty (60) days after the effective date of the
2042		-	credit union's classification as critically undercapitalized,
2043		-	prohibit payments of principal, dividends, or interest on the
2044		-	credit union's grandfathered secondary capital (as defined in
2045		-	12 CFR 702.402). Unpaid dividends or interest shall continue
2046		-	to accrue under the terms of the account, to the extent
2047		-	permitted by law.
2048		-	(12) Require the credit union to obtain the prior written
2049		-	approval of the director and the credit union's share insurer
2050		-	before the credit union does any of the following:
2051		-	(A) Enter into any material transaction not within the
2052		-	scope of an approved net worth restoration plan or an
2053		-	approved revised business plan, as applicable.
2054		-	(B) Extend credit for transactions determined to be highly
2055		-	SEA 452 — CC 1 49
2056		-	leveraged by the director.
2057		-	(C) Amend the credit union's charter or bylaws, except to
2058		-	the extent necessary to comply with any law, regulation, or
2059		-	order.
2060		-	(D) Make any material change in accounting methods.
2061		-	(E) Pay dividends or interest on new share accounts at a
2062		-	rate exceeding the prevailing rates of interest on insured
2063		-	deposits in the credit union's relevant market area.
2064		-	(13) Restrict or require any other action by the credit union,
2065		-	to the extent the director and the credit union's share insurer
2066		-	determine that the restriction or requirement will carry out
2067		-	the purposes of section 19(b) of this chapter better than any
2068		-	of the restrictions or requirements set forth in subdivisions (1)
2069		-	through (12).
2070		-	(14) Require the credit union to merge with another financial
2071		-	institution if one (1) or more grounds exist for placing the
2072		-	credit union into conservatorship or into liquidation.
2073		-	SECTION 19. IC 28-10-1-1, AS AMENDED BY P.L.29-2022,
2074		-	SECTION 13, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
2075		-	JULY 1, 2023]: Sec. 1. A reference to a federal law or federal
2076		-	regulation in this title is a reference to the law or regulation as in effect
2077		-	December 31, 2021. 2022.
2078		-	SECTION 20. [EFFECTIVE JULY 1, 2023] (a) As used in this
2079		-	SECTION, "department" refers to the department of financial
2080		-	institutions established by IC 28-11-1-1.
2081		-	(b) Not later than June 30, 2024, the department shall adopt
2082		-	emergency rules under IC 4-22-2-37.1 to amend 750 IAC 9 to:
2083		-	(1) conform 750 IAC 9 with this act; and
2084		-	(2) establish a rule to authorize a person that is licensed under
2085		-	IC 24-4.4 or IC 24-4.5, or that is exempt from licensing under
2086		-	IC 24-4.4 or IC 24-4.5 (other than a person that has
2087		-	voluntarily registered with the department under
2088		-	IC 24-4.4-1-202(b)(8), as amended by this act), to sponsor one
2089		-	(1) or more mortgage loan originators, who are not employees
2090		-	of the sponsoring person, to perform mortgage loan
2091		-	originator activities if the person does the following:
2092		-	(A) Requires, by written agreement, each sponsored
2093		-	mortgage loan originator to perform mortgage loan
2094		-	originator activities exclusively for the sponsoring person.
2095		-	(B) Assumes responsibility for and reasonably supervises
2096		-	the activities of each licensed mortgage loan originator
2097		-	sponsored by the person.
2098		-	SEA 452 — CC 1 50
2099		-	(C) Maintains a bond, in accordance with 750 IAC 9-3-7,
2100		-	that provides coverage for all mortgage loan originators
2101		-	sponsored by the person.
2102		-	(D) Ensures each sponsored mortgage loan originator
2103		-	holds a current, valid insurance producer license under
2104		-	IC 27-1-15.6.
2105		-	(c) In adopting the emergency rules described in subsection (b),
2106		-	the department shall act in accordance with the authority granted
2107		-	to it under IC 24-4.4-1-101 to adopt emergency rules under
2108		-	IC 4-22-2-37.1 in order to provide for a system of licensing
2109		-	creditors and mortgage loan originators that meets the
2110		-	requirements of:
2111		-	(1) the Secure and Fair Enforcement for Mortgage Licensing
2112		-	Act of 2008 (H.R. 3221 Title V) and the interpretations of that
2113		-	Act issued by the Secretary of Housing and Urban
2114		-	Development and the Consumer Financial Protection Bureau;
2115		-	and
2116		-	(2) the subsequent amendment of the Secure and Fair
2117		-	Enforcement for Mortgage Licensing Act of 2008 by the
2118		-	Economic Growth, Regulatory Relief, and Consumer
2119		-	Protection Act (P.L. 115-174, 132 Stat. 1296).
2120		-	(d) This SECTION expires July 1, 2024.
2121		-	SEA 452 — CC 1 President of the Senate
2122		-	President Pro Tempore
2123		-	Speaker of the House of Representatives
2124		-	Governor of the State of Indiana
2125		-	Date: Time:
2126		-	SEA 452 — CC 1
	2234	+	[EFFECTIVE JULY 1, 2023]: Sec. 1.2. (a) As used in this section,
	2235	+	"depository financial institution" has the meaning set forth in
	2236	+	IC 28-1-1-6.
	2237	+	(b) A depository financial institution may change, amend, alter,
	2238	+	add, or remove any term in a contract or agreement with a
	2239	+	depositor at any time, subject to any limitations imposed in the
	2240	+	contract or agreement itself.
	2241	+	(c) For purposes of contract interpretation in connection with
	2242	+	the permissibility under this section of a depository financial
	2243	+	institution to change, amend, alter, add, or remove any term in a
	2244	+	contract or agreement with a depositor, the words "any term of
	2245	+	this agreement", or any similar language, in the contract or
	2246	+	agreement shall be liberally interpreted to mean:
	2247	+	(1) any part of the contract or agreement that relates to a
	2248	+	particular matter;
	2249	+	(2) the entire contract or agreement; or
	2250	+	(3) any new provision to the contract or agreement;
	2251	+	as appropriate.".
	2252	+	Page 49, line 1, delete "Enters" and insert "Enter".
	2253	+	Renumber all SECTIONS consecutively.
	2254	+	ES 452—LS 7232/DI 101 53
	2255	+	and when so amended that said bill do pass.
	2256	+	(Reference is to SB 452 as printed February 3, 2023.)
	2257	+	SPEEDY
	2258	+	Committee Vote: yeas 12, nays 0.
	2259	+	ES 452—LS 7232/DI 101