Indiana 2024 Regular Session

Indiana Senate Bill SB0220 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
	1	+	ES0220.1
	2	+	February 22, 2024
	3	+	ENGROSSED
	4	+	SENATE BILL No. 220
	5	+	_____
	6	+	DIGEST OF SB 220 (Updated February 22, 2024 9:04 am - DI 140)
	7	+	Citations Affected: IC 24-4.4; IC 24-4.5; IC 28-7; IC 28-10.
	8	+	Synopsis: Financial institutions and consumer credit. Provides that a
	9	+	reference to federal law in: (1) the first lien mortgage lending act; (2)
	10	+	the Uniform Consumer Credit Code; or (3) the Indiana Code title
	11	+	governing financial institutions; is a reference to the law as in effect
	12	+	December 31, 2023 (rather than December 31, 2022, under current
	13	+	law). Amends Indiana Code provisions concerning accounting
	14	+	practices for credit unions to reflect a new accounting standard that
	15	+	replaces the allowance for loan and lease losses accounting
	16	+	methodology with the allowance for credit losses methodology, as
	17	+	required by the Financial Accounting Standards Board. Establishes a
	18	+	new chapter in the Indiana Code article containing general provisions
	19	+	with respect to financial institutions to require corporations (defined as
	20	+	certain financial institutions organized or reorganized under Indiana
	21	+	law) to notify the director of the department of financial institutions of
	22	+	a reportable cyber incident or notification incident in accordance with
	23	+	the same procedures required by the corporation's federal supervisory
	24	+	authority or federal insurer.
	25	+	Effective: July 1, 2024.
	26	+	Bassler, Deery, Baldwin
	27	+	(HOUSE SPONSOR — SPEEDY)
	28	+	January 9, 2024, read first time and referred to Committee on Insurance and Financial
	29	+	Institutions.
	30	+	January 18, 2024, amended, reported favorably — Do Pass.
	31	+	January 22, 2024, read second time, ordered engrossed. Engrossed.
	32	+	January 23, 2024, read third time, passed. Yeas 47, nays 1.
	33	+	HOUSE ACTION
	34	+	February 6, 2024, read first time and referred to Committee on Financial Institutions.
	35	+	February 22, 2024, reported — Do Pass.
	36	+	ES 220—LS 6371/DI 101 February 22, 2024
1	37		Second Regular Session of the 123rd General Assembly (2024)
2	38		PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
3	39		Constitution) is being amended, the text of the existing provision will appear in this style type,
4	40		additions will appear in this style type, and deletions will appear in this style type.
5	41		Additions: Whenever a new statutory provision is being enacted (or a new constitutional
6	42		provision adopted), the text of the new provision will appear in this style type. Also, the
7	43		word NEW will appear in that style type in the introductory clause of each SECTION that adds
8	44		a new provision to the Indiana Code or the Indiana Constitution.
9	45		Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
10	46		between statutes enacted by the 2023 Regular Session of the General Assembly.
11		-	SENATE ENROLLED ACT No. 220
12		-	AN ACT to amend the Indiana Code concerning financial
13		-	institutions.
	47	+	ENGROSSED
	48	+	SENATE BILL No. 220
	49	+	A BILL FOR AN ACT to amend the Indiana Code concerning
	50	+	financial institutions.
14	51		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.197-2023,
16		-	SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
17		-	JULY 1, 2024]: 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, 2022. 2023.
29		-	SECTION 2. IC 24-4.5-1-102, AS AMENDED BY P.L.197-2023,
30		-	SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
31		-	JULY 1, 2024]: Sec. 102. (1) This article shall be liberally construed
32		-	and applied to promote its underlying purposes and policies.
33		-	(2) The underlying purposes and policies of this article are:
34		-	(a) to simplify, clarify, and modernize the law governing retail
35		-	installment sales, consumer credit, small loans, and usury;
36		-	SEA 220 2
37		-	(b) to provide rate ceilings to assure an adequate supply of credit
38		-	to consumers;
39		-	(c) to further consumer understanding of the terms of credit
40		-	transactions and to foster competition among suppliers of
41		-	consumer credit so that consumers may obtain credit at
42		-	reasonable cost;
43		-	(d) to protect consumer buyers, lessees, and borrowers against
44		-	unfair practices by some suppliers of consumer credit, having due
45		-	regard for the interests of legitimate and scrupulous creditors;
46		-	(e) to permit and encourage the development of fair and
47		-	economically sound consumer credit practices;
48		-	(f) to conform the regulation of consumer credit transactions to
49		-	the policies of the Consumer Credit Protection Act (15 U.S.C.
50		-	1601 et seq.) and to applicable state and federal laws, rules,
51		-	regulations, policies, and guidance; and
52		-	(g) to make uniform the law, including administrative rules
53		-	among the various jurisdictions.
54		-	(3) A reference to a requirement imposed by this article includes
55		-	reference to a related rule or guidance of the department adopted
56		-	pursuant to this article.
57		-	(4) A reference to a federal law in this article is a reference to the
58		-	law as in effect December 31, 2022. 2023.
59		-	(5) This article applies to a transaction if the director determines
60		-	that the transaction:
61		-	(a) is in substance a disguised consumer credit transaction; or
62		-	(b) involves the application of subterfuge for the purpose of
63		-	avoiding this article.
64		-	A determination by the director under this subsection must be in
65		-	writing and shall be delivered to all parties to the transaction.
66		-	IC 4-21.5-3 applies to a determination made under this subsection.
67		-	(6) The authority of this article remains in effect, whether a licensee,
68		-	an individual, or a person subject to this article acts or claims to act
69		-	under any licensing or registration law of this state, or claims to act
70		-	without such authority.
71		-	(7) A violation of a state or federal law, regulation, or rule
72		-	applicable to consumer credit transactions is a violation of this article.
73		-	(8) The department may enforce penalty provisions set forth in 15
74		-	U.S.C. 1640 for violations of disclosure requirements applicable to
75		-	mortgage transactions.
76		-	SECTION 3. IC 28-7-1-0.5, AS AMENDED BY P.L.129-2020,
77		-	SECTION 11, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
78		-	JULY 1, 2024]: Sec. 0.5. The following definitions apply throughout
79		-	SEA 220 3
80		-	this chapter:
81		-	(1) "Automated teller machine" (ATM) means a piece of
82		-	unmanned electronic or mechanical equipment that performs
83		-	routine financial transactions for authorized individuals.
84		-	(2) "Branch" office" means an office, agency, or other place of
85		-	business at which deposits are received, share drafts are paid, or
86		-	money is lent to members of a credit union. The term does not
87		-	include:
88		-	(A) the principal office of a credit union;
89		-	(B) the principal office of a credit union affiliate;
90		-	(C) a branch office of a credit union affiliate;
91		-	(D) an automated teller machine; or
92		-	(E) a night depository.
93		-	(3) "Credit union" is a cooperative, nonprofit association,
94		-	incorporated under this chapter, for the purposes of educating its
95		-	members in the concepts of thrift and to encourage savings among
96		-	its members. A credit union should provide a source of credit at
97		-	a fair and reasonable rate of interest and provide an opportunity
98		-	for its members to use and control their own money in order to
99		-	improve their economic and social condition.
100		-	(4) "Department" refers to the department of financial institutions.
101		-	(5) "Surplus" means the credit balance of undivided earnings after
102		-	losses. The term does not include statutory reserves.
103		-	(6) "Unimpaired shares" means paid in shares less any losses for
104		-	which no reserve exists and for which there is no charge against
105		-	undivided earnings.
106		-	(7) "Related credit union service organization" means, in
107		-	reference to a credit union, a credit union service organization (as
108		-	defined and formed under Part 712 of the regulations of the
109		-	National Credit Union Administration, 12 CFR 712) in which the
110		-	credit union has invested under section 9(a)(4) of this chapter.
111		-	(8) "Premises" means any office, branch, suboffice, service
112		-	center, parking lot, real estate, or other facility where the credit
113		-	union transacts or will transact business.
114		-	(9) "Furniture, fixtures, and equipment" means office furnishings,
115		-	office machines, computer hardware, computer software,
116		-	automated terminals, and heating and cooling equipment.
117		-	(10) "Fixed assets" means:
118		-	(A) premises; and
119		-	(B) furniture, fixtures, and equipment.
120		-	(11) "Audit period" means a twelve (12) month period designated
121		-	by the board of directors of a credit union.
122		-	SEA 220 4
123		-	(12) "Community" means:
124		-	(A) a second class city;
125		-	(B) a third class city;
126		-	(C) a town;
127		-	(D) a county other than a county containing a consolidated
128		-	city;
129		-	(E) a census tract;
130		-	(F) a township; or
131		-	(G) any other municipal corporation (as defined in
132		-	IC 36-1-2-10).
133		-	(13) "Control of a related interest" refers to a situation in which
134		-	an individual directly or indirectly, or through or in concert with
135		-	one (1) or more other individuals, possesses any of the following:
136		-	(A) The ownership of, control of, or power to vote at least
137		-	twenty-five percent (25%) of any class of voting securities of
138		-	the related interest.
139		-	(B) The control in any manner of the election of a majority of
140		-	the directors of the related interest.
141		-	(C) The power to exercise a controlling influence over the
142		-	management or policies of the related interest. For purposes of
143		-	this clause, an individual is presumed to have control,
144		-	including the power to exercise a controlling influence over
145		-	the management or policies of a related interest, if the
146		-	individual:
147		-	(i) is an executive officer or a director of the related interest
148		-	and directly or indirectly owns, controls, or has the power to
149		-	vote more than ten percent (10%) of any class of voting
150		-	securities of the related interest; or
151		-	(ii) directly or indirectly owns, controls, or has the power to
152		-	vote more than ten percent (10%) of any class of voting
153		-	securities of the related interest and no other person owns,
154		-	controls, or has the power to vote a greater percentage of
155		-	that class of voting securities.
156		-	(14) "Executive officer" includes any of the following officers of
157		-	a credit union:
158		-	(A) The chairman of the board of directors.
159		-	(B) The president.
160		-	(C) A vice president.
161		-	(D) The cashier.
162		-	(E) The secretary.
163		-	(F) The treasurer.
164		-	(15) "Immediate family", for purposes of section 17.2 of this
165		-	SEA 220 5
166		-	chapter, means the spouse of an individual, the individual's minor
167		-	children, and any of the individual's children, including adults,
168		-	residing in the individual's home.
169		-	(16) "Officer" means any individual who is not solely a director
170		-	or committee member and participates or has the authority to
171		-	participate in major policymaking functions of a credit union,
172		-	regardless of whether:
173		-	(A) the individual has an official title;
174		-	(B) the individual's title designates the individual as an
175		-	assistant; or
176		-	(C) the individual is serving without salary or other
177		-	compensation.
178		-	(17) "Related interest", with respect to an individual, means:
179		-	(A) a partnership, a corporation, or another business
180		-	organization that is controlled by the individual; or
181		-	(B) a political campaign committee:
182		-	(i) controlled by the individual; or
183		-	(ii) the funds or services of which benefit the individual.
184		-	(18) Except as provided in section 9(a)(4) of this chapter, "capital
185		-	and surplus" means the sum of:
186		-	(A) undivided profits;
187		-	(B) reserve for contingencies;
188		-	(C) regular reserve; and
189		-	(D) allowance for loan and lease credit losses, minus any
190		-	adjustment for credit loss allowance for available for sale
191		-	(AFS) securities.
192		-	SECTION 4. IC 28-7-1-24, AS AMENDED BY P.L.69-2018,
193		-	SECTION 56, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
194		-	JULY 1, 2024]: Sec. 24. (a) All entrance charges shall, after payment
195		-	of the organization expenses, be known as reserve income, and shall be
196		-	added to the regular reserve of the credit union. At the close of the
197		-	dividend period, there shall be set apart to the regular reserve ten
198		-	percent (10%) of gross income until the regular reserve shall equal
199		-	seven and one-half percent (7 1/2%) of the total of outstanding loans,
200		-	then five percent (5%) of gross income until the regular reserve shall
201		-	equal ten percent (10%) of the total of outstanding loans. Whenever the
202		-	regular reserve falls below ten percent (10%) or seven and one-half
203		-	percent (7 1/2%) of the total of outstanding loans, it shall be
204		-	replenished by regular contributions to maintain the reserve goals of
205		-	seven and one-half percent (7 1/2%) or ten percent (10%). The regular
206		-	reserve shall be held to meet contingencies and shall not be distributed
207		-	to the members except upon dissolution of the credit union.
208		-	SEA 220 6
209		-	(b) A credit union may have an undivided profits account. The
210		-	undivided profits account may be transferred to the regular reserve.
211		-	(c) The department may, by rule, revise the formula prescribed by
212		-	this section. A revised formula must be prudent and must reasonably
213		-	be expected to protect the credit unions.
214		-	(d) Financial statements of credit unions must provide for full and
215		-	fair disclosure of all assets, liabilities, and members' equity, including
216		-	such allowance for loan credit loss accounts necessary to present fairly
217		-	the financial position, and all income and expenses necessary to present
218		-	fairly the results of operation for the period concerned.
219		-	(e) The maintenance of an the allowance for loan credit losses and
220		-	investment or other losses does not exempt a credit union from the
221		-	requirement set forth in subsection (a). The totals of the regular reserve
222		-	and the allowance for loan credit losses account and the allowance for
223		-	investment losses shall be combined for determining the percentage of
224		-	gross income to be transferred to the regular reserve.
225		-	(f) Loan and investment losses of a credit union must be charged
226		-	against the corresponding loan or investment category of the
227		-	allowance for loan loss. credit losses. Adjustments to the allowance for
228		-	loan credit losses shall be made before the distribution of any dividend
229		-	so that the allowance for loan credit loss represents the value of loans
230		-	and investments and anticipated losses resulting from:
231		-	(1) uncollectible loans, investments, notes, and contracts
232		-	receivable, including any uncollectible accrued interest receivable
233		-	thereon;
234		-	(2) assets acquired in liquidation of loans; and
235		-	(3) loans purchased from other credit unions.
236		-	(g) Adjustments to the allowance for loan credit losses must be
237		-	recorded in the expense account "provision for loan losses".
238		-	appropriate allowance for credit loss subcategory corresponding
239		-	to the asset type being reserved against.
240		-	SECTION 5. IC 28-10-1-1, AS AMENDED BY P.L.197-2023,
241		-	SECTION 19, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
242		-	JULY 1, 2024]: Sec. 1. A reference to a federal law or federal
243		-	regulation in this title is a reference to the law or regulation as in effect
244		-	December 31, 2022. 2023.
245		-	SECTION 6. IC 28-10-3 IS ADDED TO THE INDIANA CODE AS
246		-	A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY
247		-	1, 2024]:
248		-	Chapter 3. Reporting of Reportable Cyber Incidents
249		-	Sec. 1. As used in this chapter, "corporation" means any:
250		-	(1) bank;
251		-	SEA 220 7
252		-	(2) trust company;
253		-	(3) corporate fiduciary;
254		-	(4) savings bank;
255		-	(5) savings association;
256		-	(6) industrial loan and investment company that maintains
257		-	federal deposit insurance;
258		-	(7) credit union; or
259		-	(8) bank of discount and deposit;
260		-	organized or reorganized under the laws of this state.
261		-	Sec. 2. Notwithstanding IC 24-4.9 or any other law, a
262		-	corporation shall notify the director of the department of a
263		-	reportable cyber incident or notification incident in accordance
264		-	with the same procedures required by the corporation's federal
265		-	supervisory authority or federal insurer. A corporation without a
266		-	federal supervisory authority or federal insurer shall notify the
267		-	director of the department of the reportable cyber incident in
268		-	accordance with the same procedures set forth in 12 CFR 748.1(c)
269		-	for federally insured credit unions, regardless of whether the
270		-	corporation is a federally insured credit union.
271		-	SEA 220 President of the Senate
272		-	President Pro Tempore
273		-	Speaker of the House of Representatives
274		-	Governor of the State of Indiana
275		-	Date: Time:
276		-	SEA 220
	52	+	1 SECTION 1. IC 24-4.4-1-102, AS AMENDED BY P.L.197-2023,
	53	+	2 SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
	54	+	3 JULY 1, 2024]: Sec. 102. (1) This article shall be liberally construed
	55	+	4 and applied to promote its underlying purposes and policies.
	56	+	5 (2) The underlying purposes and policies of this article are:
	57	+	6 (a) to permit and encourage the development of fair and
	58	+	7 economically sound first lien mortgage lending practices; and
	59	+	8 (b) to conform the regulation of first lien mortgage lending
	60	+	9 practices to applicable state and federal laws, rules, regulations,
	61	+	10 policies, and guidance.
	62	+	11 (3) A reference to a requirement imposed by this article includes
	63	+	12 reference to a related rule of the department adopted under this article.
	64	+	13 (4) A reference to a federal law in this article is a reference to the
	65	+	14 law as in effect December 31, 2022. 2023.
	66	+	15 SECTION 2. IC 24-4.5-1-102, AS AMENDED BY P.L.197-2023,
	67	+	16 SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
	68	+	17 JULY 1, 2024]: Sec. 102. (1) This article shall be liberally construed
	69	+	ES 220—LS 6371/DI 101 2
	70	+	1 and applied to promote its underlying purposes and policies.
	71	+	2 (2) The underlying purposes and policies of this article are:
	72	+	3 (a) to simplify, clarify, and modernize the law governing retail
	73	+	4 installment sales, consumer credit, small loans, and usury;
	74	+	5 (b) to provide rate ceilings to assure an adequate supply of credit
	75	+	6 to consumers;
	76	+	7 (c) to further consumer understanding of the terms of credit
	77	+	8 transactions and to foster competition among suppliers of
	78	+	9 consumer credit so that consumers may obtain credit at
	79	+	10 reasonable cost;
	80	+	11 (d) to protect consumer buyers, lessees, and borrowers against
	81	+	12 unfair practices by some suppliers of consumer credit, having due
	82	+	13 regard for the interests of legitimate and scrupulous creditors;
	83	+	14 (e) to permit and encourage the development of fair and
	84	+	15 economically sound consumer credit practices;
	85	+	16 (f) to conform the regulation of consumer credit transactions to
	86	+	17 the policies of the Consumer Credit Protection Act (15 U.S.C.
	87	+	18 1601 et seq.) and to applicable state and federal laws, rules,
	88	+	19 regulations, policies, and guidance; and
	89	+	20 (g) to make uniform the law, including administrative rules
	90	+	21 among the various jurisdictions.
	91	+	22 (3) A reference to a requirement imposed by this article includes
	92	+	23 reference to a related rule or guidance of the department adopted
	93	+	24 pursuant to this article.
	94	+	25 (4) A reference to a federal law in this article is a reference to the
	95	+	26 law as in effect December 31, 2022. 2023.
	96	+	27 (5) This article applies to a transaction if the director determines
	97	+	28 that the transaction:
	98	+	29 (a) is in substance a disguised consumer credit transaction; or
	99	+	30 (b) involves the application of subterfuge for the purpose of
	100	+	31 avoiding this article.
	101	+	32 A determination by the director under this subsection must be in
	102	+	33 writing and shall be delivered to all parties to the transaction.
	103	+	34 IC 4-21.5-3 applies to a determination made under this subsection.
	104	+	35 (6) The authority of this article remains in effect, whether a licensee,
	105	+	36 an individual, or a person subject to this article acts or claims to act
	106	+	37 under any licensing or registration law of this state, or claims to act
	107	+	38 without such authority.
	108	+	39 (7) A violation of a state or federal law, regulation, or rule
	109	+	40 applicable to consumer credit transactions is a violation of this article.
	110	+	41 (8) The department may enforce penalty provisions set forth in 15
	111	+	42 U.S.C. 1640 for violations of disclosure requirements applicable to
	112	+	ES 220—LS 6371/DI 101 3
	113	+	1 mortgage transactions.
	114	+	2 SECTION 3. IC 28-7-1-0.5, AS AMENDED BY P.L.129-2020,
	115	+	3 SECTION 11, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
	116	+	4 JULY 1, 2024]: Sec. 0.5. The following definitions apply throughout
	117	+	5 this chapter:
	118	+	6 (1) "Automated teller machine" (ATM) means a piece of
	119	+	7 unmanned electronic or mechanical equipment that performs
	120	+	8 routine financial transactions for authorized individuals.
	121	+	9 (2) "Branch" office" means an office, agency, or other place of
	122	+	10 business at which deposits are received, share drafts are paid, or
	123	+	11 money is lent to members of a credit union. The term does not
	124	+	12 include:
	125	+	13 (A) the principal office of a credit union;
	126	+	14 (B) the principal office of a credit union affiliate;
	127	+	15 (C) a branch office of a credit union affiliate;
	128	+	16 (D) an automated teller machine; or
	129	+	17 (E) a night depository.
	130	+	18 (3) "Credit union" is a cooperative, nonprofit association,
	131	+	19 incorporated under this chapter, for the purposes of educating its
	132	+	20 members in the concepts of thrift and to encourage savings among
	133	+	21 its members. A credit union should provide a source of credit at
	134	+	22 a fair and reasonable rate of interest and provide an opportunity
	135	+	23 for its members to use and control their own money in order to
	136	+	24 improve their economic and social condition.
	137	+	25 (4) "Department" refers to the department of financial institutions.
	138	+	26 (5) "Surplus" means the credit balance of undivided earnings after
	139	+	27 losses. The term does not include statutory reserves.
	140	+	28 (6) "Unimpaired shares" means paid in shares less any losses for
	141	+	29 which no reserve exists and for which there is no charge against
	142	+	30 undivided earnings.
	143	+	31 (7) "Related credit union service organization" means, in
	144	+	32 reference to a credit union, a credit union service organization (as
	145	+	33 defined and formed under Part 712 of the regulations of the
	146	+	34 National Credit Union Administration, 12 CFR 712) in which the
	147	+	35 credit union has invested under section 9(a)(4) of this chapter.
	148	+	36 (8) "Premises" means any office, branch, suboffice, service
	149	+	37 center, parking lot, real estate, or other facility where the credit
	150	+	38 union transacts or will transact business.
	151	+	39 (9) "Furniture, fixtures, and equipment" means office furnishings,
	152	+	40 office machines, computer hardware, computer software,
	153	+	41 automated terminals, and heating and cooling equipment.
	154	+	42 (10) "Fixed assets" means:
	155	+	ES 220—LS 6371/DI 101 4
	156	+	1 (A) premises; and
	157	+	2 (B) furniture, fixtures, and equipment.
	158	+	3 (11) "Audit period" means a twelve (12) month period designated
	159	+	4 by the board of directors of a credit union.
	160	+	5 (12) "Community" means:
	161	+	6 (A) a second class city;
	162	+	7 (B) a third class city;
	163	+	8 (C) a town;
	164	+	9 (D) a county other than a county containing a consolidated
	165	+	10 city;
	166	+	11 (E) a census tract;
	167	+	12 (F) a township; or
	168	+	13 (G) any other municipal corporation (as defined in
	169	+	14 IC 36-1-2-10).
	170	+	15 (13) "Control of a related interest" refers to a situation in which
	171	+	16 an individual directly or indirectly, or through or in concert with
	172	+	17 one (1) or more other individuals, possesses any of the following:
	173	+	18 (A) The ownership of, control of, or power to vote at least
	174	+	19 twenty-five percent (25%) of any class of voting securities of
	175	+	20 the related interest.
	176	+	21 (B) The control in any manner of the election of a majority of
	177	+	22 the directors of the related interest.
	178	+	23 (C) The power to exercise a controlling influence over the
	179	+	24 management or policies of the related interest. For purposes of
	180	+	25 this clause, an individual is presumed to have control,
	181	+	26 including the power to exercise a controlling influence over
	182	+	27 the management or policies of a related interest, if the
	183	+	28 individual:
	184	+	29 (i) is an executive officer or a director of the related interest
	185	+	30 and directly or indirectly owns, controls, or has the power to
	186	+	31 vote more than ten percent (10%) of any class of voting
	187	+	32 securities of the related interest; or
	188	+	33 (ii) directly or indirectly owns, controls, or has the power to
	189	+	34 vote more than ten percent (10%) of any class of voting
	190	+	35 securities of the related interest and no other person owns,
	191	+	36 controls, or has the power to vote a greater percentage of
	192	+	37 that class of voting securities.
	193	+	38 (14) "Executive officer" includes any of the following officers of
	194	+	39 a credit union:
	195	+	40 (A) The chairman of the board of directors.
	196	+	41 (B) The president.
	197	+	42 (C) A vice president.
	198	+	ES 220—LS 6371/DI 101 5
	199	+	1 (D) The cashier.
	200	+	2 (E) The secretary.
	201	+	3 (F) The treasurer.
	202	+	4 (15) "Immediate family", for purposes of section 17.2 of this
	203	+	5 chapter, means the spouse of an individual, the individual's minor
	204	+	6 children, and any of the individual's children, including adults,
	205	+	7 residing in the individual's home.
	206	+	8 (16) "Officer" means any individual who is not solely a director
	207	+	9 or committee member and participates or has the authority to
	208	+	10 participate in major policymaking functions of a credit union,
	209	+	11 regardless of whether:
	210	+	12 (A) the individual has an official title;
	211	+	13 (B) the individual's title designates the individual as an
	212	+	14 assistant; or
	213	+	15 (C) the individual is serving without salary or other
	214	+	16 compensation.
	215	+	17 (17) "Related interest", with respect to an individual, means:
	216	+	18 (A) a partnership, a corporation, or another business
	217	+	19 organization that is controlled by the individual; or
	218	+	20 (B) a political campaign committee:
	219	+	21 (i) controlled by the individual; or
	220	+	22 (ii) the funds or services of which benefit the individual.
	221	+	23 (18) Except as provided in section 9(a)(4) of this chapter, "capital
	222	+	24 and surplus" means the sum of:
	223	+	25 (A) undivided profits;
	224	+	26 (B) reserve for contingencies;
	225	+	27 (C) regular reserve; and
	226	+	28 (D) allowance for loan and lease credit losses, minus any
	227	+	29 adjustment for credit loss allowance for available for sale
	228	+	30 (AFS) securities.
	229	+	31 SECTION 4. IC 28-7-1-24, AS AMENDED BY P.L.69-2018,
	230	+	32 SECTION 56, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
	231	+	33 JULY 1, 2024]: Sec. 24. (a) All entrance charges shall, after payment
	232	+	34 of the organization expenses, be known as reserve income, and shall be
	233	+	35 added to the regular reserve of the credit union. At the close of the
	234	+	36 dividend period, there shall be set apart to the regular reserve ten
	235	+	37 percent (10%) of gross income until the regular reserve shall equal
	236	+	38 seven and one-half percent (7 1/2%) of the total of outstanding loans,
	237	+	39 then five percent (5%) of gross income until the regular reserve shall
	238	+	40 equal ten percent (10%) of the total of outstanding loans. Whenever the
	239	+	41 regular reserve falls below ten percent (10%) or seven and one-half
	240	+	42 percent (7 1/2%) of the total of outstanding loans, it shall be
	241	+	ES 220—LS 6371/DI 101 6
	242	+	1 replenished by regular contributions to maintain the reserve goals of
	243	+	2 seven and one-half percent (7 1/2%) or ten percent (10%). The regular
	244	+	3 reserve shall be held to meet contingencies and shall not be distributed
	245	+	4 to the members except upon dissolution of the credit union.
	246	+	5 (b) A credit union may have an undivided profits account. The
	247	+	6 undivided profits account may be transferred to the regular reserve.
	248	+	7 (c) The department may, by rule, revise the formula prescribed by
	249	+	8 this section. A revised formula must be prudent and must reasonably
	250	+	9 be expected to protect the credit unions.
	251	+	10 (d) Financial statements of credit unions must provide for full and
	252	+	11 fair disclosure of all assets, liabilities, and members' equity, including
	253	+	12 such allowance for loan credit loss accounts necessary to present fairly
	254	+	13 the financial position, and all income and expenses necessary to present
	255	+	14 fairly the results of operation for the period concerned.
	256	+	15 (e) The maintenance of an the allowance for loan credit losses and
	257	+	16 investment or other losses does not exempt a credit union from the
	258	+	17 requirement set forth in subsection (a). The totals of the regular reserve
	259	+	18 and the allowance for loan credit losses account and the allowance for
	260	+	19 investment losses shall be combined for determining the percentage of
	261	+	20 gross income to be transferred to the regular reserve.
	262	+	21 (f) Loan and investment losses of a credit union must be charged
	263	+	22 against the corresponding loan or investment category of the
	264	+	23 allowance for loan loss. credit losses. Adjustments to the allowance for
	265	+	24 loan credit losses shall be made before the distribution of any dividend
	266	+	25 so that the allowance for loan credit loss represents the value of loans
	267	+	26 and investments and anticipated losses resulting from:
	268	+	27 (1) uncollectible loans, investments, notes, and contracts
	269	+	28 receivable, including any uncollectible accrued interest receivable
	270	+	29 thereon;
	271	+	30 (2) assets acquired in liquidation of loans; and
	272	+	31 (3) loans purchased from other credit unions.
	273	+	32 (g) Adjustments to the allowance for loan credit losses must be
	274	+	33 recorded in the expense account "provision for loan losses".
	275	+	34 appropriate allowance for credit loss subcategory corresponding
	276	+	35 to the asset type being reserved against.
	277	+	36 SECTION 5. IC 28-10-1-1, AS AMENDED BY P.L.197-2023,
	278	+	37 SECTION 19, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
	279	+	38 JULY 1, 2024]: Sec. 1. A reference to a federal law or federal
	280	+	39 regulation in this title is a reference to the law or regulation as in effect
	281	+	40 December 31, 2022. 2023.
	282	+	41 SECTION 6. IC 28-10-3 IS ADDED TO THE INDIANA CODE AS
	283	+	42 A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY
	284	+	ES 220—LS 6371/DI 101 7
	285	+	1 1, 2024]:
	286	+	2 Chapter 3. Reporting of Reportable Cyber Incidents
	287	+	3 Sec. 1. As used in this chapter, "corporation" means any:
	288	+	4 (1) bank;
	289	+	5 (2) trust company;
	290	+	6 (3) corporate fiduciary;
	291	+	7 (4) savings bank;
	292	+	8 (5) savings association;
	293	+	9 (6) industrial loan and investment company that maintains
	294	+	10 federal deposit insurance;
	295	+	11 (7) credit union; or
	296	+	12 (8) bank of discount and deposit;
	297	+	13 organized or reorganized under the laws of this state.
	298	+	14 Sec. 2. Notwithstanding IC 24-4.9 or any other law, a
	299	+	15 corporation shall notify the director of the department of a
	300	+	16 reportable cyber incident or notification incident in accordance
	301	+	17 with the same procedures required by the corporation's federal
	302	+	18 supervisory authority or federal insurer. A corporation without a
	303	+	19 federal supervisory authority or federal insurer shall notify the
	304	+	20 director of the department of the reportable cyber incident in
	305	+	21 accordance with the same procedures set forth in 12 CFR 748.1(c)
	306	+	22 for federally insured credit unions, regardless of whether the
	307	+	23 corporation is a federally insured credit union.
	308	+	ES 220—LS 6371/DI 101 8
	309	+	COMMITTEE REPORT
	310	+	Madam President: The Senate Committee on Insurance and
	311	+	Financial Institutions, to which was referred Senate Bill No. 220, has
	312	+	had the same under consideration and begs leave to report the same
	313	+	back to the Senate with the recommendation that said bill be
	314	+	AMENDED as follows:
	315	+	Page 7, delete lines 14 through 15.
	316	+	Page 7, line 16, delete "3." and insert "2.".
	317	+	Page 7, line 18, after "incident" insert "or notification incident".
	318	+	and when so amended that said bill do pass.
	319	+	(Reference is to SB 220 as introduced.)
	320	+	BALDWIN, Chairperson
	321	+	Committee Vote: Yeas 9, Nays 0.
	322	+	_____
	323	+	COMMITTEE REPORT
	324	+	Mr. Speaker: Your Committee on Financial Institutions, to which
	325	+	was referred Senate Bill 220, has had the same under consideration and
	326	+	begs leave to report the same back to the House with the
	327	+	recommendation that said bill do pass.
	328	+	(Reference is to SB 220 as printed January 19, 2024.)
	329	+	SPEEDY
	330	+	Committee Vote: Yeas 13, Nays 0
	331	+	ES 220—LS 6371/DI 101