*SB0464.1*
January 24, 2025
SENATE BILL No. 464
_____
DIGEST OF SB 464 (Updated January 22, 2025 9:55 am - DI 140)
Citations Affected: IC 24-4.4; IC 24-4.5; IC 28-7; IC 28-10.
Synopsis: Financial institutions and consumer credit. Provides that a
reference to federal law in: (1) the First Lien Mortgage Lending Act;
(2) the Uniform Consumer Credit Code (UCCC); or (3) the Indiana
Code title governing financial institutions; is a reference to the law as
in effect December 31, 2024 (rather than December 31, 2023, under
current law). Amends the definition of "principal" for purposes of the
UCCC provisions governing consumer loans to specify that the term
does not include any loan proceeds held as security for the loan. Makes
a technical change to the Indiana Code provision governing the
prepayment of consumer loans to incorporate a cross reference to the
Indiana Code provision setting forth the authorized nonrefundable
prepaid finance charge for supervised loans. (Current law references
only the authorized nonrefundable prepaid finance charge for consumer
loans other than supervised loans.) Amends the Indiana Code provision
governing audit requirements for credit unions to provide that
department of financial institutions may establish by policy or rule
accounting and auditing standards necessary to define the audit
requirements.
Effective: July 1, 2025.
Bassler, Baldwin, Gaskill
January 13, 2025, read first time and referred to Committee on Insurance and Financial
Institutions.
January 23, 2025, reported favorably — Do Pass.
SB 464—LS 6738/DI 101 January 24, 2025
First Regular Session of the 124th General Assembly (2025)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in this style type. Also, the
word NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
between statutes enacted by the 2024 Regular Session of the General Assembly.
SENATE BILL No. 464
A BILL FOR AN ACT to amend the Indiana Code concerning
financial institutions.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 24-4.4-1-102, AS AMENDED BY P.L.30-2024,
2 SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3 JULY 1, 2025]: Sec. 102. (1) This article shall be liberally construed
4 and applied to promote its underlying purposes and policies.
5 (2) The underlying purposes and policies of this article are:
6 (a) to permit and encourage the development of fair and
7 economically sound first lien mortgage lending practices; and
8 (b) to conform the regulation of first lien mortgage lending
9 practices to applicable state and federal laws, rules, regulations,
10 policies, and guidance.
11 (3) A reference to a requirement imposed by this article includes
12 reference to a related rule of the department adopted under this article.
13 (4) A reference to a federal law in this article is a reference to the
14 law as in effect December 31, 2023. 2024.
15 SECTION 2. IC 24-4.5-1-102, AS AMENDED BY P.L.30-2024,
16 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
17 JULY 1, 2025]: Sec. 102. (1) This article shall be liberally construed
SB 464—LS 6738/DI 101 2
1 and applied to promote its underlying purposes and policies.
2 (2) The underlying purposes and policies of this article are:
3 (a) to simplify, clarify, and modernize the law governing retail
4 installment sales, consumer credit, small loans, and usury;
5 (b) to provide rate ceilings to assure an adequate supply of credit
6 to consumers;
7 (c) to further consumer understanding of the terms of credit
8 transactions and to foster competition among suppliers of
9 consumer credit so that consumers may obtain credit at
10 reasonable cost;
11 (d) to protect consumer buyers, lessees, and borrowers against
12 unfair practices by some suppliers of consumer credit, having due
13 regard for the interests of legitimate and scrupulous creditors;
14 (e) to permit and encourage the development of fair and
15 economically sound consumer credit practices;
16 (f) to conform the regulation of consumer credit transactions to
17 the policies of the Consumer Credit Protection Act (15 U.S.C.
18 1601 et seq.) and to applicable state and federal laws, rules,
19 regulations, policies, and guidance; and
20 (g) to make uniform the law, including administrative rules,
21 among the various jurisdictions.
22 (3) A reference to a requirement imposed by this article includes
23 reference to a related rule or guidance of the department adopted
24 pursuant to this article.
25 (4) A reference to a federal law in this article is a reference to the
26 law as in effect December 31, 2023. 2024.
27 (5) This article applies to a transaction if the director determines
28 that the transaction:
29 (a) is in substance a disguised consumer credit transaction; or
30 (b) involves the application of subterfuge for the purpose of
31 avoiding this article.
32 A determination by the director under this subsection must be in
33 writing and shall be delivered to all parties to the transaction.
34 IC 4-21.5-3 applies to a determination made under this subsection.
35 (6) The authority of this article remains in effect, whether a licensee,
36 an individual, or a person subject to this article acts or claims to act
37 under any licensing or registration law of this state, or claims to act
38 without such authority.
39 (7) A violation of a state or federal law, regulation, or rule
40 applicable to consumer credit transactions is a violation of this article.
41 (8) The department may enforce penalty provisions set forth in 15
42 U.S.C. 1640 for violations of disclosure requirements applicable to
SB 464—LS 6738/DI 101 3
1 mortgage transactions.
2 SECTION 3. IC 24-4.5-3-107, AS AMENDED BY P.L.145-2008,
3 SECTION 25, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
4 JULY 1, 2025]: Sec. 107. Definitions: "Lender"; "Precomputed";
5 "Principal" ) (1) Except as otherwise provided, "lender" means a
6 person regularly engaged in making consumer loans. The term includes
7 an assignee of the lender's right to payment but use of the term does not
8 in itself impose on an assignee any obligation of the lender with respect
9 to events occurring before the assignment.
10 (2) A loan, refinancing, or consolidation is "precomputed" if the
11 debt is expressed as a sum comprising the principal and the amount of
12 the loan finance charge computed in advance.
13 (3) "Principal" of a loan means the total of:
14 (a) the net amount paid to, receivable by, or paid or payable for
15 the account of the debtor;
16 (b) the amount of any discount excluded from the loan finance
17 charge (subsection (2) of IC 24-4.5-3-109); and
18 (c) to the extent that payment is deferred:
19 (i) amounts actually paid or to be paid by the lender for
20 registration, certificate of title, or license fees if not included
21 in (a); and
22 (ii) additional charges permitted by this chapter (IC
23 24-4.5-3-202).
24 The term does not include any loan proceeds held as security for
25 the loan.
26 SECTION 4. IC 24-4.5-3-209, AS AMENDED BY P.L.85-2020,
27 SECTION 14, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
28 JULY 1, 2025]: Sec. 209. Right to Prepay - (1) Subject to the
29 provisions on rebate upon prepayment (section 210 of this chapter), the
30 debtor may prepay in full the unpaid balance of a consumer loan,
31 refinancing, or consolidation at any time without penalty. With respect
32 to a consumer loan that is primarily secured by an interest in land, a
33 lender may contract for a penalty for prepayment of the loan in full, not
34 to exceed two percent (2%) of any amount prepaid within sixty (60)
35 days of the date of the prepayment in full, after deducting all refunds
36 and rebates as of the date of the prepayment. However, the penalty may
37 not be imposed:
38 (a) if the loan is refinanced or consolidated with the same
39 creditor;
40 (b) for prepayment by proceeds of any insurance or acceleration
41 after default; or
42 (c) after three (3) years from the contract date.
SB 464—LS 6738/DI 101 4
1 For purposes of this section, the collection of the amount of any
2 conditionally waived closing costs (as allowed under section 202(d) of
3 this chapter) by a creditor, as stipulated in the loan agreement, at the
4 time of prepayment in full does not constitute a prepayment penalty
5 and is not subject to the limitations set forth in this subsection.
6 (2) At the time of prepayment of a consumer loan not subject to the
7 provisions of rebate upon prepayment (section 210 of this chapter), the
8 total finance charge, including the prepaid finance charge but
9 excluding the nonrefundable prepaid finance charge allowed under
10 section 201(9) or section 508(8) of this chapter, as applicable, may
11 not exceed the maximum charge allowed under this chapter for the
12 period the loan was in effect. For the purposes of determining
13 compliance with this subsection, the total finance charge does not
14 include the following:
15 (a) The nonrefundable prepaid finance charge allowed under
16 section 201(9) or section 508(8) of this chapter, as applicable.
17 (b) The debtor paid mortgage broker fee, if any, paid to a person
18 who does not control, is not controlled by, or is not under
19 common control with, the creditor holding the loan at the time a
20 consumer loan is prepaid.
21 (3) The creditor or mortgage servicer shall provide, in writing, an
22 accurate payoff amount for the consumer loan to the debtor within
23 seven (7) business days (excluding legal public holidays, Saturdays,
24 and Sundays) after the creditor or mortgage servicer receives the
25 debtor's written request for the accurate consumer loan payoff amount.
26 A payoff statement provided by a creditor or mortgage servicer under
27 this subsection must show the date the statement was prepared and
28 itemize the unpaid principal balance and each fee, charge, or other sum
29 included within the payoff amount. A creditor or mortgage servicer
30 who fails to provide the accurate consumer loan payoff amount is liable
31 for:
32 (a) one hundred dollars ($100) if an accurate consumer loan
33 payoff amount is not provided by the creditor or mortgage
34 servicer within seven (7) business days (excluding legal public
35 holidays, Saturdays, and Sundays) after the creditor or mortgage
36 servicer receives the debtor's first written request; and
37 (b) the greater of:
38 (i) one hundred dollars ($100); or
39 (ii) the loan finance charge that accrues on the loan from the
40 date the creditor or mortgage servicer receives the first written
41 request until the date on which the accurate consumer loan
42 payoff amount is provided;
SB 464—LS 6738/DI 101 5
1 if an accurate consumer loan payoff amount is not provided by the
2 creditor or mortgage servicer within seven (7) business days
3 (excluding legal public holidays, Saturdays, and Sundays) after
4 the creditor or mortgage servicer receives the debtor's second
5 written request, and the creditor or mortgage servicer failed to
6 comply with subdivision (a).
7 A liability under this subsection is an excess charge under
8 IC 24-4.5-5-202.
9 (4) As used in this subsection, "mortgage transaction" means a
10 consumer loan in which a mortgage or a land contract (or another
11 consensual security interest equivalent to a mortgage or a land contract)
12 that constitutes a lien is created or retained against land upon which
13 there is constructed or intended to be constructed a dwelling that is or
14 will be used by the debtor primarily for personal, family, or household
15 purposes. This subsection applies to a mortgage transaction with
16 respect to which any installment or minimum payment due is
17 delinquent for at least sixty (60) days. The creditor, servicer, or the
18 creditor's agent shall acknowledge a written offer made in connection
19 with a proposed short sale not later than five (5) business days
20 (excluding legal public holidays, Saturdays, and Sundays) after the date
21 of the offer if the offer complies with the requirements for a qualified
22 written request set forth in 12 U.S.C. 2605(e)(1)(B). The creditor,
23 servicer, or creditor's agent is required to acknowledge a written offer
24 made in connection with a proposed short sale from a third party acting
25 on behalf of the debtor only if the debtor has provided written
26 authorization for the creditor, servicer, or creditor's agent to do so. Not
27 later than thirty (30) business days (excluding legal public holidays,
28 Saturdays, and Sundays) after receipt of an offer under this subsection,
29 the creditor, servicer, or creditor's agent shall respond to the offer with
30 an acceptance or a rejection of the offer. The thirty (30) day period
31 described in this subsection may be extended for not more than fifteen
32 (15) business days (excluding legal public holidays, Saturdays, and
33 Sundays) if, before the end of the thirty (30) day period, the creditor,
34 the servicer, or the creditor's agent notifies the debtor of the extension
35 and the reason the extension is needed. Payment accepted by a creditor,
36 servicer, or creditor's agent in connection with a short sale constitutes
37 payment in full satisfaction of the mortgage transaction unless the
38 creditor, servicer, or creditor's agent obtains:
39 (a) the following statement: "The debtor remains liable for any
40 amount still owed under the mortgage transaction."; or
41 (b) a statement substantially similar to the statement set forth in
42 subdivision (a);
SB 464—LS 6738/DI 101 6
1 acknowledged by the initials or signature of the debtor, on or before the
2 date on which the short sale payment is accepted. As used in this
3 subsection, "short sale" means a transaction in which the property that
4 is the subject of a mortgage transaction is sold for an amount that is
5 less than the amount of the debtor's outstanding obligation under the
6 mortgage transaction. A creditor or mortgage servicer that fails to
7 respond to an offer within the time prescribed by this subsection is
8 liable in accordance with 12 U.S.C. 2605(f) in any action brought
9 under that section.
10 (5) This section is not intended to provide the owner of real estate
11 subject to the issuance of process under a judgment or decree of
12 foreclosure any protection or defense against a deficiency judgment for
13 purposes of the borrower protections from liability that must be
14 disclosed under 12 CFR 1026.38(p)(3) on the form required by 12 CFR
15 1026.38 ("Closing Disclosures" form under the Amendments to the
16 2013 Integrated Mortgage Disclosures Rule Under the Real Estate
17 Settlement Procedures Act (Regulation X) and the Truth In Lending
18 Act (Regulation Z) and the 2013 Loan Originator Rule Under the Truth
19 in Lending Act (Regulation Z)).
20 SECTION 5. IC 28-7-1-18, AS AMENDED BY P.L.186-2015,
21 SECTION 37, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
22 JULY 1, 2025]: Sec. 18. (a) The supervisory committee shall cause the
23 share and loan accounts of the members to be verified with the records
24 of the treasurer at least each biennium. A verification under this
25 subsection shall be performed using one (1) of the following methods:
26 (1) A verification of one hundred percent (100%) of the share and
27 loan accounts of all members.
28 (2) A verification of share and loan accounts in accordance with
29 the requirements of the National Credit Union Administration set
30 forth in 12 CFR 715.8.
31 (b) The supervisory committee shall supervise the acts of the board
32 of directors, credit committee, and officers.
33 (c) By a majority vote, the supervisory committee may call a
34 meeting of the shareholders to consider any violation of this chapter,
35 or of the bylaws, or of any practice of the credit union which, in the
36 opinion of the committee is unsafe and unauthorized.
37 (d) The supervisory committee shall fill vacancies in its own
38 number until the next annual meeting of the members.
39 (e) At the close of the audit period, The supervisory committee of
40 each credit union shall one (1) time each calendar year make or
41 cause to be made a thorough audit of the credit union for each audit
42 period and shall make a full report to the directors. The audit report
SB 464—LS 6738/DI 101 7
1 shall be issued not later than one hundred twenty (120) days following
2 the close of the audit period. Tapes, work papers, schedules, and
3 evidence of verification of accounts shall be retained until the next
4 examination by the department. and shall provide a full report of the
5 audit to the credit union's directors. If a credit union has assets of
6 at least five million dollars ($5,000,000), the audit required by this
7 subsection must be performed by an outside certified public
8 accountant. A credit union's board of directors shall submit the
9 audit report and a complete statement of the condition of the credit
10 union to the department. The department may require additional
11 information in connection with an audit performed under this
12 subsection. The department may require at any time an audit to be
13 performed upon any credit union by an outside certified public
14 accountant if the department questions the safety and soundness of
15 the credit union. A summary of the any audit report or statement of
16 condition prepared under this subsection shall be read at the annual
17 meeting of the credit union and shall be filed and preserved with the
18 records of the credit union. The department may establish by policy
19 or rule the accounting and auditing standards necessary to define
20 the audit requirements set forth in this section.
21 (f) A credit union with assets of at least five million dollars
22 ($5,000,000) shall have an annual audit performed by an outside
23 professional accounting firm. The department may require a
24 professional outside audit to be performed upon any credit union if the
25 department questions the safety and soundness of the credit union.
26 (g) (f) Minutes of every meeting of the supervisory committee shall
27 be kept and maintained.
28 SECTION 6. IC 28-10-1-1, AS AMENDED BY P.L.30-2024,
29 SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
30 JULY 1, 2025]: Sec. 1. A reference to a federal law or federal
31 regulation in this title is a reference to the law or regulation as in effect
32 December 31, 2023. 2024.
SB 464—LS 6738/DI 101 8
COMMITTEE REPORT
Mr. President: The Senate Committee on Insurance and Financial
Institutions, to which was referred Senate Bill No. 464, has had the
same under consideration and begs leave to report the same back to the
Senate with the recommendation that said bill DO PASS.
(Reference is to SB 464 as introduced.)
BALDWIN, Chairperson
Committee Vote: Yeas 7, Nays 0
SB 464—LS 6738/DI 101