LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 6738 NOTE PREPARED: Mar 25, 2025
BILL NUMBER: SB 464 BILL AMENDED: Mar 20, 2025
SUBJECT: Financial Institutions and Consumer Credit.
FIRST AUTHOR: Sen. Bassler BILL STATUS: As Passed House
FIRST SPONSOR: Rep. Teshka
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
XDEDICATED
FEDERAL
Summary of Legislation: This bill 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).
The bill 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.
This bill amends the definition of "consumer transaction" for purposes of the deceptive consumer sales act
to include conduct that arises from, occurs in connection with, or otherwise involves a transaction between
a supplier and a state or local law enforcement agency within Indiana. It amends the definition of "supplier"
for purposes of the deceptive consumer sales act to include any entity that provides a product or service to
a state or local law enforcement agency. It also provides that a court can only provide relief in a transaction
between a supplier and a law enforcement agency when the action is brought and enforced by the Attorney
General.
The bill 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.)
The bill provides that under certain circumstances, a lender may contract for and receive a nonrefundable
prepaid finance charge of 3% of the loan amount on a loan that is secured by an interest in land and is not
made under a revolving loan account. It provides that under certain circumstances, a lender may contract for
and receive a nonrefundable prepaid finance charge of 3% of the line of credit on a loan that is secured by
an interest in land and is made under a revolving loan account.
The bill 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
SB 464 1 necessary to define the audit requirements.
The bill also provides that: (1) if a joint agreement of merger is approved by the Department of Financial
Institutions, any credit union whose existence will terminate as a result of the merger shall submit the joint
agreement to a vote of its shareholders as directed by the resolution of the board of directors; and (2) a
majority of shareholders voting may approve the joint agreement.
Effective Date: July 1, 2025.
Explanation of State Expenditures: Department of Financial Institutions (DFI): The DFI would see an
increase in workload to amend some internal regulatory processes. The bill’s requirements are within the
agency’s routine administrative functions and should be able to be implemented with no additional
appropriations, assuming near customary agency staffing and resource levels. [The DFI is funded through
its own dedicated fund, the Financial Institutions Fund, which was appropriated $12.5 M in FY 2024 and FY
2025.]
Attorney General: The bill may increase workload for the Attorney General to enforce the expanded
consumer transaction and supplier definition for deceptive acts. The bill’s provisions should be able to be
accomplished within existing resources and staffing.
Explanation of State Revenues: Prepaid Finance Charge: Increasing the nonrefundable prepaid finance
charge to 3% for a loan that is secured by an interest in land and is not made under a revolving loan account
and a line of credit on a loan that is secured by an interest in land and is made under a revolving loan account
may decrease current DFI enforcement actions taken against financial institutions. As a result, revenue to
the General Fund from civil penalties collected from violators may decrease. Current law allows the DFI to
file civil actions against financial institutions who violate provisions of the Uniform Consumer Credit Code.
A maximum civil penalty of $5,000 or $10,000 can be collected per violation, depending on mitigating and
aggravating circumstances. Any decrease in civil penalty revenue is likely to be minimal.
Deceptive Act: Unfair and deceptive acts discovered by the Attorney General carry a maximum $5,000 civil
penalty for each violation, which is deposited in the General Fund. If this bill increases the number of unfair
and deceptive acts discovered in the state, revenue to the General Fund will increase from civil penalties paid
by violators. Actual increases in revenue are unknown but expected to be small.
Court Fee Revenue: If additional civil cases occur and court fees are collected, revenue to the state General
Fund will increase. The total revenue per case would range between $100 and $122. The amount deposited
will vary depending on whether the case is filed in a court of record or a municipal court. The following
linked document describes the fees and distribution of the revenue: Court fees imposed in civil, probate, and
small claims cases.
Explanation of Local Expenditures:
Explanation of Local Revenues: Court Fee Revenue: If additional cases occur, revenue will be collected
by certain local units. If the case is filed in a court of record, the county will receive $32 and qualifying
municipalities will receive a share of $3. If the case is filed in a municipal court, the county receives $20,
and the municipality will receive $37. The following linked document describes the fees and distribution of
the revenue: Court fees imposed in civil, probate, and small claims cases.
SB 464 2 State Agencies Affected: Department of Financial Institutions, Attorney General.
Local Agencies Affected: Trial courts, city and town courts.
Information Sources: Indiana Supreme Court, Indiana Trial Court Fee Manual.
Fiscal Analyst: Nate Bodnar, 317-234-9476.
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