*HB1539.1*

January 27, 2017

HOUSE BILL No. 1539_____

DIGEST OF HB 1539 (Updated January 25, 2017 4:54 pm - DI 101)

Citations Affected: IC 24-4.4; IC 24-4.5; IC 24-7; IC 25-11; IC 28-1;IC 28-7; IC 28-8; IC 28-10; IC 28-11.

Synopsis: Financial institutions and consumer credit. Makes variouschanges to the statutes concerning: (1) first lien mortgage lenders; (2)persons licensed under the Uniform Consumer Credit Code; (3) rentalpurchase agreements; (4) financial institutions; (5) pawnbrokers; (6)money transmitters; and (7) check cashers. Changes references to the"Federal Consumer Credit Protection Act" to references to the"Consumer Credit Protection Act" throughout these statutes. Removesoutdated references to: (1) the Office of Thrift Supervision; and (2) theFederal Reserve Board; throughout the statutes. In the statuteconcerning rental purchase agreements: (1) repeals the definition of"Federal Consumer Credit Protection Act"; and (2) adds a newdefinition for "Consumer Credit Protection Act". In the statutesconcerning: (1) pawnbrokers; (2) money transmitters; and (3) checkcashers; repeals existing provisions concerning the conducting of otherbusiness at locations at which the regulated financial services areperformed. Replaces the repealed provisions with language specifyingthat other business may be conducted at such locations unless alicensee carries on the business for the purpose of evading or violatingthe applicable statute. Makes conforming changes concerning theconducting of other business at locations at which regulated financialservices are performed in the statutes concerning: (1) first lienmortgage transactions; (2) consumer loans; and (3) small loans; toprovide for uniform provisions in the various statutes.

Effective: July 1, 2017.

Burton, Moed

January 18, 2017, read first time and referred to Committee on Financial Institutions.January 26, 2017, amended, reported — Do Pass.

HB 1539—LS 7353/DI 101

January 27, 2017

First Regular Session of the 120th General Assembly (2017)

PRINTING CODE. Amendments: Whenever an existing statute (or a section of the IndianaConstitution) 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 constitutionalprovision adopted), the text of the new provision will appear in this style type. Also, theword NEW will appear in that style type in the introductory clause of each SECTION that addsa 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 conflictsbetween statutes enacted by the 2016 Regular Session of the General Assembly.

HOUSE BILL No. 1539

A BILL FOR AN ACT to amend the Indiana Code concerningfinancial 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.73-2016,2 SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE3 JULY 1, 2017]: Sec. 102. (1) This article shall be liberally construed4 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 and7 economically sound first lien mortgage lending practices; and8 (b) to conform the regulation of first lien mortgage lending9 practices to applicable state and federal laws, rules, regulations,

10 policies, and guidance.11 (3) A reference to a requirement imposed by this article includes12 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 the14 law as in effect December 31, 2015. 2016.15 SECTION 2. IC 24-4.4-1-205 IS ADDED TO THE INDIANA16 CODE AS A NEW SECTION TO READ AS FOLLOWS17 [EFFECTIVE JULY 1, 2017]: Sec. 205. A licensee may carry on

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1 other business at a location where the licensee engages in first lien2 mortgage transactions unless the licensee carries on other business3 for the purpose of evasion or violation of this article.4 SECTION 3. IC 24-4.4-2-202, AS ADDED BY P.L.89-2011,5 SECTION 6, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE6 JULY 1, 2017]: Sec. 202. (1) The creditor shall comply with disclosure7 requirements applicable to first lien mortgage transactions in the8 federal Consumer Credit Protection Act (15 U.S.C. 1601 et seq.).9 (2) For purposes of subsection (1), disclosures are not required if the

10 transaction is exempt from the federal Consumer Credit Protection Act11 (15 U.S.C. 1601 et seq.).12 SECTION 4. IC 24-4.4-2-502, AS AMENDED BY P.L.1-2009,13 SECTION 135, IS AMENDED TO READ AS FOLLOWS14 [EFFECTIVE JULY 1, 2017]: Sec. 502. (1) A violation by a creditor15 in a first lien mortgage transaction of Section 125 of the Federal16 Consumer Credit Protection Act (15 U.S.C. 1635) (concerning a17 debtor's right to rescind a transaction) constitutes a violation of this18 article. A creditor may not accrue interest during the period when a19 first lien mortgage transaction may be rescinded under Section 125 of20 the Federal Consumer Credit Protection Act (15 U.S.C. 1635).21 (2) A creditor must make available for disbursement the proceeds22 of a transaction subject to subsection (1) on the later of:23 (a) the date the creditor is reasonably satisfied that the debtor has24 not rescinded the transaction; or25 (b) the first business day after the expiration of the rescission26 period under subsection (1).27 SECTION 5. IC 24-4.5-1-102, AS AMENDED BY P.L.73-2016,28 SECTION 4, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE29 JULY 1, 2017]: Sec. 102. (1) This article shall be liberally construed30 and applied to promote its underlying purposes and policies.31 (2) The underlying purposes and policies of this article are:32 (a) to simplify, clarify, and modernize the law governing retail33 installment sales, consumer credit, small loans, and usury;34 (b) to provide rate ceilings to assure an adequate supply of credit35 to consumers;36 (c) to further consumer understanding of the terms of credit37 transactions and to foster competition among suppliers of38 consumer credit so that consumers may obtain credit at39 reasonable cost;40 (d) to protect consumer buyers, lessees, and borrowers against41 unfair practices by some suppliers of consumer credit, having due42 regard for the interests of legitimate and scrupulous creditors;

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1 (e) to permit and encourage the development of fair and2 economically sound consumer credit practices;3 (f) to conform the regulation of consumer credit transactions to4 the policies of the Federal Consumer Credit Protection Act (155 U.S.C. 1601 et seq.) and to applicable state and federal laws,6 rules, regulations, policies, and guidance; and7 (g) to make uniform the law, including administrative rules8 among the various jurisdictions.9 (3) A reference to a requirement imposed by this article includes

10 reference to a related rule or guidance of the department adopted11 pursuant to this article.12 (4) A reference to a federal law in this article is a reference to the13 law as in effect December 31, 2015. 2016.14 (5) This article applies to a transaction if the director determines15 that the transaction:16 (a) is in substance a disguised consumer credit transaction; or17 (b) involves the application of subterfuge for the purpose of18 avoiding this article.19 A determination by the director under this subsection must be in20 writing and shall be delivered to all parties to the transaction.21 IC 4-21.5-3 applies to a determination made under this subsection.22 (6) The authority of this article remains in effect, whether a licensee,23 an individual, or a person subject to this article acts or claims to act24 under any licensing or registration law of this state, or claims to act25 without such authority.26 (7) A violation of a state or federal law, regulation, or rule27 applicable to consumer credit transactions is a violation of this article.28 (8) The department may enforce penalty provisions set forth in 1529 U.S.C. 1640 for violations of disclosure requirements applicable to30 mortgage transactions.31 SECTION 6. IC 24-4.5-1-301.5, AS AMENDED BY THE32 TECHNICAL CORRECTIONS BILL OF THE 2017 GENERAL33 ASSEMBLY, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE34 JULY 1, 2017]: Sec. 301.5. In addition to definitions appearing in35 subsequent chapters in this article, the following definitions apply36 throughout this article:37 (1) "Affiliate", with respect to any person subject to this article,38 means a person that, directly or indirectly, through one (1) or more39 intermediaries:40 (a) controls;41 (b) is controlled by; or42 (c) is under common control with;

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1 the person subject to this article.2 (2) "Agreement" means the bargain of the parties in fact as found in3 their language or by implication from other circumstances, including4 course of dealing or usage of trade or course of performance.5 (3) "Agricultural purpose" means a purpose related to the6 production, harvest, exhibition, marketing, transportation, processing,7 or manufacture of agricultural products by a natural person who8 cultivates, plants, propagates, or nurtures the agricultural products.9 "Agricultural products" includes agricultural, horticultural, viticultural,

10 and dairy products, livestock, wildlife, poultry, bees, forest products,11 fish and shellfish, and any and all products raised or produced on farms12 and any processed or manufactured products thereof.13 (4) "Average daily balance" means the sum of each of the daily14 balances in a billing cycle divided by the number of days in the billing15 cycle, and if the billing cycle is a month, the creditor may elect to treat16 the number of days in each billing cycle as thirty (30).17 (5) "Closing costs" with respect to a subordinate lien mortgage18 transaction includes:19 (a) fees or premiums for title examination, title insurance, or20 similar purposes, including surveys;21 (b) fees for preparation of a deed, settlement statement, or other22 documents;23 (c) escrows for future payments of taxes and insurance;24 (d) fees for notarizing deeds and other documents;25 (e) appraisal fees; and26 (f) fees for credit reports.27 (6) "Conspicuous" refers to a term or clause when it is so written28 that a reasonable person against whom it is to operate ought to have29 noticed it.30 (7) "Consumer credit" means credit offered or extended to a31 consumer primarily for a personal, family, or household purpose.32 (8) "Consumer credit sale" is a sale of goods, services, or an interest33 in land in which:34 (a) credit is granted by a person who regularly engages as a seller35 in credit transactions of the same kind;36 (b) the buyer is a person other than an organization;37 (c) the goods, services, or interest in land are purchased primarily38 for a personal, family, or household purpose;39 (d) either the debt is payable in installments or a credit service40 charge is made; and41 (e) with respect to a sale of goods or services, either:42 (i) the amount of credit extended, the written credit limit, or

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1 the initial advance does not exceed fifty-three thousand five2 hundred dollars ($53,500) or another the exempt threshold3 amount, as adjusted in accordance with the annual adjustment4 of the exempt threshold amount, specified in Regulation Z (125 CFR 226.3 or 12 CFR 1026.3(b), as applicable); or6 (ii) the debt is secured by personal property used or expected7 to be used as the principal dwelling of the buyer.8 Unless the sale is made subject to this article by agreement9 (IC 24-4.5-2-601), "consumer credit sale" does not include a sale

10 in which the seller allows the buyer to purchase goods or services11 pursuant to a lender credit card or similar arrangement or, except12 as provided with respect to disclosure (IC 24-4.5-2-301), debtors'13 remedies (IC 24-4.5-5-201), providing payoff amounts14 (IC 24-4.5-2-209), and powers and functions of the department15 (IC 24-4.5-6), a sale of an interest in land which is a first lien16 mortgage transaction.17 (9) "Consumer loan" means a loan made by a person regularly18 engaged in the business of making loans in which:19 (a) the debtor is a person other than an organization;20 (b) the debt is primarily for a personal, family, or household21 purpose;22 (c) either the debt is payable in installments or a loan finance23 charge is made; and24 (d) either:25 (i) the amount of credit extended, the written credit limit, or26 the initial advance does not exceed fifty-three thousand five27 hundred dollars ($53,500) or another the exempt threshold28 amount, as adjusted in accordance with the annual adjustment29 of the exempt threshold amount, specified in Regulation Z (1230 CFR 226.3 or 12 CFR 1026.3(b), as applicable); or31 (ii) the debt is secured by an interest in land or by personal32 property used or expected to be used as the principal dwelling33 of the debtor.34 Except as described in IC 24-4.5-3-105, the term does not include a35 first lien mortgage transaction.36 (10) "Credit" means the right granted by a creditor to a debtor to37 defer payment of debt or to incur debt and defer its payment.38 (11) "Creditor" means a person:39 (a) who regularly engages in the extension of consumer credit that40 is subject to a credit service charge or loan finance charge, as41 applicable, or is payable by written agreement in more than four42 (4) installments (not including a down payment); and

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1 (b) to whom the obligation is initially payable, either on the face2 of the note or contract, or by agreement when there is not a note3 or contract.4 (12) "Depository institution" has the meaning set forth in the5 Federal Deposit Insurance Act (12 U.S.C. 1813(c)) and includes any6 credit union.7 (13) "Director" means the director of the department of financial8 institutions or the director's designee.9 (14) "Dwelling" means a residential structure that contains one (1)

10 to four (4) units, regardless of whether the structure is attached to real11 property. The term includes an individual:12 (a) condominium unit;13 (b) cooperative unit;14 (c) mobile home; or15 (d) trailer;16 that is used as a residence.17 (15) "Earnings" means compensation paid or payable for personal18 services, whether denominated as wages, salary, commission, bonus,19 or otherwise, and includes periodic payments under a pension or20 retirement program.21 (16) "Employee" means an individual who is paid wages or other22 compensation by an employer required under federal income tax law23 to file Form W-2 on behalf of the individual.24 (17) "Federal banking agencies" means the Board of Governors of25 the Federal Reserve System, the Office of the Comptroller of the26 Currency, the Office of Thrift Supervision, the National Credit Union27 Administration, and the Federal Deposit Insurance Corporation.28 (18) "First lien mortgage transaction" means:29 (a) a consumer loan; or30 (b) a consumer credit sale;31 that is or will be used by the debtor primarily for personal, family, or32 household purposes and that is secured by a mortgage or a land33 contract (or another consensual security interest equivalent to a34 mortgage or a land contract) that constitutes a first lien on a dwelling35 or on residential real estate upon which a dwelling is constructed or36 intended to be constructed.37 (19) "Immediate family member" means a spouse, child, sibling,38 parent, grandparent, or grandchild. The term includes stepparents,39 stepchildren, stepsiblings, and adoptive relationships.40 (20) "Individual" means a natural person.41 (21) "Lender credit card or similar arrangement" means an42 arrangement or loan agreement, other than a seller credit card, pursuant

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1 to which a lender gives a debtor the privilege of using a credit card,2 letter of credit, or other credit confirmation or identification in3 transactions out of which debt arises:4 (a) by the lender's honoring a draft or similar order for the5 payment of money drawn or accepted by the debtor;6 (b) by the lender's payment or agreement to pay the debtor's7 obligations; or8 (c) by the lender's purchase from the obligee of the debtor's9 obligations.

10 (22) "Licensee" means a person licensed as a creditor under this11 article.12 (23) "Loan brokerage business" means any activity in which a13 person, in return for any consideration from any source, procures,14 attempts to procure, or assists in procuring, a mortgage transaction15 from a third party or any other person, whether or not the person16 seeking the mortgage transaction actually obtains the mortgage17 transaction.18 (24) "Loan processor or underwriter" means an individual who19 performs clerical or support duties as an employee at the direction of,20 and subject to the supervision and instruction of, a person licensed or21 exempt from licensing under this article. For purposes of this22 subsection, the term "clerical or support duties" may include, after the23 receipt of an application, the following:24 (a) The receipt, collection, distribution, and analysis of25 information common for the processing or underwriting of a26 mortgage transaction.27 (b) The communication with a consumer to obtain the information28 necessary for the processing or underwriting of a loan, to the29 extent that the communication does not include:30 (i) offering or negotiating loan rates or terms; or31 (ii) counseling consumers about mortgage transaction rates or32 terms.33 An individual engaging solely in loan processor or underwriter34 activities shall not represent to the public through advertising or other35 means of communicating or providing information, including the use36 of business cards, stationery, brochures, signs, rate lists, or other37 promotional items, that the individual can or will perform any of the38 activities of a mortgage loan originator.39 (25) "Mortgage loan originator" means an individual who, for40 compensation or gain, or in the expectation of compensation or gain,41 regularly engages in taking a mortgage transaction application or in42 offering or negotiating the terms of a mortgage transaction that either

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1 is made under this article or under IC 24-4.4 or is made by an employee2 of a person licensed or exempt from licensing under this article or3 under IC 24-4.4, while the employee is engaging in the loan brokerage4 business. The term does not include the following:5 (a) An individual engaged solely as a loan processor or6 underwriter as long as the individual works exclusively as an7 employee of a person licensed or exempt from licensing under8 this article.9 (b) Unless the person or entity is compensated by:

10 (i) a creditor;11 (ii) a loan broker;12 (iii) another mortgage loan originator; or13 (iv) any agent of the creditor, loan broker, or other mortgage14 loan originator described in items (i) through (iii);15 a person or entity that only performs real estate brokerage16 activities and is licensed or registered in accordance with17 applicable state law.18 (c) A person solely involved in extensions of credit relating to19 timeshare plans (as defined in 11 U.S.C. 101(53D)).20 (26) "Mortgage servicer" means the last person to whom a21 mortgagor or the mortgagor's successor in interest has been instructed22 by a mortgagee to send payments on a loan secured by a mortgage.23 (27) "Mortgage transaction" means:24 (a) a consumer loan; or25 (b) a consumer credit sale;26 that is or will be used by the debtor primarily for personal, family, or27 household purposes and that is secured by a mortgage or a land28 contract (or another consensual security interest equivalent to a29 mortgage or a land contract) on a dwelling or on residential real estate30 upon which a dwelling is constructed or intended to be constructed.31 (28) "Nationwide Multistate Licensing System and Registry" (or32 "Nationwide Mortgage Licensing System and Registry" or "NMLSR")33 means a mortgage multistate licensing system developed and34 maintained by the Conference of State Bank Supervisors and the35 American Association of Residential Mortgage Regulators owned and36 operated by the State Regulatory Registry, LLC, or by any successor37 or affiliated entity, for the licensing and registration of creditors, and38 mortgage loan originators, and other persons in the mortgage or39 financial services industries. The term includes any other name or40 acronym that may be assigned to the system by the State Regulatory41 Registry, LLC, or by any successor or affiliated entity.42 (29) "Nontraditional mortgage product" means any mortgage

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1 product other than a thirty (30) year fixed rate mortgage.2 (30) "Official fees" means:3 (a) fees and charges prescribed by law which actually are or will4 be paid to public officials for determining the existence of or for5 perfecting, releasing, or satisfying a security interest related to a6 consumer credit sale, consumer lease, or consumer loan; or7 (b) premiums payable for insurance in lieu of perfecting a security8 interest otherwise required by the creditor in connection with the9 sale, lease, or loan, if the premium does not exceed the fees and

10 charges described in paragraph subdivision (a) that would11 otherwise be payable.12 (31) "Organization" means a corporation, a government or13 governmental subdivision, an agency, a trust, an estate, a partnership,14 a limited liability company, a cooperative, an association, a joint15 venture, an unincorporated organization, or any other entity, however16 organized.17 (32) "Payable in installments" means that payment is required or18 permitted by written agreement to be made in more than four (4)19 installments not including a down payment.20 (33) "Person" includes an individual or an organization.21 (34) "Person related to" with respect to an individual means:22 (a) the spouse of the individual;23 (b) a brother, brother-in-law, sister, or sister-in-law of the24 individual;25 (c) an ancestor or lineal descendants of the individual or the26 individual's spouse; and27 (d) any other relative, by blood or marriage, of the individual or28 the individual's spouse who shares the same home with the29 individual.30 (35) "Person related to" with respect to an organization means:31 (a) a person directly or indirectly controlling, controlled by, or32 under common control with the organization;33 (b) a director, an executive officer, or a manager of the34 organization or a person performing similar functions with respect35 to the organization or to a person related to the organization;36 (c) the spouse of a person related to the organization; and37 (d) a relative by blood or marriage of a person related to the38 organization who shares the same home with the person.39 (36) "Presumed" or "presumption" means that the trier of fact must40 find the existence of the fact presumed, unless and until evidence is41 introduced that would support a finding of its nonexistence.42 (37) "Real estate brokerage activity" means any activity that

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1 involves offering or providing real estate brokerage services to the2 public, including the following:3 (a) Acting as a real estate agent or real estate broker for a buyer,4 seller, lessor, or lessee of real property.5 (b) Bringing together parties interested in the sale, purchase,6 lease, rental, or exchange of real property.7 (c) Negotiating, on behalf of any party, any part of a contract8 relating to the sale, purchase, lease, rental, or exchange of real9 property (other than in connection with providing financing with

10 respect to the sale, purchase, lease, rental, or exchange of real11 property).12 (d) Engaging in any activity for which a person is required to be13 registered or licensed as a real estate agent or real estate broker14 under any applicable law.15 (e) Offering to engage in any activity, or act in any capacity,16 described in this subsection.17 (38) "Registered mortgage loan originator" means any individual18 who:19 (a) meets the definition of mortgage loan originator and is an20 employee of:21 (i) a depository institution;22 (ii) a subsidiary that is owned and controlled by a depository23 institution and regulated by a federal banking agency; or24 (iii) an institution regulated by the Farm Credit25 Administration; and26 (b) is registered with, and maintains a unique identifier through,27 the NMLSR.28 (39) "Regularly engaged", with respect to a person who extends29 consumer credit, refers to a person who:30 (a) extended consumer credit:31 (i) more than twenty-five (25) times; or32 (ii) more than five (5) times for a mortgage transaction secured33 by a dwelling;34 in the preceding calendar year; or35 (b) extends or will extend consumer credit:36 (i) more than twenty-five (25) times; or37 (ii) more than five (5) times for a mortgage transaction secured38 by a dwelling;39 in the current calendar year, if the person did not meet the40 numerical standards described in subdivision (a) in the preceding41 calendar year.42 (40) "Residential real estate" means any real property that is located

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1 in Indiana and on which there is located or intended to be constructed2 a dwelling.3 (41) "Seller credit card" means an arrangement that gives to a buyer4 or lessee the privilege of using a credit card, letter of credit, or other5 credit confirmation or identification for the purpose of purchasing or6 leasing goods or services from that person, a person related to that7 person, or from that person and any other person. The term includes a8 card that is issued by a person, that is in the name of the seller, and that9 can be used by the buyer or lessee only for purchases or leases at

10 locations of the named seller.11 (42) "Subordinate lien mortgage transaction" means:12 (a) a consumer loan; or13 (b) a consumer credit sale;14 that is or will be used by the debtor primarily for personal, family, or15 household purposes and that is secured by a mortgage or a land16 contract (or another consensual security interest equivalent to a17 mortgage or a land contract) that constitutes a subordinate lien on a18 dwelling or on residential real estate upon which a dwelling is19 constructed or intended to be constructed.20 (43) "Unique identifier" means a number or other identifier assigned21 by protocols established by the NMLSR.22 (44) "Land contract" means a contract for the sale of real estate in23 which the seller of the real estate retains legal title to the real estate24 until the total contract price is paid by the buyer.25 (45) "Bona fide nonprofit organization" means an organization that26 does the following, as determined by the director under criteria27 established by the director:28 (a) Maintains tax exempt status under Section 501(c)(3) of the29 Internal Revenue Code.30 (b) Promotes affordable housing or provides home ownership31 education or similar services.32 (c) Conducts the organization's activities in a manner that serves33 public or charitable purposes.34 (d) Receives funding and revenue and charges fees in a manner35 that does not encourage the organization or the organization's36 employees to act other than in the best interests of the37 organization's clients.38 (e) Compensates the organization's employees in a manner that39 does not encourage employees to act other than in the best40 interests of the organization's clients.41 (f) Provides to, or identifies for, debtors mortgage transactions42 with terms that are favorable to the debtor (as described in section

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1 202(b)(15) of this chapter) and comparable to mortgage2 transactions and housing assistance provided under government3 housing assistance programs.4 (g) Maintains certification by the United States Department of5 Housing and Urban Development or employs counselors who are6 certified by the Indiana housing and community development7 authority.8 (46) "Civil proceeding advance payment transaction", or "CPAP9 transaction", has the meaning set forth in IC 24-4.5-3-110.

10 (47) "Civil proceeding", with respect to a CPAP transaction, has11 the meaning set forth in IC 24-4.5-3-110.5.12 (48) "Civil proceeding advance payment contract", or "CPAP13 contract", has the meaning set forth in IC 24-4.5-3-110.5.14 (49) "Civil proceeding advance payment provider", or "CPAP15 provider", has the meaning set forth in IC 24-4.5-3-110.5.16 (50) "Consumer claimant", with respect to a CPAP transaction, has17 the meaning set forth in IC 24-4.5-3-110.5.18 (51) "Funded amount", with respect to a CPAP transaction, has the19 meaning set forth in IC 24-4.5-3-110.5.20 SECTION 7. IC 24-4.5-1-302 IS AMENDED TO READ AS21 FOLLOWS [EFFECTIVE JULY 1, 2017]: Sec. 302. Federal Consumer22 Credit Protection Act — In this article, "Federal "Consumer Credit23 Protection Act" means the Consumer Credit Protection Act (Public24 Law 90-321; 82 Stat. 146), (15 U.S.C. 1601 et seq.), as amended, and25 includes both the Truth in Lending Simplification and Reform Act26 amendments (Public Law 96-221, Title VI, 94 Stat. 168) and any27 regulations issued pursuant to under those laws. However, the28 department may otherwise define this term by rule issued in accordance29 with IC 24-4.5-6-107.30 SECTION 8. IC 24-4.5-2-202, AS AMENDED BY P.L.89-2011,31 SECTION 14, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE32 JULY 1, 2017]: Sec. 202. (1) In addition to the credit service charge33 permitted by IC 24-4.5-2-201 through IC 24-4.5-2-210, this chapter,34 a seller may contract for and receive any of the following additional35 charges in connection with a consumer credit sale:36 (a) Official fees and taxes.37 (b) Charges for insurance as described in subsection (2).38 (c) Notwithstanding provisions of the Federal Consumer Credit39 Protection Act (15 U.S.C. 1601 et seq.) concerning disclosure,40 charges for other benefits, including insurance, conferred on the41 buyer, if the benefits are of value to the buyer and if the charges42 are reasonable in relation to the benefits, and are excluded as

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1 permissible additional charges from the credit service charge.2 With respect to any additional charge not specifically provided for3 in this section, to be a permitted charge under this subsection the4 seller must submit a written explanation of the charge to the5 department indicating how the charge would be assessed and the6 value or benefit to the buyer. Supporting documents may be7 required by the department. The department shall determine8 whether the charge would be of benefit to the buyer and is9 reasonable in relation to the benefits.

10 (d) A charge not to exceed twenty-five dollars ($25) for each11 return by a bank or other depository institution of a dishonored12 check, negotiable order of withdrawal, or share draft issued by the13 debtor.14 (e) Annual participation fees assessed in connection with a15 revolving charge account. Annual participation fees must:16 (i) be reasonable in amount;17 (ii) bear a reasonable relationship to the seller's costs to18 maintain and monitor the charge account; and19 (iii) not be assessed for the purpose of circumvention or20 evasion of this article, as determined by the department.21 (2) An additional charge may be made for insurance written in22 connection with the sale, other than insurance protecting the seller23 against the buyer's default or other credit loss:24 (a) with respect to insurance against loss of or damage to25 property, or against liability, if the seller furnishes a clear and26 specific statement in writing to the buyer, setting forth the cost of27 the insurance if obtained from or through the seller and stating28 that the buyer may choose the person, subject to the seller's29 reasonable approval, through whom the insurance is to be30 obtained; and31 (b) with respect to consumer credit insurance providing life,32 accident, unemployment or other loss of income, or health33 coverage, if the insurance coverage is not a factor in the approval34 by the seller of the extension of credit and is clearly disclosed in35 writing to the buyer, and if, in order to obtain the insurance in36 connection with the extension of credit, the buyer gives specific,37 affirmative, written indication of the desire to do so after written38 disclosure of the cost.39 (3) With respect to a subordinate lien mortgage transaction, the40 following closing costs, if the costs are bona fide, reasonable in41 amount, and not for the purpose of circumvention or evasion of this42 article:

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1 (a) fees for title examination, abstract of title, title insurance,2 property surveys, or similar purposes;3 (b) fees for preparing deeds, mortgages, and reconveyance,4 settlement, and similar documents;5 (c) notary and credit report fees;6 (d) amounts required to be paid into escrow or trustee accounts if7 the amounts would not otherwise be included in the credit service8 charge; and9 (e) appraisal fees.

10 SECTION 9. IC 24-4.5-2-301, AS AMENDED BY P.L.35-2010,11 SECTION 45, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE12 JULY 1, 2017]: Sec. 301. (1) For purposes of this section, "consumer13 credit sale" includes the a sale that is a sale of an interest in land14 which and that is a first lien mortgage transaction if the sale is15 otherwise a consumer credit sale (IC 24-4.5-1-301.5(8)).16 (2) The seller shall disclose to the buyer to whom credit is extended17 with respect to a consumer credit sale, and the lessor shall disclose to18 the lessee with respect to a consumer lease, the information required by19 the Federal Consumer Credit Protection Act (15 U.S.C. 1601 et seq.).20 (3) For purposes of subsection (2), disclosures shall not be required21 on a consumer credit sale if the transaction is exempt from the Federal22 Consumer Credit Protection Act (15 U.S.C. 1601 et seq.).23 SECTION 10. IC 24-4.5-3-201, AS AMENDED BY P.L.91-2013,24 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE25 JULY 1, 2017]: Sec. 201. Loan Finance Charge for Consumer Loans26 other than Supervised Loans—(1) Except as provided in subsections27 (6) and (8), with respect to a consumer loan other than a supervised28 loan (as defined in section 501 of this chapter), a lender may contract29 for a loan finance charge, calculated according to the actuarial method,30 not exceeding twenty-five percent (25%) per year on the unpaid31 balances of the principal.32 (2) This section does not limit or restrict the manner of contracting33 for the loan finance charge, whether by way of add-on, discount, or34 otherwise, so long as the rate of the loan finance charge does not35 exceed that permitted by this section. If the loan is precomputed:36 (a) the loan finance charge may be calculated on the assumption37 that all scheduled payments will be made when due; and38 (b) the effect of prepayment is governed by the provisions on39 rebate upon prepayment in section 210 of this chapter.40 (3) For the purposes of this section, the term of a loan commences41 with the date the loan is made. Differences in the lengths of months are42 disregarded, and a day may be counted as one-thirtieth (1/30) of a

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1 month. Subject to classifications and differentiations the lender may2 reasonably establish, a part of a month in excess of fifteen (15) days3 may be treated as a full month if periods of fifteen (15) days or less are4 disregarded and if that procedure is not consistently used to obtain a5 greater yield than would otherwise be permitted. For purposes of6 computing average daily balances, the creditor may elect to treat all7 months as consisting of thirty (30) days.8 (4) With respect to a consumer loan made pursuant to a revolving9 loan account:

10 (a) the loan finance charge shall be deemed not to exceed the11 maximum annual percentage rate if the loan finance charge12 contracted for and received does not exceed a charge in each13 monthly billing cycle which is two and eighty-three thousandths14 percent (2.083%) of an amount not greater than:15 (i) the average daily balance of the debt;16 (ii) the unpaid balance of the debt on the same day of the17 billing cycle; or18 (iii) subject to subsection (5), the median amount within a19 specified range within which the average daily balance or the20 unpaid balance of the debt, on the same day of the billing21 cycle, is included; for the purposes of this subparagraph and22 subparagraph (ii), a variation of not more than four (4) days23 from month to month is "the same day of the billing cycle";24 (b) if the billing cycle is not monthly, the loan finance charge25 shall be deemed not to exceed the maximum annual percentage26 rate if the loan finance charge contracted for and received does27 not exceed a percentage which bears the same relation to28 one-twelfth (1/12) the maximum annual percentage rate as the29 number of days in the billing cycle bears to thirty (30); and30 (c) notwithstanding subsection (1), if there is an unpaid balance31 on the date as of which the loan finance charge is applied, the32 lender may contract for and receive a charge not exceeding fifty33 cents ($0.50) if the billing cycle is monthly or longer, or the pro34 rata part of fifty cents ($0.50) which bears the same relation to35 fifty cents ($0.50) as the number of days in the billing cycle bears36 to thirty (30) if the billing cycle is shorter than monthly, but no37 charge may be made pursuant to this paragraph if the lender has38 made an annual charge for the same period as permitted by the39 provisions on additional charges in section 202(1)(c) of this40 chapter.41 (5) Subject to classifications and differentiations the lender may42 reasonably establish, the lender may make the same loan finance

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1 charge on all amounts financed within a specified range. A loan finance2 charge does not violate subsection (1) if:3 (a) when applied to the median amount within each range, it does4 not exceed the maximum permitted by subsection (1); and5 (b) when applied to the lowest amount within each range, it does6 not produce a rate of loan finance charge exceeding the rate7 calculated according to paragraph (a) by more than eight percent8 (8%) of the rate calculated according to paragraph (a).9 (6) With respect to a consumer loan not made pursuant to a

10 revolving loan account, the lender may contract for and receive a11 minimum loan finance charge of not more than thirty dollars ($30). The12 minimum loan finance charge allowed under this subsection may be13 imposed only if the lender does not assess a loan origination fee14 nonrefundable prepaid finance charge under subsection (8) and:15 (a) the debtor prepays in full a consumer loan, refinancing, or16 consolidation, regardless of whether the loan, refinancing, or17 consolidation is precomputed;18 (b) the loan, refinancing, or consolidation prepaid by the debtor19 is subject to a loan finance charge that:20 (i) is contracted for by the parties; and21 (ii) does not exceed the rate prescribed in subsection (1); and22 (c) the loan finance charge earned at the time of prepayment is23 less than the minimum loan finance charge contracted for under24 this subsection.25 (7) The amount of thirty dollars ($30) in subsection (6) is subject to26 change under the provisions on adjustment of dollar amounts27 (IC 24-4.5-1-106). However, notwithstanding IC 24-4.5-1-106(1), the28 Reference Base Index to be used under this subsection is the Index for29 October 1992.30 (8) Except as provided in subsection (6), in addition to the loan31 finance charge provided for in this section and to any other charges and32 fees permitted by this chapter, a lender may contract for and receive a33 loan origination fee nonrefundable prepaid finance charge of not34 more than the following:35 (a) In the case of a consumer loan that is secured by an interest in36 land and that:37 (i) is not made under a revolving loan account, two percent38 (2%) of the loan amount; or39 (ii) is made under a revolving loan account, two percent (2%)40 of the line of credit.41 (b) In the case of consumer loan that is not secured by an interest42 in land, fifty dollars ($50).

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1 (9) The loan origination fee nonrefundable prepaid finance2 charge provided for in subsection (8) is not subject to refund or rebate.3 (10) Notwithstanding subsections (8) and (9), in the case of a4 consumer loan that is not secured by an interest in land, if a lender5 retains any part of a loan origination fee nonrefundable prepaid6 finance charge charged on a loan that is paid in full by a new loan7 from the same lender, the following apply:8 (a) If the loan is paid in full by the new loan within three (3)9 months after the date of the prior loan, the lender may not charge

10 a loan origination fee nonrefundable prepaid finance charge on11 the new loan, or, in the case of a revolving loan, on the increased12 credit line.13 (b) The lender may not assess more than two (2) loan origination14 fees nonrefundable prepaid finance charges in any twelve (12)15 month period.16 (11) In the case of a consumer loan that is secured by an interest in17 land, this section does not prohibit a lender from contracting for and18 receiving a fee for preparing deeds, mortgages, reconveyances, and19 similar documents under section 202(1)(d)(ii) of this chapter, in20 addition to the loan origination fee nonrefundable prepaid finance21 charge provided for in subsection (8).22 SECTION 11. IC 24-4.5-3-202, AS AMENDED BY P.L.153-2016,23 SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE24 JULY 1, 2017]: Sec. 202. (1) In addition to the loan finance charge25 permitted by IC 24-4.5-3-201 through IC 24-4.5-3-210, this chapter,26 a lender may contract for and receive the following additional charges27 in connection with a consumer loan:28 (a) Official fees and taxes.29 (b) Charges for insurance as described in subsection (2).30 (c) Annual participation fees assessed in connection with a31 revolving loan account. Annual participation fees must:32 (i) be reasonable in amount;33 (ii) bear a reasonable relationship to the lender's costs to34 maintain and monitor the loan account; and35 (iii) not be assessed for the purpose of circumvention or36 evasion of this article, as determined by the department.37 (d) With respect to a debt secured by an interest in land, the38 following closing costs, if they are bona fide, reasonable in39 amount, and not for the purpose of circumvention or evasion of40 this article:41 (i) Fees for title examination, abstract of title, title insurance,42 property surveys, or similar purposes.

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1 (ii) Fees for preparing deeds, mortgages, and reconveyance,2 settlement, and similar documents.3 (iii) Notary and credit report fees.4 (iv) Amounts required to be paid into escrow or trustee5 accounts if the amounts would not otherwise be included in6 the loan finance charge.7 (v) Appraisal fees.8 (e) Notwithstanding provisions of the Federal Consumer Credit9 Protection Act (15 U.S.C. 1601 et seq.) concerning disclosure,

10 charges for other benefits, including insurance, conferred on the11 debtor, if the benefits are of value to the debtor and if the charges12 are reasonable in relation to the benefits, and are excluded as13 permissible additional charges from the loan finance charge. With14 respect to any other additional charge not specifically provided15 for in this section to be a permitted charge under this subsection,16 the creditor must submit a written explanation of the charge to the17 department indicating how the charge would be assessed and the18 value or benefit to the debtor. Supporting documents may be19 required by the department. The department shall determine20 whether the charge would be of benefit to the debtor and is21 reasonable in relation to the benefits.22 (f) A charge not to exceed twenty-five dollars ($25) for each23 return by a bank or other depository institution of a dishonored24 check, negotiable order of withdrawal, or share draft issued by the25 debtor.26 (g) With respect to a revolving loan account, a fee not to exceed27 twenty-five dollars ($25) in each billing cycle during which the28 balance due under the revolving loan account exceeds by more29 than one hundred dollars ($100) the maximum credit limit for the30 account established by the lender.31 (h) With respect to a revolving loan account, a transaction fee that32 may not exceed the lesser of the following:33 (i) Two percent (2%) of the amount of the transaction.34 (ii) Ten dollars ($10).35 (i) This subdivision applies to a CPAP transaction offered or36 entered into after June 30, 2016. With respect to a CPAP37 transaction, a CPAP provider may impose the following charges38 and fees:39 (i) A fee calculated at an annual rate that does not exceed40 thirty-six percent (36%) of the funded amount.41 (ii) A servicing charge calculated at an annual rate that does42 not exceed seven percent (7%) of the funded amount.

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1 (iii) If the funded amount of the CPAP transaction is less than2 five thousand dollars ($5,000), a one (1) time charge that does3 not exceed two hundred fifty dollars ($250) for obtaining and4 preparing documents.5 (iv) If the funded amount of the CPAP transaction is at least6 five thousand dollars ($5,000), a one (1) time charge that does7 not exceed five hundred dollars ($500) for obtaining and8 preparing documents.9 A CPAP provider may not assess, or collect from the consumer

10 claimant, any other fee or charge in connection with a CPAP11 transaction, including any finance charges under section 201 or12 508 of this chapter.13 The additional charges provided for in subdivisions (f), (g), (h), and (i)14 are not subject to refund or rebate.15 (2) An additional charge may be made for insurance in connection16 with the loan, other than insurance protecting the lender against the17 debtor's default or other credit loss:18 (a) with respect to insurance against loss of or damage to property19 or against liability, if the lender furnishes a clear and specific20 statement in writing to the debtor, setting forth the cost of the21 insurance if obtained from or through the lender and stating that22 the debtor may choose the person, subject to the lender's23 reasonable approval, through whom the insurance is to be24 obtained; and25 (b) with respect to consumer credit insurance providing life,26 accident, unemployment or other loss of income, or health27 coverage, if the insurance coverage is not a factor in the approval28 by the lender of the extension of credit and this fact is clearly29 disclosed in writing to the debtor, and if, in order to obtain the30 insurance in connection with the extension of credit, the debtor31 gives specific affirmative written indication of the desire to do so32 after written disclosure of the cost of the insurance.33 SECTION 12. IC 24-4.5-3-209, AS AMENDED BY P.L.73-2016,34 SECTION 11, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE35 JULY 1, 2017]: Sec. 209. Right to Prepay - (1) Subject to the36 provisions on rebate upon prepayment (section 210 of this chapter), the37 debtor may prepay in full the unpaid balance of a consumer loan,38 refinancing, or consolidation at any time without penalty. With respect39 to a consumer loan that is primarily secured by an interest in land, a40 lender may contract for a penalty for prepayment of the loan in full, not41 to exceed two percent (2%) of any amount prepaid within sixty (60)42 days of the date of the prepayment in full, after deducting all refunds

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1 and rebates as of the date of the prepayment. However, the penalty may2 not be imposed:3 (a) if the loan is refinanced or consolidated with the same4 creditor;5 (b) for prepayment by proceeds of any insurance or acceleration6 after default; or7 (c) after three (3) years from the contract date.8 For purposes of this section, the collection of the amount of any9 conditionally waived closing costs (as allowed under section 202(d)

10 of this chapter) by a creditor, as stipulated in the loan agreement,11 at the time of prepayment in full does not constitute a prepayment12 penalty and is not subject to the limitations set forth in this13 subsection.14 (2) At the time of prepayment of a consumer loan not subject to the15 provisions of rebate upon prepayment (section 210 of this chapter), the16 total finance charge, including the prepaid finance charge but17 excluding the loan origination fee nonrefundable prepaid finance18 charge allowed under this chapter, may not exceed the maximum19 charge allowed under this chapter for the period the loan was in effect.20 For the purposes of determining compliance with this subsection, the21 total finance charge does not include the following:22 (a) The loan origination fee nonrefundable prepaid finance23 charge allowed under this chapter.24 (b) The debtor paid mortgage broker fee, if any, paid to a person25 who does not control, is not controlled by, or is not under26 common control with, the creditor holding the loan at the time a27 consumer loan is prepaid.28 (3) The creditor or mortgage servicer shall provide, in writing, an29 accurate payoff amount for the consumer loan to the debtor within30 seven (7) business days (excluding legal public holidays, Saturdays,31 and Sundays) after the creditor or mortgage servicer receives the32 debtor's written request for the accurate consumer loan payoff amount.33 A payoff statement provided by a creditor or mortgage servicer under34 this subsection must show the date the statement was prepared and35 itemize the unpaid principal balance and each fee, charge, or other sum36 included within the payoff amount. A creditor or mortgage servicer37 who fails to provide the accurate consumer loan payoff amount is liable38 for:39 (a) one hundred dollars ($100) if an accurate consumer loan40 payoff amount is not provided by the creditor or mortgage41 servicer within seven (7) business days (excluding legal public42 holidays, Saturdays, and Sundays) after the creditor or mortgage

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1 servicer receives the debtor's first written request; and2 (b) the greater of:3 (i) one hundred dollars ($100); or4 (ii) the loan finance charge that accrues on the loan from the5 date the creditor or mortgage servicer receives the first written6 request until the date on which the accurate consumer loan7 payoff amount is provided;8 if an accurate consumer loan payoff amount is not provided by the9 creditor or mortgage servicer within seven (7) business days

10 (excluding legal public holidays, Saturdays, and Sundays) after11 the creditor or mortgage servicer receives the debtor's second12 written request, and the creditor or mortgage servicer failed to13 comply with subdivision (a).14 A liability under this subsection is an excess charge under15 IC 24-4.5-5-202.16 (4) As used in this subsection, "mortgage transaction" means a17 consumer loan in which a mortgage or a land contract (or another18 consensual security interest equivalent to a mortgage or a land contract)19 that constitutes a lien is created or retained against land upon which20 there is constructed or intended to be constructed a dwelling that is or21 will be used by the debtor primarily for personal, family, or household22 purposes. This subsection applies to a mortgage transaction with23 respect to which any installment or minimum payment due is24 delinquent for at least sixty (60) days. The creditor, servicer, or the25 creditor's agent shall acknowledge a written offer made in connection26 with a proposed short sale not later than five (5) business days27 (excluding legal public holidays, Saturdays, and Sundays) after the date28 of the offer if the offer complies with the requirements for a qualified29 written request set forth in 12 U.S.C. 2605(e)(1)(B). The creditor,30 servicer, or creditor's agent is required to acknowledge a written offer31 made in connection with a proposed short sale from a third party acting32 on behalf of the debtor only if the debtor has provided written33 authorization for the creditor, servicer, or creditor's agent to do so. Not34 later than thirty (30) business days (excluding legal public holidays,35 Saturdays, and Sundays) after receipt of an offer under this subsection,36 the creditor, servicer, or creditor's agent shall respond to the offer with37 an acceptance or a rejection of the offer. The thirty (30) day period38 described in this subsection may be extended for not more than fifteen39 (15) business days (excluding legal public holidays, Saturdays, and40 Sundays) if, before the end of the thirty (30) day period, the creditor,41 the servicer, or the creditor's agent notifies the debtor of the extension42 and the reason the extension is needed. Payment accepted by a creditor,

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1 servicer, or creditor's agent in connection with a short sale constitutes2 payment in full satisfaction of the mortgage transaction unless the3 creditor, servicer, or creditor's agent obtains:4 (a) the following statement: "The debtor remains liable for any5 amount still owed under the mortgage transaction."; or6 (b) a statement substantially similar to the statement set forth in7 subdivision (a);8 acknowledged by the initials or signature of the debtor, on or before the9 date on which the short sale payment is accepted. As used in this

10 subsection, "short sale" means a transaction in which the property that11 is the subject of a mortgage transaction is sold for an amount that is12 less than the amount of the debtor's outstanding obligation under the13 mortgage transaction. A creditor or mortgage servicer that fails to14 respond to an offer within the time prescribed by this subsection is15 liable in accordance with 12 U.S.C. 2605(f) in any action brought16 under that section.17 (5) This section is not intended to provide the owner of real estate18 subject to the issuance of process under a judgment or decree of19 foreclosure any protection or defense against a deficiency judgment for20 purposes of the borrower protections from liability that must be21 disclosed under 12 CFR 1026.38(p)(3) on the form required by 12 CFR22 1026.38 ("Closing Disclosures" form under the Amendments to the23 2013 Integrated Mortgage Disclosures Rule Under the Real Estate24 Settlement Procedures Act (Regulation X) and the Truth In Lending25 Act (Regulation Z) and the 2013 Loan Originator Rule Under the Truth26 in Lending Act (Regulation Z)).27 SECTION 13. IC 24-4.5-3-301, AS AMENDED BY P.L.35-2010,28 SECTION 50, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE29 JULY 1, 2017]: Sec. 301. (1) For the purposes of this section,30 "consumer loan" includes a loan that is a first lien mortgage transaction31 if the loan is otherwise a consumer loan (IC 24-4.5-1-301.5(9)).32 (2) The lender shall disclose to the debtor to whom credit is33 extended with respect to a consumer loan the information required by34 the Federal Consumer Credit Protection Act (15 U.S.C. 1601 et seq.).35 (3) For purposes of subsection (2), disclosures shall not be required36 on a consumer loan if the transaction is exempt from the Federal37 Consumer Credit Protection Act (15 U.S.C. 1601 et seq.).38 SECTION 14. IC 24-4.5-3-508, AS AMENDED BY P.L.91-2013,39 SECTION 4, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE40 JULY 1, 2017]: Sec. 508. Loan Finance Charge for Supervised Loans41 ) (1) With respect to a supervised loan, including a loan pursuant to a42 revolving loan account, a supervised lender may contract for and

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1 receive a loan finance charge not exceeding that permitted by this2 section.3 (2) The loan finance charge, calculated according to the actuarial4 method, may not exceed the equivalent of the greater of:5 (a) the total of:6 (i) thirty-six percent (36%) per year on that part of the unpaid7 balances of the principal which is two thousand dollars8 ($2,000) or less;9 (ii) twenty-one percent (21%) per year on that part of the

10 unpaid balances of the principal which is more than two11 thousand dollars ($2,000) but does not exceed four thousand12 dollars ($4,000); and13 (iii) fifteen percent (15%) per year on that part of the unpaid14 balances of the principal which is more than four thousand15 dollars ($4,000); or16 (b) twenty-five percent (25%) per year on the unpaid balances of17 the principal.18 (3) This section does not limit or restrict the manner of contracting19 for the loan finance charge, whether by way of add-on, discount, or20 otherwise, so long as the rate of the loan finance charge does not21 exceed that permitted by this section. If the loan is precomputed:22 (a) the loan finance charge may be calculated on the assumption23 that all scheduled payments will be made when due; and24 (b) the effect of prepayment is governed by the provisions on25 rebate upon prepayment in section 210 of this chapter.26 (4) The term of a loan for the purposes of this section commences27 on the date the loan is made. Differences in the lengths of months are28 disregarded, and a day may be counted as one-thirtieth (1/30) of a29 month. Subject to classifications and differentiations the lender may30 reasonably establish, a part of a month in excess of fifteen (15) days31 may be treated as a full month if periods of fifteen (15) days or less are32 disregarded and that procedure is not consistently used to obtain a33 greater yield than would otherwise be permitted.34 (5) Subject to classifications and differentiations the lender may35 reasonably establish, the lender may make the same loan finance36 charge on all principal amounts within a specified range. A loan37 finance charge does not violate subsection (2) if:38 (a) when applied to the median amount within each range, it does39 not exceed the maximum permitted in subsection (2); and40 (b) when applied to the lowest amount within each range, it does41 not produce a rate of loan finance charge exceeding the rate42 calculated according to paragraph (a) by more than eight percent

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1 (8%) of the rate calculated according to paragraph (a).2 (6) The amounts of two thousand dollars ($2,000) and four thousand3 dollars ($4,000) in subsection (2) and thirty dollars ($30) in subsection4 (7) are subject to change pursuant to the provisions on adjustment of5 dollar amounts (IC 24-4.5-1-106). However, notwithstanding6 IC 24-4.5-1-106(1), for the adjustment of the amount of thirty dollars7 ($30), the Reference Base Index to be used is the Index for October8 1992. Notwithstanding IC 24-4.5-1-106(1), for the adjustment of the9 amounts of two thousand dollars ($2,000) and four thousand dollars

10 ($4,000), the Reference Base Index to be used is the Index for October11 2012.12 (7) With respect to a supervised loan not made pursuant to a13 revolving loan account, the lender may contract for and receive a14 minimum loan finance charge of not more than thirty dollars ($30). The15 minimum loan finance charge allowed under this subsection may be16 imposed only if the lender does not assess a loan origination fee17 nonrefundable prepaid finance charge under subsection (8) and:18 (a) the debtor prepays in full a consumer loan, refinancing, or19 consolidation, regardless of whether the loan, refinancing, or20 consolidation is precomputed;21 (b) the loan, refinancing, or consolidation prepaid by the debtor22 is subject to a loan finance charge that:23 (i) is contracted for by the parties; and24 (ii) does not exceed the rate prescribed in subsection (2); and25 (c) the loan finance charge earned at the time of prepayment is26 less than the minimum loan finance charge contracted for under27 this subsection.28 (8) Except as provided in subsection (7), in addition to the loan29 finance charge provided for in this section and to any other charges and30 fees permitted by this chapter, the lender may contract for and receive31 a loan origination fee nonrefundable prepaid finance charge of not32 more than fifty dollars ($50).33 (9) The loan origination fee nonrefundable prepaid finance34 charge provided for in subsection (8) is not subject to refund or rebate.35 (10) Notwithstanding subsections (8) and (9), in the case of a36 supervised loan that is not secured by an interest in land, if a lender37 retains any part of a loan origination fee nonrefundable prepaid38 finance charge charged on a loan that is paid in full by a new loan39 from the same lender, the following apply:40 (a) If the loan is paid in full by the new loan within three (3)41 months after the date of the prior loan, the lender may not charge42 a loan origination fee nonrefundable prepaid finance charge on

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1 the new loan, or, in the case of a revolving loan, on the increased2 credit line.3 (b) The lender may not assess more than two (2) loan origination4 fees nonrefundable prepaid finance charges in any twelve (12)5 month period.6 (11) In the case of a supervised loan that is secured by an interest in7 land, this section does not prohibit a lender from contracting for and8 receiving a fee for preparing deeds, mortgages, reconveyances, and9 similar documents under section 202(1)(d)(ii) of this chapter, in

10 addition to the loan origination fee nonrefundable prepaid finance11 charge provided for in subsection (8).12 SECTION 15. IC 24-4.5-3-512 IS AMENDED TO READ AS13 FOLLOWS [EFFECTIVE JULY 1, 2017]: Sec. 512. Conduct of14 Business Other than Making Loans — A licensee may carry on other15 business at a location where he the licensee makes consumer loans16 unless he the licensee carries on other business for the purpose of17 evasion or violation of this article.18 SECTION 16. IC 24-4.5-5-203 IS AMENDED TO READ AS19 FOLLOWS [EFFECTIVE JULY 1, 2017]: Sec. 203. Civil Liability for20 Violation of Disclosure Provisions — (1) Except as otherwise provided21 in this section, a creditor who, in violation of the provisions on22 disclosure (Part 3) of the Chapter on Credit Sales (Chapter 2) in23 IC 24-4.5-2 and the Chapter on Loans (Chapter 3), IC 24-4.5-3, fails24 to disclose information to a person entitled to the information under25 this article is liable to that person in an amount equal to the sum of:26 (a) the following:27 (1) in the case of an individual action, twice the amount of the28 credit service or loan finance charge in connection with the29 transaction, but the liability pursuant to this subdivision shall be30 not less than one hundred dollars ($100) nor more than one31 thousand dollars ($1,000); or32 (2) in the case of a class action, an amount the court allows,33 except that as to each member of the class no minimum recovery34 is applicable, and the total recovery under this subdivision in any35 class action or series of class actions arising out of the same36 failure to comply by the same creditor may not be more than the37 lesser of:38 (i) five hundred thousand dollars ($500,000); or39 (ii) one percent (1%) of the net worth of the creditor; and40 (b) in the case of a successful action to enforce the liability under41 paragraph (a), the costs of the action together with reasonable attorney's42 fees as determined by the court. In determining the amount of the

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1 award in a class action, the court shall consider, among other relevant2 factors, the amount of any award granted under the federal Consumer3 Credit Protection Act (15 U.S.C. 1601 et seq.), the frequency and4 persistence of failures of compliance by the creditor, the resources of5 the creditor, the number of persons adversely affected, and the extent6 to which the creditor's failure of compliance was intentional.7 (2) A creditor has no liability under this section if within sixty (60)8 days after discovering an error, and prior to the institution of an action9 under this section or the receipt of written notice of the error, the

10 creditor notifies the person concerned of the error and makes whatever11 adjustments in the appropriate account are necessary to assure that the12 person will not be required to pay a credit service charge or loan13 finance charge in excess of the amount or percentage rate actually14 disclosed.15 (3) A creditor may not be held liable in any action brought under16 this section for a violation of this article if the creditor shows by a17 preponderance of evidence that the violation was not intentional and18 resulted from a bona fide error notwithstanding the maintenance of19 procedures reasonably adapted to avoid the error.20 (4) If there are multiple obligors in a consumer credit transaction or21 consumer lease, there may not be more than one (1) recovery of22 damages under subdivision (a)(1) for one (1) violation of this article23 with respect to that consumer credit transaction or consumer lease.24 (5) The multiple failure to disclose to any person any information25 required under this article to be disclosed in connection with a single26 account under an open end consumer credit plan, a single consumer27 credit sale, a consumer loan, a consumer lease, or another extension of28 consumer credit entitles that person to a single recovery under this29 section. However, continued failure to disclose after a recovery has30 been granted gives rise to rights to additional recoveries.31 (6) Any action which may be brought under this section against the32 original creditor in any credit transaction involving a security interest33 in land may be maintained against any subsequent assignee of the34 original creditor where the assignee, its subsidiaries, or affiliates were35 in a continuing business relationship with the original creditor either at36 the time the credit was extended or at the time of the assignment,37 unless the assignment was involuntary, or the assignee shows by a38 preponderance of evidence that it did not have reasonable grounds to39 believe that the original creditor was engaged in violations of this40 article, and that it maintained procedures reasonably adapted to apprise41 it of the existence of the violations.42 (7) No action pursuant to this section may be brought more than one

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1 (1) year after the date of the occurrence of the violations.2 (8) In this section, creditor includes a person who in the ordinary3 course of business regularly extends or arranges for the extension of4 credit, or offers to arrange for the extension of credit.5 SECTION 17. IC 24-4.5-5-204 IS AMENDED TO READ AS6 FOLLOWS [EFFECTIVE JULY 1, 2017]: Sec. 204. Debtor's Right to7 Rescind Certain Transactions — (1) A violation by a creditor of8 Section 125 of the Federal Consumer Credit Protection Act (as defined9 in IC 24-4.5-1-302) concerning the debtor's right to rescind a

10 transaction that is a consumer credit sale or a consumer loan constitutes11 a violation of IC 24-4.5. A creditor may not accrue interest during the12 period when a consumer loan may be rescinded under Section 125 of13 the Federal Consumer Protection Act (15 U.S.C. 1635).14 (2) A creditor must make available for disbursement the proceeds15 of a transaction subject to subsection (1) on the later of:16 (A) the date the creditor is reasonably satisfied that the consumer17 has not rescinded the transaction; or18 (B) the first business day after the expiration of the rescission19 period under subsection (1).20 SECTION 18. IC 24-4.5-7-301, AS AMENDED BY P.L.35-2010,21 SECTION 83, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE22 JULY 1, 2017]: Sec. 301. (1) For purposes of this section, the lender23 shall disclose to the borrower to whom credit is extended with respect24 to a small loan the information required by the Federal Consumer25 Credit Protection Act (15 U.S.C. 1601 et seq.).26 (2) In addition to the requirements of subsection (1), the lender must27 conspicuously display in bold type a notice to the public both in the28 lending area of each business location and in the loan documents the29 following statement:30 "WARNING: A small loan is not intended to meet long term31 financial needs. A small loan should be used only to meet short32 term cash needs. The cost of your small loan may be higher than33 loans offered by other lending institutions. Small loans are34 regulated by the State of Indiana Department of Financial35 Institutions.36 A borrower may rescind a small loan without cost by paying the37 cash amount of the principal of the small loan to the lender not38 later than the end of the business day immediately following the39 day on which the small loan was made.".40 (3) The statement required in subsection (2) must be in:41 (a) 14 point bold face type in the loan documents; and42 (b) not less than one (1) inch bold print in the lending area of the

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1 business location.2 (4) When a borrower enters into a small loan, the lender shall3 provide the borrower with a pamphlet approved by the department that4 describes:5 (a) the availability of debt management and credit counseling6 services; and7 (b) the borrower's rights and responsibilities in the transaction.8 SECTION 19. IC 24-4.5-7-405 IS AMENDED TO READ AS9 FOLLOWS [EFFECTIVE JULY 1, 2017]: Sec. 405. (1) This section

10 does not apply to a business that is licensed by the department for a11 purpose other than consumer loans.12 (2) A lender shall not conduct the business of making small loans13 under this chapter within an office, suite, room, or place of business14 where another business is solicited or engaged unless the lender obtains15 a written opinion from the director of the department that the licensee16 may carry on other business would not be contrary to the best interests17 of consumers. at a location where the licensee makes small loans18 unless the licensee carries on other business for the purpose of19 evasion or violation of this article.20 SECTION 20. IC 24-7-1-2 IS AMENDED TO READ AS21 FOLLOWS [EFFECTIVE JULY 1, 2017]: Sec. 2. Except as provided22 in this article, the provisions of:23 (1) the Federal Consumer Credit Protection Act (15 U.S.C. 160124 et seq.) and regulations adopted under it; that act;25 (2) IC 24-4.5;26 (3) IC 26-1-1-201(37);27 (4) IC 26-1-2 concerning the creation of a security interest in28 property;29 (5) IC 26-1-9.1; and30 (6) rules adopted under the statutes described in subdivisions (2)31 through (5);32 do not apply to a rental purchase agreement.33 SECTION 21. IC 24-7-2-2.5 IS ADDED TO THE INDIANA CODE34 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY35 1, 2017]: Sec. 2.5. "Consumer Credit Protection Act" has the36 meaning set forth in IC 24-4.5-1-302.37 SECTION 22. IC 24-7-2-4 IS REPEALED [EFFECTIVE JULY 1,38 2017]. Sec. 4. "Federal Consumer Credit Protection Act" has the39 meaning set forth in IC 24-4.5-1-302.40 SECTION 23. IC 24-7-3-2 IS AMENDED TO READ AS41 FOLLOWS [EFFECTIVE JULY 1, 2017]: Sec. 2. A lessor shall42 disclose to a lessee the information required under section 3 of this

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1 chapter. However, if the Federal Consumer Credit Protection Act (152 U.S.C. 1601 et seq.) is amended to govern lease-purchase disclosures,3 the lessor may disclose the information required under the Federal4 Consumer Credit Protection Act (15 U.S.C. 1601 et seq.) instead of the5 disclosures required under this chapter.6 SECTION 24. IC 25-11-1-2 IS AMENDED TO READ AS7 FOLLOWS [EFFECTIVE JULY 1, 2017]: Sec. 2. The term "collection8 agency" does not include the following:9 (a) Attorney at law.

10 (b) Persons regularly employed on a regular wage or salary in the11 capacity of credit men or in a similar capacity except as an12 independent contractor.13 (c) Banks, including trust departments, fiduciaries, and financial14 institutions; including licensees under IC 24-4.4 and IC 24-4.5;15 and licensees under IC 28-5-1.16 (d) Licensed real estate brokers.17 (e) Employees of licensees under this chapter.18 (f) Any person, firm, partnership, limited liability company, or19 corporation engaged in any business enterprise in the state whose20 primary object, business, or pursuit is not the collection of claims,21 as the term is defined by the provisions of this chapter.22 (g) Any electric, gas, water, and or telephone public utilities, their23 utility and its respective employees, agents, representative24 agents, representatives, and individual contractors.25 (h) Any express company regulated under IC 8-2.1 or IC 8-3.26 SECTION 25. IC 28-1-8-0.5 IS AMENDED TO READ AS27 FOLLOWS [EFFECTIVE JULY 1, 2017]: Sec. 0.5. As used in this28 chapter, "corporation" means:29 (1) a bank;30 (2) a trust company;31 (3) a corporate fiduciary;32 (4) a savings bank;33 (5) a savings association; or34 (6) an industrial loan and investment company that maintains35 federal deposit insurance; or36 (7) a credit union.37 SECTION 26. IC 28-1-8-0.7, AS AMENDED BY P.L.13-2013,38 SECTION 72, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE39 JULY 1, 2017]: Sec. 0.7. As used in this chapter, "shareholder", with40 respect to a:41 (1) mutual savings bank; or42 (2) mutual savings association; or

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1 (3) credit union;2 refers to a member of the mutual savings bank, or mutual savings3 association, or credit union, as applicable.4 SECTION 27. IC 28-1-8-2, AS AMENDED BY P.L.27-2012,5 SECTION 45, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE6 JULY 1, 2017]: Sec. 2. (a) A sale, lease, exchange, or other disposition7 described in section 1 of this chapter must first be proposed by the8 board of directors by the adoption of a resolution that:9 (1) sets forth the terms and conditions of the sale, lease, exchange,

10 or other disposition; and11 (2) directs that the proposed disposition be submitted to a vote of12 the shareholders at the annual meeting or a special meeting.13 (b) The meeting described in subsection (a)(2) shall:14 (1) be called by in the resolution and notice of the meeting shall15 required by subsection (a); and16 (2) be given in the manner provided in accordance with:17 (A) IC 28-13-5-8, in the case of a corporation other than a18 credit union; and19 (B) IC 28-7-1-14, in the case of a credit union.20 SECTION 28. IC 28-1-8-3, AS AMENDED BY P.L.27-2012,21 SECTION 46, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE22 JULY 1, 2017]: Sec. 3. (a) Before a proposed disposition described in23 section 1 of this chapter is submitted to a vote of the shareholders, the24 resolution proposing the disposition shall be submitted for the approval25 of the department.26 (b) Subject to section 5(c) 5(d) of this chapter, and any approvals27 required under federal law, the department may approve a resolution28 if the corporation has and will have assets in excess of the corporation's29 liabilities and either of the following applies:30 (1) The corporation intends to merge out of existence under31 IC 28-1-7-1 or IC 28-7-1-33, as applicable.32 (2) The corporation intends to voluntarily dissolve under33 IC 28-1-9 or IC 28-7-1-27.1, as applicable.34 (c) An officer or a director of a corporation whose proposed35 disposition is approved by the department under subsection (b) may not36 negotiate for or receive any economic benefit in connection with any37 sale of assets under this chapter, except for:38 (1) compensation and other benefits paid to the officer or director39 and to officers and directors of the purchasing institution in the40 ordinary course of business;41 (2) any economic benefit realized by all shareholders as a result42 of the disposition; or

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1 (3) any economic benefit received as part of a compensation or2 benefit plan existing at the time of the disposition and approved3 before the initiation of sale negotiations.4 (d) If the department approves a resolution submitted under this5 section, the department shall:6 (1) write or stamp on the resolution:7 (A) the words "Approved by the Department of Financial8 Institutions of the State of Indiana"; and9 (B) the date of the approval; and

10 (2) place the impression of the seal of the department and the11 signature of the director or the director's authorized designee12 beneath the approval stamp.13 SECTION 29. IC 28-1-8-4 IS AMENDED TO READ AS14 FOLLOWS [EFFECTIVE JULY 1, 2017]: Sec. 4. If a resolution15 proposing a disposition described in section 1 of this chapter is16 approved by the department, the resolution may then be submitted to17 the shareholders at the annual meeting or a special meeting. The18 resolution shall be authorized upon receiving the affirmative votes of19 two-thirds (2/3) of the outstanding shares. However, the department20 may permit the resolution to be authorized without receiving21 shareholder approval if the corporation whose assets are to be22 disposed of is in danger of insolvency.23 SECTION 30. IC 28-1-8-5, AS AMENDED BY P.L.27-2012,24 SECTION 47, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE25 JULY 1, 2017]: Sec. 5. (a) This section does not apply to a26 shareholder of a credit union that is the subject of a proposed27 transaction concerning the sale, lease, exchange, or other28 disposition of the credit union's property or assets under this29 chapter.30 (a) (b) Subject to subsection (c), (d), the rights of dissenting31 shareholders in the case of a merger or consolidation, as set forth in32 IC 28-1-7-21, apply to the sale, lease, exchange, or other disposition of33 the property and assets of a corporation under this chapter. Any34 dissenting shareholder shall have such rights and remedies as provided35 for in IC 28-1-7-21.36 (b) (c) For purposes of the application of IC 28-1-7-21 to this37 chapter, the "effective date" of a sale, lease, exchange, or other38 disposition under this chapter, within the meaning of IC 28-1-7-21, is39 the date upon which the disposition was authorized by the shareholders40 of the corporation.41 (c) (d) In a proposed disposition described in section 3(b) of this42 chapter, if the corporation that is the subject of the proposed

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1 disposition is a mutual savings bank or a mutual savings association,2 the rights and remedies for dissenting shareholders set forth in3 IC 28-1-7-21 do not apply.4 SECTION 31. IC 28-1-11-4, AS AMENDED BY P.L.186-2015,5 SECTION 29, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE6 JULY 1, 2017]: Sec. 4. (a) Except as otherwise provided in this article,7 the business of dealing in investment securities by any bank or trust8 company is limited to purchasing and selling securities without9 recourse, solely upon the order and for the account of customers and in

10 no event for its own account. A bank or trust company may not11 underwrite or guarantee all or any part of any issue of securities other12 than obligations issued or guaranteed by or on behalf of the state or any13 political subdivision of the state or any agency or instrumentality of14 either. A bank or trust company may purchase for its own account and15 sell investment securities under such limitations and restrictions as the16 department prescribes by regulation, rule, policy, or guidance, but in no17 event may the total amount of the investment securities of any one (1)18 obligor or maker, purchased or held by a bank or trust company for its19 own account, exceed at any time ten percent (10%) of the amount of20 the total equity capital of the bank or trust company. The limitations21 imposed by this section do not apply to the direct or indirect obligations22 of the United States or the direct obligations of a United States territory23 or insular possession or of the state of Indiana or any municipal24 corporation or taxing district in Indiana. A bank or trust company may25 purchase for its own account and sell shares of stock in federal or state26 chartered small business investment companies that have received a27 permit or license to operate under the federal Small Business28 Investment Act (15 U.S.C. 681). However, a bank or trust company29 may not acquire shares in any small business investment company if,30 upon the making of that acquisition, the aggregate amount of shares in31 small business investment companies then held by the bank would32 exceed five percent (5%) of its total equity capital.33 (b) A bank or trust company may purchase for its own account and34 sell:35 (1) shares of open-end investment companies the portfolios of36 which consist solely of securities that are eligible for purchase37 and sale by national banking associations; and38 (2) collateralized obligations that are eligible for purchase and39 sale by national banking associations. However, a bank or trust40 company may purchase for its own account and sell the41 obligations only to the extent that a national banking association42 can purchase and sell those obligations.

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1 (c) A bank or trust company may deposit its funds in:2 (1) a federally chartered savings association;3 (2) a savings association or other entity organized and operated4 according to federal law or the laws of any state or the District of5 Columbia; or6 (3) a bank organized and operated according to federal law or the7 laws of any state or the District of Columbia;8 the accounts of which are insured by the Federal Deposit Insurance9 Corporation.

10 (d) A bank or trust company may not purchase for its own account11 any bond, note, or other evidence of indebtedness that is commonly12 designated as a security that is speculative in character or that has13 speculative characteristics. For the purposes of this subsection, a14 security is speculative or has speculative characteristics if at the time15 of purchase the security:16 (1) is rated below the first four (4) rating classes by a generally17 recognized security rating service;18 (2) is in default; or19 (3) is otherwise considered speculative by the director.20 (e) A bank or trust company may purchase for its own account a21 security that is not rated by a generally recognized security rating22 service if:23 (1) the bank or trust company at the time of purchase obtains24 financial information that is adequate to document the investment25 quality of the security; and26 (2) the security is not otherwise considered speculative by the27 director.28 (f) Except as otherwise authorized by this title, a bank or trust29 company may not acquire for its own account, whether by purchase30 or otherwise, any share of stock of a corporation that is not a31 subsidiary of that bank or trust company unless the purchase32 acquisition is considered expedient to prevent loss from a debt33 previously contracted in good faith. Any shares of stock or other34 ownership interest in a corporation or another entity thus acquired35 by a bank or trust company and that would not have been eligible for36 purchase acquisition shall be sold and disposed of within six (6)37 months from the date of acquisition unless the director grants an38 extension of time for the sale and disposition.39 (g) Notwithstanding any other provision of this article, a bank or40 trust company may purchase for its own account shares of stock of a41 banker's bank insured by the Federal Deposit Insurance Corporation or42 a holding company that owns or controls a banker's bank insured by the

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1 Federal Deposit Insurance Corporation. For the purposes of this2 subsection, a "banker's bank" is a bank (as defined in IC 28-2-14-2):3 (1) the stock of which is owned exclusively by other banks (as4 defined in IC 28-2-14-2), or by a bank holding company the stock5 of which is owned exclusively by other banks (as defined in6 IC 28-2-14-2); and7 (2) that is engaged exclusively in providing services to other8 banks (as defined in IC 28-2-14-2), and to their officers, directors,9 and employees.

10 A bank's or trust company's holdings of the stock of an insured banker's11 bank or of a holding company that owns or controls an insured banker's12 bank may not exceed ten percent (10%) of the capital and surplus of13 the bank or trust company. A bank or trust company may not purchase14 the stock of an insured banker's bank or of a holding company that15 owns or controls an insured banker's bank if, after the purchase, the16 bank or trust company would own more than five percent (5%) of any17 class of voting securities of the banker's bank or holding company.18 (h) Notwithstanding any other provision of this article, a bank or19 trust company may invest in a casualty insurance company organized20 solely for the purpose of insuring banks, trust companies, and bank21 holding companies and their officers and directors from and against22 liabilities, including those covered by bankers' blanket bonds and23 director and officer liability insurance and other public liability24 insurance. The investment must take the form of:25 (1) the purchase for the bank's or trust company's own account of26 shares of stock of the casualty insurance company or shares of27 stock of an association of banks organized for the purpose of28 funding the casualty insurance company; or29 (2) loans to such an association of banks.30 The total investment of any bank or trust company under this31 subsection may not exceed five percent (5%) of the capital and surplus32 of the bank or trust company.33 (i) Any bank or trust company may establish or acquire a subsidiary34 that engages in:35 (1) the sale, distribution, or underwriting of securities issued by36 investment companies (as defined in Section 3 of the Investment37 Company Act of 1940 (15 U.S.C. 80a-3); or38 (2) the underwriting or distribution of securities backed by or39 representing an interest in mortgages.40 (j) As used in this section, "total equity capital" means unimpaired41 capital stock, unimpaired surplus, unimpaired undivided profits,42 subordinated debt that has been approved by the state or federal

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1 regulatory agencies, and one hundred percent (100%) of loan reserves.2 (k) The department may define an investment security by3 department policy or by rule.4 (l) A bank or trust company may establish a trading account for the5 purchase and resale of securities that are otherwise eligible for6 purchase or resale by the bank or trust company. The trading account7 must comply with the requirements established by policy or rule of the8 department.9 (m) A bank or trust company that purchases a security for its own

10 account shall maintain sufficient records of the security to allow the11 security to be properly identified by the department for examination12 purposes.13 SECTION 32. IC 28-1-13-10 IS AMENDED TO READ AS14 FOLLOWS [EFFECTIVE JULY 1, 2017]: Sec. 10. (a) Except as15 otherwise provided, and subject to subsection (b), an officer, director,16 owner, partner, employee, or attorney of any bank or trust company17 who stipulates for, receives, or consents or agrees to receive, any fee,18 commission, gift, or thing of value, from any person, for the purpose of19 procuring or endeavoring to procure for any person any loan from or20 the purchase or discount of any paper, note, draft, check, or bill of21 exchange by the bank or trust company, commits a Class A22 misdemeanor.23 (b) The prohibitions set forth in subsection (a) do not apply to24 a bank's or a trust company's:25 (1) bona fide employment agreements, including benefit or26 compensation plans; or27 (2) compensation agreements with third party independent28 contractors.29 SECTION 33. IC 28-1-20-4, AS AMENDED BY P.L.186-2015,30 SECTION 30, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE31 JULY 1, 2017]: Sec. 4. (a) Except as provided in subsections (c), (d),32 (g), and (o), it is unlawful for any person, firm, limited liability33 company, or corporation (other than a bank or trust company, a bank34 holding company, a subsidiary of a bank or trust company, a subsidiary35 of a bank holding company, a subsidiary of a savings bank, or a36 subsidiary of a savings association organized or reorganized under37 IC 28 or statutes in effect at the time of organization or reorganization38 or under the laws of the United States):39 (1) to use the word, or a derivation of the word, "bank", "banc",40 "banco", or "bankcor", as a part of the name or title of the person,41 firm, limited liability company, or corporation, whether the word42 is used as the person's, firm's, limited liability company's, or

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1 corporation's official entity name or an assumed business2 name under IC 23-15-1-1, if the use of the word would create a3 substantial likelihood of misleading the public by implying that4 the person, firm, limited liability company, or corporation is a5 state or federally chartered bank, trust company, savings bank, or6 savings association; or7 (2) to advertise or represent the person, firm, limited liability8 company, or corporation to the public:9 (A) as a bank or trust company or a corporate fiduciary; or

10 (B) as affording the services or performing the duties which by11 law only a bank or trust company or a corporate fiduciary is12 entitled to afford and perform.13 (b) A financial institution organized under the laws of any state or14 the United States is authorized to do business in Indiana:15 (1) at its principal office;16 (2) at any branch office; or17 (3) otherwise;18 using a name other than its official entity name if the financial19 institution notifies the department at least ten (10) days before using20 the other name.21 (c) Notwithstanding the prohibitions of this section, An out-of-state22 financial institution with the word "bank" in its legal name may use the23 word "bank" if the financial institution is insured by the Federal24 Deposit Insurance Corporation or its successor.25 (d) Notwithstanding subsection (a), A building and loan association26 organized under IC 28-4 (before its repeal) may include in its name or27 title:28 (1) the words "savings bank"; or29 (2) the word "bank" if the name or title also includes either the30 words "savings bank" or letters "SB".31 A building and loan association that includes "savings bank" in its title32 under this section does not by that action become a savings bank for33 purposes of IC 28-6.1.34 (e) The name or title of a savings bank governed by IC 28-6.1 must35 include the words "savings bank" or the letters "SB".36 (f) A savings association may include in its name the words37 "building and loan association".38 (g) Notwithstanding subsection (a), A bank holding company (as39 defined in 12 U.S.C. 1841) may use the word "bank" or "banks" as a40 part of its name. However, this subsection does not permit a bank41 holding company to advertise or represent itself to the public as42 affording the services or performing the duties that by law a bank or

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1 trust company only is entitled to afford and perform.2 (h) The department is authorized to investigate the business affairs3 of any person, firm, limited liability company, or corporation that uses4 "bank", "banc", or "banco" in its title or holds itself out as a bank,5 corporate fiduciary, or trust company for the purpose of determining6 whether the person, firm, limited liability company, or corporation is7 violating any of the provisions of this article, and, for that purpose, the8 department and its agents shall have access to any and all of the books,9 records, papers, and effects of the person, firm, limited liability

10 company, or corporation. In making its examination, the department11 may examine any person and the partners, officers, members, or agents12 of the firm, limited liability company, or corporation under oath,13 subpoena witnesses, and require the production of the books, records,14 papers, and effects considered necessary. On application of the15 department, the circuit or superior court of the county in which the16 person, firm, limited liability company, or corporation maintains a17 place of business shall, by proper proceedings, enforce the attendance18 and testimony of witnesses and the production and examination of19 books, papers, records, and effects.20 (i) The department is authorized to exercise the powers under21 IC 28-11-4 against a person, firm, limited liability company, or22 corporation that improperly holds itself out as a financial institution.23 (j) A person, firm, limited liability company, or corporation who24 violates this section is subject to a penalty of five hundred dollars25 ($500) per day for each and every day during which the violation26 continues. The penalty imposed shall be recovered in the name of the27 state on relation of the department and, when recovered, shall be paid28 into the financial institutions fund established by IC 28-11-2-9.29 (k) The word, or a derivation of the word, "bank", "banc", "banco",30 or "bankcor" may not be included in the name of a corporate fiduciary31 if the inclusion of the word would create a substantial likelihood of32 misleading the public by implying that the corporate fiduciary is a state33 or federally chartered bank, trust company, savings bank, or savings34 association.35 (l) A person, firm, limited liability company, or corporation may not36 use the name of an existing depository financial institution or holding37 company of a depository financial institution, or a name confusingly38 similar to that of an existing depository financial institution or holding39 company of a depository financial institution, when marketing to or40 soliciting business from a customer or prospective customer if the41 reference to the existing depository financial institution or holding42 company of a depository financial institution is:

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1 (1) without the consent of the existing depository financial2 institution or holding company of a depository financial3 institution; and4 (2) in a manner that could cause a reasonable person to believe5 that the marketing material or solicitation:6 (A) originated from;7 (B) is endorsed by; or8 (C) is in any other way the responsibility of;9 the existing depository financial institution or holding company of a

10 depository financial institution.11 (m) An existing depository financial institution or holding company12 of a depository financial institution may, in addition to any other13 remedies available under the law, report an alleged violation of14 subsection (l) to the department. If the department finds that the15 marketing material or solicitation in question is in violation of16 subsection (l), the department may direct the person, firm, limited17 liability company, or corporation to cease and desist from using that18 marketing material or solicitation in Indiana. If that person, firm,19 limited liability company, or corporation persists in using the marketing20 material or solicitation, the department may impose a civil penalty of21 up to fifteen thousand dollars ($15,000) for each violation. Each22 instance in which the marketing material or solicitation is sent to a23 customer or prospective customer constitutes a separate violation of24 subsection (l).25 (n) Nothing in subsection (l) or (m) prohibits the use of or reference26 to the name of an existing depository financial institution or holding27 company of a depository financial institution in marketing materials or28 solicitations, if the use or reference does not deceive or confuse a29 reasonable person regarding whether the marketing material or30 solicitation:31 (1) originated from;32 (2) is endorsed by; or33 (3) is in any other way the responsibility of;34 the existing depository financial institution or holding company of a35 depository financial institution.36 (o) A person, firm, limited liability company, or corporation may37 use the word, or a derivation of the word, "bank", "banc", "banco", or38 "bankcor" if the use of the word would not create a substantial39 likelihood of misleading the public by implying that the person, firm,40 limited liability company, or corporation is a state or federally41 chartered bank, trust company, savings bank, or savings association.42 (p) As used in this section, "depository financial institution" has the

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1 meaning set forth in IC 28-1-1-6.2 (q) The department may adopt rules under IC 4-22-2 to implement3 this section.4 SECTION 34. IC 28-7-1-9, AS AMENDED BY P.L.137-2014,5 SECTION 27, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE6 JULY 1, 2017]: Sec. 9. (a) A credit union has the following powers:7 (1) To issue shares of its capital stock to its members. No8 commission or compensation shall be paid for securing members9 or for the sale of shares.

10 (2) To make loans to officers, directors, or committee members11 under sections 17.1 and 17.2 of this chapter.12 (3) To invest in any of the following:13 (A) Bonds, notes, or certificates that are the direct or indirect14 obligations of the United States, or of the state, or the direct15 obligations of a county, township, city, town, or other taxing16 district or municipality or instrumentality of Indiana and that17 are not in default.18 (B) Bonds or debentures issued by the Federal Home Loan19 Bank Act (12 U.S.C. 1421 through 1449) or the Home Owners'20 Loan Act (12 U.S.C. 1461 through 1468).21 (C) Obligations of national mortgage associations issued under22 the authority of the National Housing Act.23 (D) Mortgages on real estate situated in Indiana which are24 fully insured under Title 2 of the National Housing Act (1225 U.S.C. 1707 through 1715z).26 (E) Obligations issued by farm credit banks and banks for27 cooperatives under the Farm Credit Act of 1971 (12 U.S.C.28 2001 through 2279aa-14).29 (F) Savings and loan associations, other credit unions that are30 insured under section 31.5 of this chapter, and certificates of31 indebtedness or investment of an industrial loan and32 investment company if the association or company is federally33 insured. Not more than twenty percent (20%) of the assets of34 a credit union may be invested in the shares or certificates of35 an association or company, nor more than forty percent (40%)36 in all such associations and companies.37 (G) Corporate credit unions.38 (H) Federal funds or similar types of daily funds transactions39 with other financial institutions.40 (I) Shares or certificates of an open-end management41 investment company registered with the Securities and42 Exchange Commission under the Investment Company Act of

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1 1940 (15 U.S.C. 80a-1 through 15 U.S.C. 80a-3 and 15 U.S.C.2 80a-4 through 15 U.S.C. 80a-64), if all of the following3 conditions are met:4 (i) The fund's assets consist of and are limited to securities5 in which a credit union may invest directly.6 (ii) The credit union has an equitable and undivided interest7 in the underlying assets of the fund.8 (iii) The credit union is not liable for acts or obligations of9 the fund.

10 (iv) The credit union's investment in any one (1) fund does11 not exceed fifteen percent (15%) of the amount of the credit12 union's net worth.13 (J) For a credit union that is well capitalized (as defined in Part14 702 of the Rules and Regulations of the National Credit Union15 Administration, 12 CFR 702), investment securities, as may be16 defined by a statute or a policy or rule of the department and17 subject to the following:18 (i) The department may prescribe, by policy or rule,19 limitations or restrictions on a credit union's investment in20 investment securities.21 (ii) The total aggregate amount of investment securities22 purchased or held by a credit union may never exceed at any23 given time ten percent (10%) of the capital and surplus of24 the credit union. However, the limitations imposed by this25 item do not apply to investments in the direct or indirect26 obligations of the United States or in the direct obligations27 of a United States territory or insular possession, or in the28 direct obligations of the state or any municipal corporation29 or taxing district in Indiana.30 (iii) A credit union may not purchase for its own account31 any bond, note, or other evidence of indebtedness that is32 commonly designated as a security that is speculative in33 character or that has speculative characteristics. For the34 purposes of this item, a security is speculative or has35 speculative characteristics if at the time of purchase the36 security is in default, is rated below the first four (4) rating37 classes by a generally recognized security rating service, or38 is otherwise considered speculative by the director.39 (iv) A credit union may purchase for its own account a40 security that is not rated by a generally recognized security41 rating service if the credit union at the time of purchase42 obtains financial information that is adequate to document

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1 the investment quality of the security and if the security is2 not otherwise considered speculative by the director.3 (v) A credit union that purchases a security for its own4 account shall maintain sufficient records of the security to5 allow the security to be properly identified by the6 department for examination purposes.7 (vi) Except as otherwise authorized by this title, a credit8 union may not acquire for its own account, whether by9 purchase or otherwise, any share of stock of a corporation

10 If a credit union possesses that is not a subsidiary of that11 credit union unless the acquisition is considered12 expedient to prevent loss from a debt previously13 contracted in good faith. Any shares of stock or another14 equity investment as a result of a loan default, the other15 ownership interest in a corporation or another entity16 thus acquired by a credit union and that would not have17 been eligible for acquisition shall dispose be sold and18 disposed of the investment within a reasonable period that19 does not exceed one (1) year or a longer period if approved20 by the department. six (6) months from the date of21 acquisition unless the director grants an extension of22 time for the sale and disposition.23 (vii) Subject to items (i) through (iv), a credit union may24 purchase yankee dollar deposits, eurodollar deposits,25 banker's acceptances, deposit notes, bank notes with original26 weighted average maturities of less than five (5) years, and27 investments in obligations of, or issued by, any state or28 political subdivision (including any agency, corporation, or29 instrumentality of a state or political subdivision).30 (K) Collateralized obligations that are eligible for purchase31 and sale by federal credit unions. However, a credit union may32 purchase for its own account and sell the obligations only to33 the extent that a federal credit union can purchase and sell34 those obligations.35 (4) With the prior approval of the department, and subject to the36 limitations of this subsection, a credit union may organize, invest37 in, or loan money to a credit union service organization (as38 defined in Part 712 of the regulations of the National Credit39 Union Administration, 12 CFR 712). A credit union may not loan40 or invest in a credit union service organization if the aggregate41 amount of all such loans or investments in a particular credit42 union service organization is greater than ten percent (10%) of the

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1 capital, surplus, and unimpaired shares of the credit union without2 the prior written approval of the department. A credit union may3 organize, invest in, or loan money to a credit union service4 organization described in this subdivision only if the following5 requirements are met:6 (A) The credit union service organization is adequately7 capitalized or has a reasonable plan for adequate capitalization8 if the credit union service organization is to be formed or is9 newly formed.

10 (B) The credit union service organization is structured and11 operated as a separate legal entity from the credit union.12 (C) The credit union obtains a written legal opinion that the13 credit union service organization is structured and operated in14 a manner that limits the credit union's potential liability for the15 debts and liabilities of the credit union service organization to16 not more than the loss of money invested in or loaned to the17 credit union service organization by the credit union.18 (D) The credit union service organization agrees in writing to19 prepare financial statements and provide the financial20 statements to the credit union at least quarterly, and to the21 department upon request.22 (E) The credit union service organization agrees in writing to23 obtain an audit of the credit union service organization from a24 certified public accountant at least annually and provide a25 copy of each audit report to the credit union, and to the26 department upon request. A wholly owned credit union service27 organization is not required to obtain a separate annual audit28 if the credit union service organization is included in the29 annual consolidated audit of the credit union that is the credit30 union service organization's parent.31 (F) The credit union service organization operates in32 compliance with all applicable federal and state laws.33 (5) To deposit its funds into:34 (A) depository institutions that are federally insured; or35 (B) state chartered credit unions that are privately insured by36 an insurer approved by the department.37 (6) To purchase, hold, own, or convey real estate as may be38 conveyed to the credit union in satisfaction of debts previously39 contracted or in exchange for real estate conveyed to the credit40 union.41 (7) To own, hold, or convey real estate as may be purchased by42 the credit union upon judgment in its favor or decrees of

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1 foreclosure upon mortgages.2 (8) To issue shares of stock and upon the terms, conditions,3 limitations, and restrictions and with the relative rights as may be4 stated in the bylaws of the credit union, but no stock may have5 preference or priority over the other to share in the assets of the6 credit union upon liquidation or dissolution or for the payment of7 dividends except as to the amount of the dividends and the time8 for the payment of the dividends as provided in the bylaws.9 (9) To charge the member's share account for the actual cost of a

10 necessary locator service when the member has failed to keep the11 credit union informed about the member's current address. The12 charge shall be made only for amounts paid to a person or concern13 normally engaged in providing such service, and shall be made14 against the account or accounts of any one (1) member not more15 than once in any twelve (12) month period.16 (10) To transfer to an accounts payable account, a dormant17 account, or a special account share accounts which have been18 inactive, except for dividend credits, for a period of at least two19 (2) years. The credit union shall not consider the payment of20 dividends on the transferred account.21 (11) To invest in fixed assets with the funds of the credit union.22 An investment in fixed assets in excess of five percent (5%) of its23 assets is subject to the approval of the department. A credit union24 may rent excess space at the credit union's main office or branch25 as a source of income.26 (12) To establish branch offices, upon approval of the department,27 provided that all books of account shall be maintained at the28 principal office.29 (13) To pay an interest refund on loans proportionate to the30 interest paid during the dividend period by borrowers who are31 members at the end of the dividend period.32 (14) To purchase life savings and loan protection insurance for33 the benefit of the credit union and its members, if:34 (A) the coverage is placed with an insurance company licensed35 to do business in Indiana; and36 (B) no officer, director, or employee of the credit union37 personally benefits, directly or indirectly, from the sale or38 purchase of the coverage.39 (15) To sell and cash negotiable checks, travelers checks, and40 money orders for members.41 (16) To purchase members' notes from any liquidating credit42 union, with written approval from the department, at prices agreed

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1 upon by the boards of directors of both the liquidating and the2 purchasing credit unions. However, the aggregate of the unpaid3 balances of all notes of liquidating credit unions purchased by any4 one (1) credit union shall not exceed ten percent (10%) of the5 purchasing credit union's capital and surplus unless special6 written authorization has been granted by the department.7 (17) To exercise such incidental powers necessary or requisite to8 enable it to carry on effectively the business for which it is9 incorporated.

10 (18) To act as a custodian or trustee of any trust created or11 organized in the United States and forming part of a tax12 advantaged savings plan which qualifies or qualified for specific13 tax treatment under Section 223, 401(d), 408, 408A, or 530 of the14 Internal Revenue Code, if the funds of the trust are invested only15 in share accounts or insured certificates of the credit union.16 (19) To issue shares or insured certificates to a trustee or17 custodian of a pension plan, profit sharing plan, or stock bonus18 plan which qualifies for specific tax treatment under Sections19 401(d) or 408(a) of the Internal Revenue Code.20 (20) To exercise any rights and privileges that are:21 (A) granted to federal credit unions; but22 (B) not authorized for credit unions under the Indiana Code23 (except for this section) or any rule adopted under the Indiana24 Code;25 if the credit union complies with section 9.2 of this chapter.26 (21) To sell, pledge, or discount any of its assets. However, a27 credit union may not pledge any of its assets as security for the28 safekeeping and prompt payment of any money deposited, except29 that a credit union may, for the safekeeping and prompt payment30 of money deposited, give security as authorized by federal law.31 (22) To purchase assets of another credit union a corporation (as32 defined in IC 28-1-8-0.5) and to assume the liabilities of the33 selling credit union. corporation, or to sell, lease, exchange, or34 otherwise dispose of all or substantially all of the credit35 union's property and assets to a corporation, if:36 (A) the credit union complies with IC 28-1-8; and37 (B) the transaction is authorized in accordance with38 IC 28-1-8-4.39 (23) To act as a fiscal agent of the United States and to receive40 deposits from nonmember units of the federal, state, or county41 governments, from political subdivisions, and from other credit42 unions upon which the credit union may pay varying interest rates

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1 at varying maturities subject to terms, rates, and conditions that2 are established by the board of directors. However, the total3 amount of public funds received from units of state and county4 governments and political subdivisions that a credit union may5 have on deposit may not exceed twenty percent (20%) of the total6 assets of that credit union, excluding those public funds.7 (24) To join the National Credit Union Administration Central8 Liquidity Facility.9 (25) To participate in community investment initiatives under the

10 administration of organizations:11 (A) exempt from taxation under Section 501(c)(3) of the12 Internal Revenue Code; and13 (B) located or conducting activities in communities in which14 the credit union does business.15 Participation may be in the form of either charitable contributions16 or participation loans. In either case, disbursement of funds17 through the administering organization is not required to be18 limited to members of the credit union. Total contributions or19 participation loans may not exceed one-tenth of one percent20 (0.1%) of total assets of the credit union. A recipient of a21 contribution or loan is not considered qualified for credit union22 membership. A contribution or participation loan made under this23 subdivision must be approved by the board of directors.24 (26) To establish and operate an automated teller machine25 (ATM):26 (A) at any location within Indiana; or27 (B) as permitted by the laws of the state in which the28 automated teller machine is to be located.29 (27) To demand and receive, for the faithful performance and30 discharge of services performed under the powers vested in the31 credit union by this article:32 (A) reasonable compensation, or compensation as fixed by33 agreement of the parties;34 (B) all advances necessarily paid out and expended in the35 discharge and performance of its duties; and36 (C) unless otherwise agreed upon, interest at the legal rate on37 the advances referred to in clause (B).38 (28) Subject to any restrictions the department may impose, to39 become the owner or lessor of personal property acquired upon40 the request and for the use of a member and to incur additional41 obligations as may be incident to becoming an owner or lessor of42 such property.

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1 (b) A credit union shall maintain files containing credit and other2 information adequate to demonstrate evidence of prudent business3 judgment in exercising the investment powers granted under this4 chapter or by rule, order, or declaratory ruling of the department.5 (c) Subject to any limitations or restrictions that the department or6 a federal regulator may impose by regulation, rule, policy, or guidance,7 a credit union may purchase and hold life insurance as follows:8 (1) Life insurance purchased or held in connection with employee9 compensation or benefit plans approved by the credit union's

10 board of directors.11 (2) Life insurance purchased or held to recover the cost of12 providing preretirement or postretirement employee benefits13 approved by the credit union's board of directors.14 (3) Life insurance on the lives of borrowers.15 (4) Life insurance held as security for a loan.16 (5) Life insurance that a federal credit union may purchase or17 hold under 12 CFR 701.19(c).18 SECTION 35. IC 28-7-1-17, AS AMENDED BY P.L.186-2015,19 SECTION 36, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE20 JULY 1, 2017]: Sec. 17. (a) Every loan application shall be submitted21 on a form approved by the board of directors. Loans may be dispersed22 upon written approval by a majority of the credit committee or a loan23 officer. If the credit committee or loan officer fails to approve an24 application for a loan, the applicant may appeal to the board of25 directors, if such appeal is authorized by the bylaws.26 (b) Loans to members may be made only under the following terms27 and conditions:28 (1) All loans shall be evidenced by notes signed by the borrowing29 member.30 (2) Except as otherwise provided in this section, the terms of any31 loan to a member with a maturity of more than six (6) months32 shall provide for principal and interest payments that will33 amortize the obligation in full within the terms of the loan34 contract. If the income of the borrowing member is seasonal, the35 terms of the loan contract may provide for seasonal amortization.36 (3) Loans may be made upon the security of improved or37 unimproved real estate. Except as otherwise specified in this38 section, such loans must be secured by a first lien upon real estate39 prior to all other liens, except for taxes and assessments not40 delinquent, and may be made with repayment terms other than as41 provided in subdivision (2). The credit union loan folder for all42 real estate mortgage loans shall include the following:

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1 (A) The loan application.2 (B) The mortgage instrument.3 (C) The note.4 (D) The disclosure statement.5 (E) The documentation of property insurance.6 (F) For the real estate for which the loan is made, a written7 appraisal, which must be performed by a state licensed or8 certified appraiser designated by the board of directors if the9 amount of the loan is at least two hundred fifty thousand

10 dollars ($250,000).11 (4) Loans made upon security of real estate are subject to the12 following restrictions:13 (A) Real estate loans in which no principal amortization is14 required shall provide for the payment of interest at least15 annually and shall mature within five (5) years of the date of16 the loan unless extended and shall not exceed fifty percent17 (50%) of the fair cash value of the real estate used as security.18 (B) Real estate loans on improved real estate, except for19 variable rate mortgage loans and rollover mortgage loans20 provided for in subdivision (5), shall require substantially21 equal payments at successive intervals of not more than one22 (1) year, shall mature within thirty (30) years, and shall not23 exceed one hundred percent (100%) of the fair cash value of24 the real estate used as security.25 (C) Real estate loans on unimproved real estate may be made.26 The terms of the loan shall:27 (i) require substantially equal payments of interest and28 principal at successive intervals of one (1) year or less;29 (ii) mature within ten (10) years; and30 (iii) not exceed eighty-five percent (85%) of the fair cash31 value of the real estate used as security.32 (D) (C) Loans primarily secured by a mortgage which33 constitutes a second lien on improved real estate may be made34 only if the aggregate amount of all loans on the real estate does35 not exceed one hundred percent (100%) of the fair cash value36 of the real estate after such loan is made. Repayment terms37 shall be in accordance with subdivision (2).38 (E) (D) Real estate loans may be made for the construction of39 improvements to real property. Funds borrowed may be40 advanced as work on the improvements progresses.41 Repayment terms must comply with subdivision (2).42 (5) Subject to the limitations of subdivision (3), variable rate

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1 mortgage loans and rollover mortgage loans may be made under2 the same limitations and rights provided state chartered savings3 associations under IC 28-1-21.5 (before its repeal) or IC 28-15 or4 federal credit unions.5 (6) As used in this subdivision, "originating lender" means the6 participating lender with which the member contracts. A credit7 union may participate with other state and federal depository8 financial institutions (as defined in IC 28-1-1-6) or credit union9 service organizations in making loans to credit union members

10 and may sell a participating interest in any of its loans under11 written participation loan policies established by the board of12 directors. However, the credit union may not sell more than ninety13 percent (90%) of the principal of participating loans outstanding14 at the time of sale. A participating credit union that is not the15 originating lender may participate only in loans made to the credit16 union's own members or to members of another participating state17 or federal credit union. A master participation agreement must be18 properly executed. The agreement must include provisions for19 identifying, either through documents incorporated by reference20 or directly in the agreement, the participation loan or loans before21 the sale of the loans.22 (7) Notwithstanding subdivisions (1) through (6), a credit union23 may make any of the following:24 (A) Any loan that may be made by a federal credit union.25 However, IC 24-4.5 applies to any loan that is:26 (i) made under this clause; and27 (ii) within the scope of IC 24-4.5.28 Any provision of federal law that is in conflict with IC 24-4.529 does not apply to a loan made under this clause.30 (B) Subject to subdivision (3), any alternative mortgage loan31 (as defined in IC 28-15-11-2) that may be made by a savings32 association (as defined in IC 28-15-1-11) under IC 28-15-11.33 A loan made under this clause by a credit union is subject to34 the same terms, conditions, exceptions, and limitations that35 apply to an alternative mortgage loan made by a savings36 association under IC 28-15-11.37 (8) A credit union may make a loan under either:38 (A) subdivisions (2) through (6); or39 (B) subdivision (7);40 but not both. A credit union shall make an initial determination as41 to whether to make a loan under subdivisions (2) through (6) or42 under subdivision (7). If the credit union determines that a loan or

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1 category of loans is to be made under subdivision (7), the written2 loan policies of the credit union must include that determination.3 A credit union may not combine the terms and conditions that4 apply to a loan made under subdivisions (2) through (6) with the5 terms and conditions that apply to a loan made under subdivision6 (7) to make a loan not expressly described and authorized either7 under subdivisions (2) through (6) or under subdivision (7).8 (c) Nothing in this section prevents any credit union from taking an9 indemnifying or second mortgage on real estate as additional security.

10 SECTION 36. IC 28-7-1-39, AS AMENDED BY P.L.27-2012,11 SECTION 94, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE12 JULY 1, 2017]: Sec. 39. (a) As used in this section, "loans and13 extensions of credit" includes all direct or indirect advances of funds14 made to a member on the basis of:15 (1) an obligation of the member to repay the funds; or16 (2) a pledge of specific property by or on behalf of the member17 and from which the funds advanced are repayable.18 The term includes any contractual liability of a credit union to advance19 funds to or on behalf of a member, to the extent specified by the20 department. The term also includes any credit exposure to a person21 arising from a derivative transaction (as defined in 12 U.S.C. 84(b)(3))22 between the credit union and the person.23 (b) As used in this section, "member" includes an individual, a sole24 proprietorship, a partnership, a joint venture, an association, a trust, an25 estate, a business trust, a limited liability company, a corporation, a26 sovereign government, or an agency, instrumentality, or political27 subdivision of a sovereign government, or any similar entity or28 organization.29 (c) Except as provided in subsection (e), the total loans and30 extensions of credit by a credit union to a member outstanding at any31 given time and not fully secured, as determined in a manner consistent32 with subsection (d), by collateral with a market value at least equal to33 the amount of the loan or extension of credit may not exceed fifteen34 percent (15%) of the capital and surplus of the credit union.35 (d) Except as provided in subsection (e), the total loans and36 extensions of credit by a credit union to a member outstanding at any37 given time and fully secured by readily marketable collateral having a38 market value, as determined by reliable and continuously available39 price quotations, at least equal to the amount of funds outstanding may40 not exceed ten percent (10%) of the capital and surplus of the credit41 union. The limitation in this subsection is separate from and in addition42 to the limitation set forth in subsection (c).

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1 (e) The limitations set forth in subsections (c) and (d) are subject to2 the following exceptions:3 (1) Loans or extensions of credit arising from the discount of4 commercial or business paper evidencing an obligation to the5 member negotiating it with recourse are not subject to any6 limitation based on capital and surplus.7 (2) The purchase of bankers' acceptances of the kind described in8 12 U.S.C. 372 and issued by a financial institution organized or9 reorganized under the laws of Indiana or any other state or the

10 United States are not subject to any limitation based on capital11 and surplus.12 (3) Loans or extensions of credit secured by bills of lading,13 warehouse receipts, or similar documents transferring or securing14 title to readily marketable staples are subject to a limitation of15 thirty-five percent (35%) of capital and surplus in addition to the16 general limitations if the market value of the staples securing each17 additional loan or extension of credit at all times equals or18 exceeds one hundred fifteen percent (115%) of the outstanding19 amount of the loan or extension of credit. The staples shall be20 fully covered by insurance whenever it is customary to insure21 such staples.22 (4) Loans or extensions of credit secured by bonds, notes,23 certificates of indebtedness, or Treasury bills of the United States24 or by any other obligation fully guaranteed as to principal and25 interest by the United States are not subject to any limitation26 based on capital and surplus.27 (5) Loans or extensions of credit to or secured by unconditional28 takeout commitment or guarantees of any department, agency,29 bureau, board, commission, or establishment of the United States30 or any corporation wholly owned directly or indirectly by the31 United States are not subject to any limitation based on capital32 and surplus.33 (6) Loans or extensions of credit secured by a segregated deposit34 account in the lending credit union are not subject to any35 limitation based on capital and surplus.36 (7) Loans or extensions of credit to any credit union, when the37 loans or extensions of credit are approved by the director of the38 department, are not subject to any limitation based on capital and39 surplus.40 (f) Loans or extensions of credit arising from the discount of41 negotiable or nonnegotiable installment consumer paper that carries a42 full recourse endorsement or unconditional guarantee by the member

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1 transferring the paper are subject under this section to a maximum2 limitation equal to twenty-five percent (25%) of the capital and surplus,3 notwithstanding the collateral requirements set forth in subsection (d).4 (g) If the credit union's files or the knowledge of the credit union's5 officers of the financial condition of each maker of consumer paper6 described in subsection (f) is reasonably adequate, and an officer of the7 credit union designated for that purpose by the board of directors of the8 credit union certifies in writing that the credit union is relying primarily9 upon the responsibility of each maker for payment of the loans or

10 extensions of credit and not upon any full or partial recourse11 endorsement or guarantee by the transferor, the limitations of this12 section as to the loans or extensions of credit of each maker shall be the13 sole applicable loan limitations.14 (h) Loans or extensions of credit secured by shipping documents or15 instruments transferring or securing title covering livestock or giving16 a lien on livestock when the market value of the livestock securing the17 obligation is not at any time less than one hundred fifteen percent18 (115%) of the face amount of the note covered are subject under this19 section, notwithstanding the collateral requirements set forth in20 subsection (d), to a maximum limitation equal to twenty-five percent21 (25%) of the capital and surplus.22 (i) Loans or extensions of credit that arise from the discount by23 dealers in dairy cattle of paper given in payment for dairy cattle, which24 paper carries a full recourse endorsement or unconditional guarantee25 of the seller and that are secured by the cattle being sold, are subject26 under this section, notwithstanding the collateral requirements set forth27 in subsection (d), to a limitation of twenty-five percent (25%) of the28 capital and surplus.29 (j) Except as otherwise provided, an officer, director, employee, or30 attorney of a credit union who stipulates for, receives, or consents or31 agrees to receive, any fee, commission, gift, or thing of value, from any32 person, for the purpose of procuring or endeavoring to procure for any33 member any loan from or the purchase or discount of any paper, note,34 draft, check, or bill of exchange by the credit union, commits a Class35 A misdemeanor. However, the prohibitions set forth in this36 subsection do not apply to a credit union's:37 (1) bona fide employment agreements, including benefit or38 compensation plans; or39 (2) compensation agreements with third party independent40 contractors.41 (k) Except as otherwise provided in this chapter, any credit union42 that holds obligations of indebtedness in violation of the limitations

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1 prescribed in this section shall, not later than July 1, 2006, cause the2 amount of the obligations to conform to the limitations prescribed by3 this chapter and by the provisions of this section. The department may,4 in its discretion, extend the time for effecting this conformity, in5 individual instances, if the interests of the depositors will be protected6 and served by an extension. Upon the failure of a credit union to7 comply with the limitations, in accordance with this section or in8 accordance with any order of the department concerning the9 limitations, the department may declare that the credit union is

10 conducting its business in an unauthorized or unsafe manner and11 proceed in accordance with IC 28-1-3.1-2.12 (l) The department may apply the provisions of 12 CFR 32 in the13 application and administration of this chapter.14 SECTION 37. IC 28-7-5-4, AS AMENDED BY P.L.137-2014,15 SECTION 30, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE16 JULY 1, 2017]: Sec. 4. (a) Application for a pawnbroker's license shall17 be submitted on a form prescribed by the director and must include all18 information required by the director. An application submitted under19 this section must identify the location or locations at which the20 applicant proposes to engage in business as a pawnbroker in Indiana.21 If any business, other than the business of acting as a pawnbroker under22 this chapter, will be conducted by the applicant or another person at23 any location identified under this subsection, the applicant shall24 indicate for each location at which another business will be conducted:25 (1) the nature of the other business;26 (2) the name under which the other business operates;27 (3) the address of the principal office of the other business;28 (4) the name and address of the business's resident agent in29 Indiana; and30 (5) any other information the director may require.31 (b) An application submitted under this section must indicate32 whether any individual described in section 8(a)(2) or 8(a)(3) of this33 chapter at the time of the application:34 (1) is under indictment for a felony under the laws of Indiana or35 any other jurisdiction; or36 (2) has been convicted of a felony under the laws of Indiana or37 any other jurisdiction.38 (c) The director may request that the applicant provide evidence of39 compliance with this section at:40 (1) the time of application;41 (2) the time of renewal of a license; or42 (3) any other time considered necessary by the director.

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1 (d) For purposes of subsection (c), evidence of compliance with this2 section may include:3 (1) criminal background checks, including a national criminal4 history background check (as defined in IC 10-13-3-12) by the5 Federal Bureau of Investigation for any individual described in6 subsection (b);7 (2) credit histories; and8 (3) other background checks considered necessary by the director.9 If the director requests a national criminal history background check

10 under subdivision (1) for an individual described in that subdivision,11 the director shall require the individual to submit fingerprints to the12 department or to the state police department, as appropriate, at the time13 evidence of compliance is requested under subsection (c). The14 individual to whom the request is made shall pay any fees or costs15 associated with the fingerprints and the national criminal history16 background check. The national criminal history background check17 may be used by the director to determine the individual's compliance18 with this section. The director or the department may not release the19 results of the national criminal history background check to any private20 entity.21 SECTION 38. IC 28-7-5-10.4 IS ADDED TO THE INDIANA22 CODE AS A NEW SECTION TO READ AS FOLLOWS23 [EFFECTIVE JULY 1, 2017]: Sec. 10.4. A licensee may carry on24 other business at a location where the licensee conducts the25 business of acting as a pawnbroker unless the licensee carries on26 other business for the purpose of evasion or violation of this27 chapter.28 SECTION 39. IC 28-7-5-10.5 IS REPEALED [EFFECTIVE JULY29 1, 2017]. Sec. 10.5. (a) This section applies if, after a person has been30 issued a license or renewal license under this chapter, any of the31 following apply:32 (1) Any business, other than the business of acting as a33 pawnbroker under this chapter, will be conducted by the licensee34 or another person at any location in Indiana in which the licensee35 conducts the business of acting as a pawnbroker under this36 chapter.37 (2) Any information concerning other business conducted at the38 locations identified in the licensee's application under section 4(a)39 of this chapter changes.40 (b) For each location described in subsection (a)(1) or (a)(2), the41 licensee shall provide to the department the information required under42 section 4(a) of this chapter with respect to that location:

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1 (1) not later than fifteen (15) days after the other business begins2 operating at the location; or3 (2) if the licensee's next license renewal fee under section 11 of4 this chapter is due before the date described in subdivision (1),5 along with the licensee's next license renewal fee under section 116 of this chapter.7 SECTION 40. IC 28-7-5-21, AS AMENDED BY P.L.217-2007,8 SECTION 71, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE9 JULY 1, 2017]: Sec. 21. (a) The pawnbroker shall, at the time of

10 making a loan, deliver to the pledger or the pledger's agent a11 memorandum or ticket on which shall be legibly written or printed the12 following information:13 (1) The name of the pledger.14 (2) The name of the pawnbroker and the place where the pledge15 is made.16 (3) The article or articles pledged, and a description of the17 articles. However, if multiple articles of a similar nature that do18 not contain an identification or serial number (such as precious19 metals, gemstones, musical recordings, video recordings, books,20 or hand tools) are delivered together in one (1) transaction, the21 description of the articles is adequate if the description contains22 the quantity of the articles delivered and a physical description of23 the type of articles delivered, including any other unique24 identifying marks, numbers, names, letters, or special features.25 (4) The amount of the loan.26 (5) The date of the transaction.27 (6) The serial number of the loan.28 (7) The sum of the interest as provided in section 28 of this29 chapter and the charge as provided in section 28.5 of this chapter30 stated as an annual percentage rate computed in accordance with31 regulations issued by the Federal Reserve Board under the32 Federal Consumer Credit Protection Act (as defined in33 IC 24-4.5-1-302) and with regulations adopted under that act.34 (8) The amount of interest.35 (9) The amount of charge and principal due at maturity.36 (10) A copy of sections 28, 28.5, and 30 of this chapter.37 (11) The date of birth of the pledger.38 (12) The type of government issued identification used to verify39 the identity of the pledger, together with the name of the40 governmental agency that issued the identification, and the41 identification number present on the government issued42 identification.

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1 (13) The last date on which the pledged article or articles may be2 redeemed before the article or articles may be sold if the loan is3 not redeemed, renewed, or extended. The language setting forth4 the information described in this subdivision must be in 14 point5 boldface type.6 (14) A statement that:7 (A) notifies the pledger that the pawnbroking transaction is8 regulated by the department; and9 (B) includes a toll free telephone number for the department.

10 (b) A pawnbroker may insert in such ticket any other terms and11 conditions not inconsistent with this chapter. However, nothing12 appearing on a pawn ticket shall relieve the pawnbroker of the13 obligations to exercise reasonable care in the safekeeping of articles14 pledged with the pawnbroker.15 SECTION 41. IC 28-7-5-21.5 IS AMENDED TO READ AS16 FOLLOWS [EFFECTIVE JULY 1, 2017]: Sec. 21.5. A pawnbroker is17 required to disclose to a debtor in a pawn transaction the information18 required by the Federal Reserve Board under the Federal Consumer19 Credit Protection Act (15 U.S.C. 1601 et seq.) and its implementing by20 regulations adopted under that act.21 SECTION 42. IC 28-7-5-24 IS AMENDED TO READ AS22 FOLLOWS [EFFECTIVE JULY 1, 2017]: Sec. 24. Upon the23 pledger's:24 (1) presentation of the pawn ticket prior to before maturity and of25 the underlying loan;26 (2) payment of accrued interest and any authorized additional27 charge; and the28 (3) tender of not less than one dollar ($1.00) ($1) of the principal29 balance;30 the pawnbroker shall accept the same, items set forth in subdivisions31 (1) through (3), showing due credit of principal payment on the pawn32 ticket, together with the amount of unpaid principal balance, or issue33 a new ticket for the reduced amount. Future interest charges and any34 authorized additional charge shall be computed on the unpaid35 principal balance.36 SECTION 43. IC 28-8-4-20.5, AS ADDED BY P.L.216-2013,37 SECTION 47, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE38 JULY 1, 2017]: Sec. 20.5. (a) As used in this section, "Nationwide39 Multistate Licensing System and Registry" (or "Nationwide40 Mortgage Licensing System and Registry" or "NMLSR") means a41 mortgage multistate licensing system developed and maintained by the42 Conference of State Bank Supervisors and the American Association

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1 of Residential Mortgage Regulators owned and operated by the State2 Regulatory Registry, LLC, or by any successor or affiliated entity,3 for the licensing and registration of creditors, mortgage loan4 originators, and other financial services entities and their employees5 and agents. The term includes any other name or acronym that may6 be assigned to the system by the State Regulatory Registry, LLC,7 or by any successor or affiliated entity.8 (b) Subject to subsection (g), the director may designate the9 NMLSR to serve as the sole entity responsible for:

10 (1) processing applications and renewals for licenses under this11 chapter;12 (2) issuing unique identifiers for licensees and entities exempt13 from licensing under this chapter; and14 (3) performing other services that the director determines are15 necessary for the orderly administration of the department's16 licensing system under this chapter.17 (c) Subject to the confidentiality provisions contained in IC 5-14-3,18 this section, and section 47 of this chapter, the director shall regularly19 report significant or recurring violations of this chapter to the NMLSR.20 (d) Subject to the confidentiality provisions contained in IC 5-14-3,21 this section, and section 47 of this chapter, the director may report22 complaints received regarding licensees under this chapter to the23 NMLSR.24 (e) The director may report publicly adjudicated licensure actions25 against a licensee to the NMLSR.26 (f) The director shall establish a process by which licensees may27 challenge information reported to the NMLSR by the department.28 (g) The director's authority to designate the NMLSR under29 subsection (b) is subject to the following:30 (1) Information stored in the NMLSR is subject to the31 confidentiality provisions of IC 5-14-3 and section 47 of this32 chapter. A person may not:33 (A) obtain information from the NMLSR, unless the person is34 authorized to do so by statute;35 (B) initiate any civil action based on information obtained36 from the NMLSR if the information is not otherwise available37 to the person under any other state law; or38 (C) initiate any civil action based on information obtained39 from the NMLSR if the person could not have initiated the40 action based on information otherwise available to the person41 under any other state law.42 (2) Documents, materials, and other forms of information in the

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1 control or possession of the NMLSR that are confidential under2 section 47 of this chapter and that are:3 (A) furnished by the director, the director's designee, or a4 licensee; or5 (B) otherwise obtained by the NMLSR;6 are confidential and privileged by law and are not subject to7 inspection under IC 5-14-3, subject to subpoena, subject to8 discovery, or admissible in evidence in any civil action. However,9 the director may use the documents, materials, or other

10 information available to the director in furtherance of any action11 brought in connection with the director's duties under this chapter.12 (3) Disclosure of documents, materials, and information:13 (A) to the director; or14 (B) by the director;15 under this subsection does not result in a waiver of any applicable16 privilege or claim of confidentiality with respect to the17 documents, materials, or information.18 (4) Information provided to the NMLSR is subject to IC 4-1-11.19 (5) This subsection does not limit or impair a person's right to:20 (A) obtain information;21 (B) use information as evidence in a civil action or22 proceeding; or23 (C) use information to initiate a civil action or proceeding;24 if the information may be obtained from the director or the25 director's designee under any law.26 (6) The requirements under any federal law or IC 5-14-327 regarding the privacy or confidentiality of any information or28 material provided to the NMLSR, and any privilege arising under29 federal or state law, including the rules of any federal or state30 court, with respect to the information or material, continue to31 apply to the information or material after the information or32 material has been disclosed to the NMLSR. The information and33 material may be shared with all state and federal regulatory34 officials with financial services industry oversight authority35 without the loss of privilege or the loss of confidentiality36 protections provided by federal law or IC 5-14-3.37 (7) For purposes of this section, the director may enter agreements38 or sharing arrangements with other governmental agencies, the39 Conference of State Bank Supervisors, the Money Transmitters40 Regulators Association, or other associations representing41 governmental agencies, as established by rule or order of the42 director.

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1 (8) Information or material that is subject to a privilege or2 confidentiality under subdivision (6) is not subject to:3 (A) disclosure under any federal or state law governing the4 disclosure to the public of information held by an officer or an5 agency of the federal government or the respective state; or6 (B) subpoena, discovery, or admission into evidence in any7 private civil action or administrative process, unless with8 respect to any privilege held by the NMLSR with respect to9 the information or material, the person to whom the

10 information or material pertains waives, in whole or in part, in11 the discretion of the person, that privilege.12 (9) Any provision of IC 5-14-3 that concerns the disclosure of:13 (A) confidential supervisory information; or14 (B) any information or material described in subdivision (6);15 and that is inconsistent with subdivision (6) is superseded by this16 section.17 (10) This section does not apply with respect to information or18 material that concerns the employment history of, and publicly19 adjudicated disciplinary and enforcement actions against, a20 person described in section 35(b)(2) or 35(b)(3) of this chapter21 and that is included in the NMLSR for access by the public.22 (11) The director may require a licensee required to submit23 information to the NMLSR to pay a processing fee considered24 reasonable by the director. In determining whether the NMLSR25 processing fee is reasonable, the director shall:26 (A) require review of; and27 (B) make available;28 the audited financial statements of the NMLSR.29 (12) Notwithstanding any other provision of law, any:30 (A) application, renewal, or other form or document that:31 (i) relates to licenses issued under this chapter; and32 (ii) is made or produced in an electronic format;33 (B) document filed as an electronic record in a multistate34 automated repository established and operated for the35 licensing or registration of financial services entities and their36 employees; or37 (C) electronic record filed through the NMLSR;38 is considered a valid original document when reproduced in paper39 form by the department.40 SECTION 44. IC 28-8-4-24, AS AMENDED BY P.L.216-2013,41 SECTION 49, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE42 JULY 1, 2017]: Sec. 24. An application for licensure under this chapter

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1 must contain the following:2 (1) The name of the applicant.3 (2) The applicant's principal address.4 (3) A fictitious or trade name, if any, used by the applicant in the5 conduct of its business.6 (4) The location of the applicant's business records.7 (5) The history of the applicant's:8 (A) material litigation; and9 (B) criminal convictions for felonies involving fraud, deceit,

10 or misrepresentation under the laws of Indiana or any other11 jurisdiction.12 (6) A description of:13 (A) the activities conducted by the applicant;14 (B) the applicant's history of operations; and15 (C) the business activities in which the applicant seeks to be16 engaged in Indiana.17 (7) A list identifying the applicant's proposed authorized delegates18 in Indiana.19 (8) A sample authorized delegate contract, if applicable.20 (9) A sample form of payment instrument, if applicable.21 (10) The location or locations at which the applicant and its22 authorized delegates propose to conduct the licensed activities in23 Indiana. If any business, other than the business of money24 transmission under this chapter, will be conducted by the25 applicant or another person at any location identified under this26 subdivision, the applicant shall indicate for each location at which27 another business will be conducted:28 (A) the nature of the other business;29 (B) the name under which the other business operates;30 (C) the address of the principal office of the other business;31 (D) the name and address of the business's resident agent in32 Indiana; and33 (E) any other information that the director may require.34 However, the applicant is not required to submit the information35 required by this subdivision if the location at which the other36 business will be conducted is the place of business of an37 authorized delegate that is not under common control with the38 applicant.39 (11) The name and address of the clearing bank or banks on40 which the applicant's payment instruments will be drawn or41 through which such payment instruments will be payable.42 (12) Documents revealing that the applicant has a net worth of at

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1 least six hundred thousand dollars ($600,000), calculated in2 accordance with generally accepted accounting principles.3 SECTION 45. IC 28-8-4-38, AS AMENDED BY P.L.186-2015,4 SECTION 44, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE5 JULY 1, 2017]: Sec. 38. A licensee may renew a license by complying6 with the following:7 (1) Filing with the director or the director's designee the annual8 renewal in the form that is prescribed by the director and sent by9 the director to each licensee not later than December 31 of each

10 year. The renewal must include the following, which, except for11 the financial statements described in clause (A), must be filed not12 later than December 31:13 (A) Either:14 (i) a copy of the licensee's most recent audited consolidated15 annual financial statements, including a balance sheet, a16 statement of income or loss, a statement of changes in17 shareholder equity, and a statement of changes in financial18 position; or19 (ii) if the licensee is a wholly owned subsidiary, the parent20 corporation's or parent organization's most recent21 consolidated audited annual financial statements or the22 parent corporation's or parent organization's most recent23 Form 10K report filed with the Securities and Exchange24 Commission, along with the licensee's unaudited annual25 financial statements.26 The audited financial statements required to be submitted27 under this clause must be prepared by an independent certified28 public accountant authorized to do business in the United29 States in accordance with AICPA Statements on Standards for30 Accounting and Review Services (SSARS) and must be filed31 with the director or the director's designee not later than one32 hundred twenty (120) days after the close of the calendar or33 fiscal year covered by the statements.34 (B) The number of payment instruments sold by the licensee35 in Indiana, the dollar amount of those instruments, and the36 dollar amount of outstanding payment instruments sold by the37 licensee calculated from the most recent quarter for which data38 is available before the date of the filing of the renewal39 application, but in no event more than one hundred twenty40 (120) days before the renewal date.41 (C) Material changes to the information submitted by the42 licensee on its original application or as part of a renewal that

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1 have not been reported previously to the director on any other2 report or renewal required to be filed under this chapter.3 (D) A list of the licensee's permissible investments.4 (E) A list of the locations within Indiana at which business5 regulated by this chapter will be conducted by either the6 licensee or its authorized delegate. including information7 concerning any business, other than the business of money8 transmission under this chapter, that will be conducted at each9 identified location, as required under section 24(10) of this

10 chapter.11 (2) Paying the annual renewal fee described under section 37 of12 this chapter.13 SECTION 46. IC 28-8-4-40.4 IS ADDED TO THE INDIANA14 CODE AS A NEW SECTION TO READ AS FOLLOWS15 [EFFECTIVE JULY 1, 2017]: Sec. 40.4. A licensee may carry on16 other business at a location where the licensee conducts the17 business of money transmission unless the licensee carries on other18 business for the purpose of evasion or violation of this chapter.19 SECTION 47. IC 28-8-4-40.5 IS REPEALED [EFFECTIVE JULY20 1, 2017]. Sec. 40.5. (a) This section applies if, after a person has been21 issued a license or renewal license under this chapter, any of the22 following apply:23 (1) Any business, other than the business of money transmission24 under this chapter, will be conducted by the licensee or another25 person, other than an authorized delegate that is not under26 common control with the applicant, at any location in Indiana in27 which the licensee conducts the business of money transmission28 under this chapter.29 (2) Any information concerning other business conducted at the30 locations identified in the licensee's application under section31 24(10) of this chapter changes.32 (b) For each location described in subsection (a)(1) or (a)(2), the33 licensee shall provide to the department the information required under34 section 24(10) of this chapter with respect to that location:35 (1) not later than fifteen (15) days after the other business begins36 operating at the location; or37 (2) if the licensee's next application for a renewal license under38 section 38 of this chapter is due before the date described in39 subdivision (1), in the licensee's next application for a renewal40 license under section 38 of this chapter.41 SECTION 48. IC 28-8-5-11, AS AMENDED BY P.L.137-2014,42 SECTION 34, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE

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1 JULY 1, 2017]: Sec. 11. (a) A person shall not engage in the business2 of cashing checks for consideration without first obtaining a license.3 (b) Each application for a license shall be in writing in such form as4 the director may prescribe and shall include all of the following:5 (1) The following information pertaining to the applicant:6 (A) Name.7 (B) Residence address.8 (C) Business address.9 (2) The following information pertaining to any individual

10 described in section 12(b)(1) of this chapter:11 (A) Name.12 (B) Residence address.13 (C) Business address.14 (D) Whether the person:15 (i) is, at the time of the application, under indictment for a16 felony under the laws of Indiana or any other jurisdiction; or17 (ii) has been convicted of a felony under the laws of Indiana18 or any other jurisdiction.19 (3) The address where the applicant's office or offices will be20 located. If any business, other than the business of cashing checks21 under this chapter, will be conducted by the applicant or another22 person at any of the locations identified under this subdivision,23 the applicant shall indicate for each location at which another24 business will be conducted:25 (A) the nature of the other business;26 (B) the name under which the other business operates;27 (C) the address of the principal office of the other business;28 (D) the name and address of the business's resident agent in29 Indiana; and30 (E) any other information that the director may require.31 (4) If the department of state revenue notifies the department that32 a person is on the most recent tax warrant list, the department33 shall not issue or renew the person's license until:34 (A) the person provides to the department a statement from the35 department of state revenue that the person's tax warrant has36 been satisfied; or37 (B) the department receives a notice from the commissioner of38 the department of state revenue under IC 6-8.1-8-2(k).39 (5) Such other data, financial statements, and pertinent40 information as the director may require.41 (c) The application shall be filed with a nonrefundable fee fixed by42 the department under IC 28-11-3-5.

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1 SECTION 49. IC 28-8-5-18.2 IS ADDED TO THE INDIANA2 CODE AS A NEW SECTION TO READ AS FOLLOWS3 [EFFECTIVE JULY 1, 2017]: Sec. 18.2. A licensee may carry on4 other business at a location where the licensee conducts the5 business of cashing checks unless the licensee carries on other6 business for the purpose of evasion or violation of this chapter.7 SECTION 50. IC 28-8-5-18.3 IS REPEALED [EFFECTIVE JULY8 1, 2017]. Sec. 18.3. (a) This section applies if, after a person has been9 issued a license or renewal license under this chapter, any of the

10 following apply:11 (1) Any business, other than the business of cashing checks under12 this chapter, will be conducted by the licensee or another person13 at any location in Indiana in which the licensee conducts the14 business of cashing checks under this chapter.15 (2) Any information concerning other business conducted at the16 locations identified in the licensee's application under section17 11(b)(3) of this chapter changes.18 (b) For each location described in subsection (a)(1) or (a)(2), the19 licensee shall provide to the department the information required under20 section 11(b)(3) of this chapter with respect to that location:21 (1) not later than fifteen (15) days after the other business begins22 operating at the location; or23 (2) if the licensee's next application for a renewal license under24 section 15 of this chapter is due before the date described in25 subdivision (1), in the licensee's next application for a renewal26 license under section 15 of this chapter.27 SECTION 51. IC 28-10-1-1, AS AMENDED BY P.L.73-2016,28 SECTION 28, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE29 JULY 1, 2017]: Sec. 1. A reference to a federal law or federal30 regulation in this title is a reference to the law or regulation as in effect31 December 31, 2015. 2016.32 SECTION 52. IC 28-11-1-3, AS AMENDED BY P.L.217-2007,33 SECTION 90, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE34 JULY 1, 2017]: Sec. 3. (a) The ultimate authority for and the powers,35 duties, management, and control of the department are vested in the36 following seven (7) members:37 (1) The director of the department, who serves as an ex officio,38 voting member.39 (2) The following six (6) members appointed by the governor as40 follows:41 (A) Three (3) members must have practical experience at the42 executive level of a:

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1 (i) state chartered bank;2 (ii) state chartered savings association; or3 (iii) state chartered savings bank.4 (B) One (1) member must have practical experience at the5 executive level as a:6 (i) lender licensed under IC 24-4.5;7 (ii) mortgage lender licensed under IC 24-4.4;8 (iii) registrant under IC 24-7;9 (iv) licensee under IC 28-1-29;

10 (v) licensee under IC 28-7-5;11 (vi) licensee under IC 28-8-4; or12 (vii) licensee under IC 28-8-5.13 (C) One (1) member must have practical experience at the14 executive level of a state chartered credit union.15 (D) One (1) member must be appointed with due regard for the16 consumer, agricultural, industrial, and commercial interests of17 Indiana.18 (b) Not more than three (3) members appointed by the governor19 under subsection (a)(2) after June 30, 2006, may be affiliated with the20 same political party.21 SECTION 53. IC 28-11-3-1, AS AMENDED BY P.L.35-2010,22 SECTION 196, IS AMENDED TO READ AS FOLLOWS23 [EFFECTIVE JULY 1, 2017]: Sec. 1. (a) The department shall examine24 the affairs of every financial institution as often as the department25 considers necessary. Examinations may be made without notice to the26 institution to be examined.27 (b) In making an examination, the department may examine any of28 the officers or agents of the institution under oath.29 (c) The department may require an independent audit by a certified30 public accountant, subject to the standards the department determines.31 (d) The department, in the classification of assets, may disregard the32 amount of an asset in its analysis of capital adequacy of the financial33 institution until the amount of the asset is recovered.34 (e) After the examiners complete the examination of a financial35 institution, the examiners:36 (1) shall submit their written findings and recommendations to:37 (A) the board of directors; and38 (B) other parties authorized by the board of directors and39 approved by the director; and40 (C) in the case of a credit union, the supervisory committee41 of the credit union, in addition to the parties set forth in42 clauses (A) and (B); and

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1 (2) may confer with the parties listed in subdivision (1) on the2 findings and recommendations.3 (f) Upon the conclusion of an examination, a full, true, and detailed4 report of the condition of the financial institution shall be made to the5 department by the examiners in the form prescribed by the department.6 (g) A financial institution subject to examination by the department7 may not cause, by contract or otherwise, any data processing or other8 similar service to be performed, either on or off its premises, until9 written assurances are furnished to the department by the financial

10 institution and the entity providing the service that the performance of11 the service will be subject to regulation and examination by the12 department to the same extent as if the service was were being13 performed by the financial institution on its own premises. Entities that14 provide data processing or other similar services to more than one (1)15 financial institution need only file one (1) written assurance to cover all16 financial institutions to which the entity provides services.17 (h) The report of an examination conducted under this section:18 (1) is the exclusive property of the department; and19 (2) except as provided in subsection (i), shall not be distributed,20 published, or duplicated without the prior authorization of the21 director.22 (i) A financial institution that is or seeks to become a member of the23 Federal Home Loan Bank System may provide a copy of a report of an24 examination conducted by the department to the Federal Home Loan25 Bank for the confidential use of the Federal Home Loan Bank if the26 director and the Federal Home Loan Bank have entered into a written27 agreement that provides that the report of the examination:28 (1) remains the property of the department; and29 (2) is not:30 (A) subject to inspection under IC 5-14-3;31 (B) subject to subpoena;32 (C) subject to discovery; or33 (D) admissible in evidence in any civil action.34 (j) Except as provided in subsection (i), a person who knowingly or35 intentionally possesses, distributes, publishes, or duplicates a report of36 an examination conducted under this section without the prior37 authorization of the director commits a Class B misdemeanor.38 (k) If a financial institution contracts with an outside vendor to39 provide a service that would otherwise be undertaken internally by the40 financial institution and be subject to the department's routine41 examination procedures, the person that provides the service to the42 financial institution shall, at the request of the director, submit to an

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1 examination by the department. If the director determines that an2 examination under this subsection is necessary or desirable, the3 examination may be made at the expense of the person to be examined.4 If the person to be examined under this subsection refuses to permit the5 examination to be made, the director may order any financial institution6 that receives services from the person refusing the examination to:7 (1) discontinue receiving one (1) or more services from the8 person; or9 (2) otherwise cease conducting business with the person.

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COMMITTEE REPORT

Mr. Speaker: Your Committee on Financial Institutions, to whichwas referred House Bill 1539, has had the same under considerationand begs leave to report the same back to the House with therecommendation that said bill be amended as follows:

Page 20, between lines 7 and 8, begin a new line blocked left andinsert:"For purposes of this section, the collection of the amount of anyconditionally waived closing costs (as allowed under section 202(d)of this chapter) by a creditor, as stipulated in the loan agreement,at the time of prepayment in full does not constitute a prepaymentpenalty and is not subject to the limitations set forth in thissubsection.".

Page 28, delete line 42.Delete page 29.Page 30, delete lines 1 through 17.Page 30, between lines 37 and 38, begin a new paragraph and insert:"SECTION 25. IC 28-1-8-0.5 IS AMENDED TO READ AS

FOLLOWS [EFFECTIVE JULY 1, 2017]: Sec. 0.5. As used in thischapter, "corporation" means:

(1) a bank;(2) a trust company;(3) a corporate fiduciary;(4) a savings bank;(5) a savings association; or(6) an industrial loan and investment company that maintainsfederal deposit insurance; or(7) a credit union.

SECTION 26. IC 28-1-8-0.7, AS AMENDED BY P.L.13-2013,SECTION 72, IS AMENDED TO READ AS FOLLOWS [EFFECTIVEJULY 1, 2017]: Sec. 0.7. As used in this chapter, "shareholder", withrespect to a:

(1) mutual savings bank; or(2) mutual savings association; or(3) credit union;

refers to a member of the mutual savings bank, or mutual savingsassociation, or credit union, as applicable.

SECTION 27. IC 28-1-8-2, AS AMENDED BY P.L.27-2012,SECTION 45, IS AMENDED TO READ AS FOLLOWS [EFFECTIVEJULY 1, 2017]: Sec. 2. (a) A sale, lease, exchange, or other dispositiondescribed in section 1 of this chapter must first be proposed by the

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board of directors by the adoption of a resolution that:(1) sets forth the terms and conditions of the sale, lease, exchange,or other disposition; and(2) directs that the proposed disposition be submitted to a vote ofthe shareholders at the annual meeting or a special meeting.

(b) The meeting described in subsection (a)(2) shall:(1) be called by in the resolution and notice of the meeting shallrequired by subsection (a); and(2) be given in the manner provided in accordance with:

(A) IC 28-13-5-8, in the case of a corporation other than acredit union; and(B) IC 28-7-1-14, in the case of a credit union.

SECTION 28. IC 28-1-8-3, AS AMENDED BY P.L.27-2012,SECTION 46, IS AMENDED TO READ AS FOLLOWS [EFFECTIVEJULY 1, 2017]: Sec. 3. (a) Before a proposed disposition described insection 1 of this chapter is submitted to a vote of the shareholders, theresolution proposing the disposition shall be submitted for the approvalof the department.

(b) Subject to section 5(c) 5(d) of this chapter, and any approvalsrequired under federal law, the department may approve a resolutionif the corporation has and will have assets in excess of the corporation'sliabilities and either of the following applies:

(1) The corporation intends to merge out of existence underIC 28-1-7-1 or IC 28-7-1-33, as applicable.(2) The corporation intends to voluntarily dissolve underIC 28-1-9 or IC 28-7-1-27.1, as applicable.

(c) An officer or a director of a corporation whose proposeddisposition is approved by the department under subsection (b) may notnegotiate for or receive any economic benefit in connection with anysale of assets under this chapter, except for:

(1) compensation and other benefits paid to the officer or directorand to officers and directors of the purchasing institution in theordinary course of business;(2) any economic benefit realized by all shareholders as a resultof the disposition; or(3) any economic benefit received as part of a compensation orbenefit plan existing at the time of the disposition and approvedbefore the initiation of sale negotiations.

(d) If the department approves a resolution submitted under thissection, the department shall:

(1) write or stamp on the resolution:(A) the words "Approved by the Department of Financial

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Institutions of the State of Indiana"; and(B) the date of the approval; and

(2) place the impression of the seal of the department and thesignature of the director or the director's authorized designeebeneath the approval stamp.

SECTION 29. IC 28-1-8-4 IS AMENDED TO READ ASFOLLOWS [EFFECTIVE JULY 1, 2017]: Sec. 4. If a resolutionproposing a disposition described in section 1 of this chapter isapproved by the department, the resolution may then be submitted tothe shareholders at the annual meeting or a special meeting. Theresolution shall be authorized upon receiving the affirmative votes oftwo-thirds (2/3) of the outstanding shares. However, the departmentmay permit the resolution to be authorized without receivingshareholder approval if the corporation whose assets are to bedisposed of is in danger of insolvency.

SECTION 30. IC 28-1-8-5, AS AMENDED BY P.L.27-2012,SECTION 47, IS AMENDED TO READ AS FOLLOWS [EFFECTIVEJULY 1, 2017]: Sec. 5. (a) This section does not apply to ashareholder of a credit union that is the subject of a proposedtransaction concerning the sale, lease, exchange, or otherdisposition of the credit union's property or assets under thischapter.

(a) (b) Subject to subsection (c), (d), the rights of dissentingshareholders in the case of a merger or consolidation, as set forth inIC 28-1-7-21, apply to the sale, lease, exchange, or other disposition ofthe property and assets of a corporation under this chapter. Anydissenting shareholder shall have such rights and remedies as providedfor in IC 28-1-7-21.

(b) (c) For purposes of the application of IC 28-1-7-21 to thischapter, the "effective date" of a sale, lease, exchange, or otherdisposition under this chapter, within the meaning of IC 28-1-7-21, isthe date upon which the disposition was authorized by the shareholdersof the corporation.

(c) (d) In a proposed disposition described in section 3(b) of thischapter, if the corporation that is the subject of the proposeddisposition is a mutual savings bank or a mutual savings association,the rights and remedies for dissenting shareholders set forth inIC 28-1-7-21 do not apply.".

Page 43, line 23, strike "another credit union" and insert "acorporation (as defined in IC 28-1-8-0.5)".

Page 43, line 24, strike "selling credit union." and insert"corporation, or to sell, lease, exchange, or otherwise dispose of all

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or substantially all of the credit union's property and assets to acorporation, if:

(A) the credit union complies with IC 28-1-8; and(B) the transaction is authorized in accordance withIC 28-1-8-4.".

Page 54, line 16, delete "pawn ticket," and insert "items set forthin subdivisions (1) through (3),".

Renumber all SECTIONS consecutively.

and when so amended that said bill do pass.

(Reference is to HB 1539 as introduced.)

BURTON

Committee Vote: yeas 11, nays 0.

HB 1539—LS 7353/DI 101