2016 Indiana Code TITLE 24. TRADE REGULATION ARTICLE 4.4. FIRST LIEN MORTGAGE LENDING CHAPTER 3. ADMINISTRATION
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IC 24-4.4-3
Chapter 3. Administration
IC 24-4.4-3-101
Short title
Sec. 101. This chapter shall be known and may be cited as the
First Lien Mortgage Lending Act - Administration.
As added by P.L.145-2008, SEC.20.
IC 24-4.4-3-102
Application
Sec. 102. This chapter applies to a person that engages as a
creditor in first lien mortgage transactions in Indiana. The authority
of this chapter remains in effect, whether a licensee, individual, or
person subject to this article acts or claims to act under any licensing
or registration law of Indiana or claims to act without such authority.
As added by P.L.145-2008, SEC.20. Amended by P.L.35-2010,
SEC.28.
IC 24-4.4-3-103
Powers of department; no liability for conforming act or omission
Sec. 103. (1) In addition to other powers granted by this article,
the department within the limitations provided by law may:
(a) receive and act on complaints, take action designed to obtain
voluntary compliance with this article, or commence
proceedings on the department's own initiative;
(b) counsel persons and groups on their rights and duties under
this article;
(c) establish programs for the education of consumers with
respect to credit practices and problems;
(d) make studies appropriate to effectuate the purposes and
policies of this article and make the results available to the
public;
(e) adopt, amend, and repeal rules, orders, policies, and forms
to carry out the provisions of this article;
(f) maintain more than one (1) office within Indiana; and
(g) appoint any necessary attorneys, hearing examiners, clerks,
and other employees and agents and fix their compensation, and
authorize attorneys appointed under this section to appear for
and represent the department in court.
(2) Liability may not be imposed under this article for an act done
or omitted in conformity with a rule, written notice, written opinion,
written interpretation, or written directive of the department
notwithstanding the fact that after the act is done or omitted the rule,
written notice, written opinion, written interpretation, or written
directive may be:
(a) amended or repealed; or
(b) determined by judicial or other authority to be invalid;
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for any reason.
As added by P.L.145-2008, SEC.20.
IC 24-4.4-3-104
Department's examination and investigatory authority; record
retention; director's authority to control access to records; court
order compelling compliance; confidentiality; costs; vendors
Sec. 104. (1) In administering this article and in order to
determine whether the provisions of this article are being complied
with by persons engaging in acts subject to this article, the
department may examine the records of persons and may make
investigations of persons as may be necessary to determine
compliance. Records subject to examination under this section
include the following:
(a) Training, operating, and policy manuals.
(b) Minutes of:
(i) management meetings; and
(ii) other meetings.
(c) Financial records, credit files, and data bases.
(d) Other records that the department determines are necessary
to perform its investigation or examination.
The department may also administer oaths or affirmations, subpoena
witnesses, and compel the attendance of witnesses, including
officers, principals, mortgage loan originators, employees,
independent contractors, agents, and customers of licensees, and
other individuals or persons subject to this article. The department
may also adduce evidence and require the production of any matter
that is relevant to an investigation. The department shall determine
the sufficiency of the records maintained and whether the person has
made the required information reasonably available. The records
concerning any transaction subject to this article shall be retained for
two (2) years after the making of the final entry relating to the first
lien mortgage transaction, but in the case of a revolving first lien
mortgage transaction the two (2) year period is measured from the
date of each entry.
(2) The department's examination and investigatory authority
under this article includes the following:
(a) The authority to require a creditor to refund overcharges
resulting from the creditor's noncompliance with the terms of a
first lien mortgage transaction.
(b) The authority to require a creditor to comply with the
penalty provisions set forth in IC 24-4.4-2-201.
(c) The authority to investigate complaints filed with the
department by debtors.
(3) The department shall be given free access to the records
wherever the records are located. In making any examination or
investigation authorized by this article, the director may control
access to any documents and records of the licensee or person under
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examination or investigation. The director may take possession of the
documents and records or place a person in exclusive charge of the
documents and records in the place where the documents are usually
kept. During the period of control, a licensee or person may not
remove or attempt to remove any of the documents and records
except under a court order or with the consent of the director. Unless
the director has reasonable grounds to believe the documents or
records of the licensee or person have been, or are, at risk of being
altered or destroyed for purposes of concealing a violation of this
article, the licensee or person shall have access to the documents or
records as necessary to conduct the licensee's or person's ordinary
business affairs. If the person's records are located outside Indiana,
the records shall be made available to the department at a convenient
location within Indiana, or the person shall pay the reasonable and
necessary expenses for the department or the department's
representative to examine the records where they are maintained. The
department may designate comparable officials of the state in which
the records are located to inspect the records on behalf of the
department.
(4) Upon a person's failure without lawful excuse to obey a
subpoena or to give testimony and upon reasonable notice by the
department to all affected persons, the department may apply to any
civil court with jurisdiction for an order compelling compliance.
(5) The department shall not make public:
(a) the name or identity of a person whose acts or conduct the
department investigates under this section; or
(b) the facts discovered in the investigation.
However, this subsection does not apply to civil actions or
enforcement proceedings under this article.
(6) To discover violations of this article or to secure information
necessary for the enforcement of this article, the department may
investigate any:
(a) licensee; or
(b) person that the department suspects to be operating:
(i) without a license, when a license is required under this
article; or
(ii) otherwise in violation of this article.
The department has all investigatory and enforcement authority
under this article that the department has under IC 28-11 with respect
to financial institutions. If the department conducts an investigation
under this section, the licensee or other person investigated shall pay
all reasonably incurred costs of the investigation in accordance with
the fee schedule adopted under IC 28-11-3-5. Any costs required to
be paid under this section shall be paid not later than sixty (60) days
after the person being assessed the costs receives a notice from the
department of the costs assessed. The department may impose a fee,
in an amount fixed by the department under IC 28-11-3-5, for each
day the assessed costs are not paid, beginning on the first day after
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the sixty (60) day period described in this subsection.
(7) If a creditor contracts with an outside vendor to provide a
service that would otherwise be undertaken internally by the creditor
and be subject to the department's routine examination procedures,
the person that provides the service to the creditor shall, at the
request of the director, submit to an examination by the department.
If the director determines that an examination under this subsection
is necessary or desirable, the examination may be made at the
expense of the person to be examined. If the person to be examined
under this subsection refuses to permit the examination to be made,
the director may order any creditor that is licensed under this article
and that receives services from the person refusing the examination
to:
(a) discontinue receiving one (1) or more services from the
person; or
(b) otherwise cease conducting business with the person.
As added by P.L.145-2008, SEC.20. Amended by P.L.35-2010,
SEC.29; P.L.216-2013, SEC.4; P.L.186-2015, SEC.9.
IC 24-4.4-3-104.5
Powers of director
Sec. 104.5. To carry out the purposes of this section, the director
may:
(a) retain attorneys, accountants, or other professionals and
specialists as examiners, auditors, or investigators to conduct or
assist in the conduct of examinations or investigations;
(b) enter into agreements or relationships with other
government officials or regulatory associations in order to
improve efficiencies and reduce regulatory burden by sharing:
(i) resources;
(ii) standardized or uniform methods or procedures; and
(iii) documents, records, information, or evidence obtained
under this section;
(c) use, hire, contract, or employ public or privately available
analytical systems, methods, or software to examine or
investigate a licensee, an individual, or a person subject to this
article;
(d) accept and rely on examination or investigation reports
made by other government officials within or outside Indiana;
and
(e) accept audit reports made by an independent certified public
accountant for the licensee, individual, or person subject to this
article in the course of that part of the examination covering the
same general subject matter as the audit and may incorporate
the audit report in the report of the examination, report of
investigation, or other writing of the director.
As added by P.L.35-2010, SEC.30.
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IC 24-4.4-3-104.6
Prohibited acts
Sec. 104.6. It is a violation of this article for a person or
individual subject to this article to:
(a) directly or indirectly employ any scheme, device, or artifice
to defraud or mislead borrowers or lenders or to defraud any
person;
(b) engage in any unfair or deceptive practice toward any
person;
(c) obtain property by fraud or misrepresentation;
(d) solicit or enter into a contract with a borrower that provides
in substance that the person or individual subject to this article
may earn a fee or commission through "best efforts" to obtain
a loan even though no loan is actually obtained for the
borrower;
(e) solicit, advertise, or enter into a contract for specific interest
rates, points, or other financing terms unless the terms are
actually available at the time of soliciting, advertising, or
contracting;
(f) conduct any business covered by this article without holding
a valid license as required under this article, or assist or aid and
abet any person in the conduct of business under this article
without a valid license as required under this article;
(g) fail to make disclosures as required by this article or
regulation adopted under this article and any other applicable
state or federal law regulation;
(h) fail to comply with this article or rules adopted under this
article, or fail to comply with any other state or federal law,
rule, or regulation, applicable to any business authorized or
conducted under this article;
(i) make, in any manner, any false or deceptive statement or
representation, with regard to the rates, points, or other
financing terms or conditions for a mortgage transaction, or
engage in bait and switch advertising;
(j) negligently make any false statement or knowingly and
willfully make any omission of material fact in connection with
any information or reports filed with a governmental agency or
the NMLSR or in connection with any investigation conducted
by the director or another governmental agency;
(k) make any payment, threat, or promise, directly or indirectly,
to any person for the purposes of influencing the independent
judgment of the person in connection with a mortgage
transaction, or make any payment, threat, or promise, directly
or indirectly, to any appraiser of a property, for the purposes of
influencing the independent judgment of the appraiser with
respect to the value of the property;
(l) collect, charge, attempt to collect or charge, or use or
propose any agreement purporting to collect or charge any fee
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prohibited by this article;
(m) cause or require a borrower to obtain property insurance
coverage in an amount that exceeds the replacement cost of the
improvements as established by the property insurer;
(n) fail to account truthfully for money belonging to a party to
a mortgage transaction; or
(o) knowingly withhold, abstract, remove, mutilate, destroy, or
secrete any books, records, computer records, or other
information subject to examination under this article.
As added by P.L.35-2010, SEC.31.
IC 24-4.4-3-105
Applicability of laws governing administrative orders and rules;
venue; emergency rulemaking authority
Sec. 105. Except as otherwise provided, IC 4-21.5-3 governs any
action taken by the department under this chapter or IC 24-4.4-2-401
through IC 24-4.4-2-405. IC 4-22-2 applies to the adoption of rules
by the department under this article. All proceedings for
administrative review under IC 4-21.5-3 or judicial review under
IC 4-21.5-5 shall be held in Marion County. However, if the
department determines that an emergency exists, the department may
adopt any rules authorized by this article under IC 4-22-2-37.1.
As added by P.L.145-2008, SEC.20. Amended by P.L.35-2010,
SEC.32.
IC 24-4.4-3-106
Cease and desist orders; judicial review or enforcement
proceedings; record; appeal; unconscionable or fraudulent conduct
subject to injunction
Sec. 106. (1) After notice and hearing, the department may order
a creditor or a person acting on behalf of the creditor to cease and
desist from engaging in violations of this article. In any civil court
with jurisdiction:
(a) a respondent aggrieved by an order of the department may
obtain judicial review of the order; and
(b) the department may obtain an order of the court for the
enforcement of the department's order.
A proceeding for review or enforcement under this subsection shall
be initiated by the filing of a petition in the court. Copies of the
petition shall be served upon all parties of record.
(2) Not later than thirty (30) days after service of a petition for
review upon the department under subsection (1), or within such
further time as the court may allow, the department shall transmit to
the court the original or a certified copy of the entire record upon
which the order that is the subject of the review is based, including
any transcript of testimony, which need not be printed. By stipulation
of all parties to the review proceeding, the record may be shortened.
After conducting a hearing on the matter, the court may:
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(a) reverse or modify the order if the findings of fact of the
department are clearly erroneous in view of the reliable,
probative, and substantial evidence in the whole record;
(b) grant any temporary relief or restraining order the court
considers just; and
(c) enter an order:
(i) enforcing;
(ii) modifying;
(iii) enforcing as modified; or
(iv) setting aside;
in whole or in part, the order of the department; or
(d) enter an order remanding the case to the department for
further proceedings.
(3) An objection not urged at the hearing shall not be considered
by the court unless the failure to urge the objection is excused for
good cause shown. A party may move the court to remand the case
to the department in the interest of justice for the purpose of:
(a) adducing additional specified and material evidence; and
(b) seeking a finding upon such evidence;
upon good cause shown for the failure to previously adduce this
evidence before the department.
(4) The jurisdiction of the court is exclusive and the court's final
judgment or decree is subject to review on appeal in the same
manner and form and with the same effect as in appeals from a final
judgment or decree. The department's copy of the testimony shall be
available at reasonable times to all parties for examination without
cost.
(5) A proceeding for review under this section must be initiated
not later than thirty (30) days after a copy of the order of the
department is received. If a proceeding is not initiated within the
time set forth in this subsection, the department may obtain a decree
of a civil court with jurisdiction for enforcement of the department's
order upon a showing that:
(a) the order was issued in compliance with this section;
(b) a proceeding for review was not initiated within the thirty
(30) day period prescribed by this subsection; and
(c) the respondent is subject to the jurisdiction of the court.
(6) With respect to unconscionable agreements or fraudulent or
unconscionable conduct by a respondent, the department may not
issue an order under this section but may bring a civil action for an
injunction under section 111 of this chapter.
As added by P.L.145-2008, SEC.20. Amended by P.L.35-2010,
SEC.33.
IC 24-4.4-3-107
Assurance of discontinuance of conduct; failure to comply
Sec. 107. If it is claimed that a person has engaged in conduct
subject to an order by:
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(a) the department under section 106(1) of this chapter; or
(b) a court under sections 108 through 110 of this chapter;
the department may accept an assurance in writing that the person
will not engage in the conduct in the future. If a person giving an
assurance of discontinuance fails to comply with the terms of the
assurance, the assurance is evidence that before the assurance was
issued the person engaged in the conduct described in the assurance.
As added by P.L.145-2008, SEC.20.
IC 24-4.4-3-108
Civil action by department to restrain violation
Sec. 108. The department may bring a civil action to restrain a
person from violating this article or other state or federal law, rule,
or regulation and for other appropriate relief.
As added by P.L.145-2008, SEC.20. Amended by P.L.35-2010,
SEC.34.
IC 24-4.4-3-109
Civil action by department to enjoin deceptive act
Sec. 109. (1) As used in this section, "deceptive act" means an act
or a practice in which a person knowingly or intentionally:
(a) makes a material misrepresentation concerning; or
(b) conceals material information regarding the terms or
conditions of;
a first lien mortgage transaction.
(2) For purposes of this section, "knowingly" means having actual
knowledge at the time of the transaction.
(3) The department may bring a civil action to enjoin a deceptive
act performed in connection with a first lien mortgage transaction.
As added by P.L.145-2008, SEC.20.
IC 24-4.4-3-110
Department's application to court for temporary relief or
restraining order
Sec. 110. With respect to an action brought under:
(a) section 108 of this chapter to enjoin violations of this
article; or
(b) section 109 of this chapter to enjoin deceptive acts;
the department may apply to the court for appropriate temporary
relief against a respondent, pending final determination of the
proceedings. If the court finds after a hearing held upon notice to the
respondent that there is reasonable cause to believe that the
respondent is engaging in or is likely to engage in the conduct sought
to be restrained, the court may grant any temporary relief or
restraining order the court considers appropriate.
As added by P.L.145-2008, SEC.20.
IC 24-4.4-3-111
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Civil action by department for willful violation; imposition of civil
penalty by department; restitution
Sec. 111. (1) The department may bring a civil action against a
creditor or a person acting on behalf of the creditor to recover a civil
penalty for willfully violating this article. If the court finds that the
defendant has engaged in a course of repeated and willful violations
of this article, the court may assess a civil penalty of not more than
five thousand dollars ($5,000). A civil penalty may not be imposed
under this subsection:
(a) for violations of this article occurring more than two (2)
years before the action is brought; or
(b) for making unconscionable agreements or engaging in a
course of fraudulent or unconscionable conduct.
(2) If the department determines, after notice and an opportunity
to be heard, that a person has violated this article, the department
may, in addition to or instead of all other remedies available under
this section, impose upon the person a civil penalty not greater than
ten thousand dollars ($10,000) per violation.
(3) If the department determines, after notice and opportunity to
be heard, that a person has willfully violated this article, the
department may, in addition to or instead of all other remedies
available under this section, order restitution against the person
subject to this article for a violation of this article.
As added by P.L.145-2008, SEC.20. Amended by P.L.35-2010,
SEC.35.
IC 24-4.4-3-112
Repealed
(As added by P.L.145-2008, SEC.20. Repealed by P.L.35-2010,
SEC.209.)
IC 24-4.4-3-113
Rights of debtors not affected
Sec. 113. The grant of powers to the department under this article
does not affect remedies available to debtors under this article or
under other principles of law or equity.
As added by P.L.145-2008, SEC.20.
IC 24-4.4-3-114
Actions brought by department; venue
Sec. 114. The department may bring an action or a proceeding in
a court in a county:
(1) in which an act on which the action or proceeding is based
occurred;
(2) in which the respondent resides or transacts business; or
(3) in which the action or proceeding is otherwise authorized by
rule or venue laws.
As added by P.L.145-2008, SEC.20.
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IC 24-4.4-3-115
"Civil court"
Sec. 115. As used in this article, "civil court" means any court in
Indiana having jurisdiction of civil cases.
As added by P.L.145-2008, SEC.20.
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