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IC 24-4.5-3
Chapter 3. Loans
(Part 1. General Provisions)
IC 24-4.5-3-0.1
Application of certain amendments to chapter
Sec. 0.1. The following amendments to this chapter apply as
follows:
(1) The amendments made to section 201 of this chapter by
P.L.163-1999 do not apply to consumer loans in existence
before July 1, 1999.
(2) The amendments made to section 209(1) of this chapter by
P.L.159-2001 apply to a contract between a lender and a debtor
that is entered into or renewed after June 30, 2001.
As added by P.L.220-2011, SEC.390.
IC 24-4.5-3-101
Short title
Sec. 101. Short Title — This Chapter shall be known and may be
cited as Uniform Consumer Credit Code — Loans.
(Formerly: Acts 1971, P.L.366, SEC.4.)
IC 24-4.5-3-102
Application
Sec. 102. This chapter applies to consumer loans, including
supervised loans. In addition, IC 24-4.5-3-601 through
IC 24-4.5-3-605 apply to consumer related loans. The licensing
provisions of this chapter apply to consumer credit sales under
IC 24-4.5-2 that are subordinate lien mortgage transactions.
(Formerly: Acts 1971, P.L.366, SEC.4.) As amended by
P.L.152-1986, SEC.62; P.L.35-2010, SEC.47.
IC 24-4.5-3-103
Repealed
(Formerly: Acts 1971, P.L.366, SEC.4. As amended by
P.L.1-1994, SEC.118; P.L.122-1994, SEC.16. Repealed by
P.L.35-2010, SEC.209.)
IC 24-4.5-3-104
Repealed
(Formerly: Acts 1971, P.L.366, SEC.4. As amended by
P.L.247-1983, SEC.14; P.L.122-1994, SEC.17. Repealed by
P.L.35-2010, SEC.209.)
IC 24-4.5-3-105
"Consumer loan"; first lien mortgage transaction not included
Sec. 105. Unless the loan is made subject to IC 24-4.5-3 by
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agreement (IC 24-4.5-3-601), and except with respect to disclosure
(IC 24-4.5-3-301), debtors' remedies (IC 24-4.5-5-201), providing
payoff amounts (IC 24-4.5-3-209), providing property tax
information (IC 24-4.5-3-701), and powers and functions of the
department (IC 24-4.5-6-104), "consumer loan" does not include a
first lien mortgage transaction.
(Formerly: Acts 1971, P.L.366, SEC.4.) As amended by Acts 1979,
P.L.238, SEC.1; Acts 1981, P.L.218, SEC.5; P.L.152-1986, SEC.63;
P.L.14-1992, SEC.23; P.L.176-1996, SEC.5; P.L.23-2000, SEC.4;
P.L.90-2008, SEC.7; P.L.35-2010, SEC.48.
IC 24-4.5-3-106
"Loan"
Sec. 106. Definition: "Loan" — "Loan" includes
(1) the creation of debt by the lender's payment of or agreement
to pay money to the debtor or to a third party for the account of the
debtor;
(2) the creation of debt by a credit to an account with the lender
upon which the debtor is entitled to draw immediately;
(3) the creation of debt pursuant to a lender credit card or similar
arrangement; and
(4) the forbearance of debt arising from a loan.
(Formerly: Acts 1971, P.L.366, SEC.4.)
IC 24-4.5-3-107
Definitions; "lender"; "precomputed"; "principal"
Sec. 107. Definitions: "Lender"; "Precomputed"; "Principal" ) (1)
Except as otherwise provided, "lender" means a person regularly
engaged in making consumer loans. The term includes an assignee
of the lender's right to payment but use of the term does not in itself
impose on an assignee any obligation of the lender with respect to
events occurring before the assignment.
(2) A loan, refinancing, or consolidation is "precomputed" if the
debt is expressed as a sum comprising the principal and the amount
of the loan finance charge computed in advance.
(3) "Principal" of a loan means the total of:
(a) the net amount paid to, receivable by, or paid or payable for
the account of the debtor;
(b) the amount of any discount excluded from the loan finance
charge (subsection (2) of IC 24-4.5-3-109); and
(c) to the extent that payment is deferred:
(i) amounts actually paid or to be paid by the lender for
registration, certificate of title, or license fees if not included
in (a); and
(ii) additional charges permitted by this chapter (IC
24-4.5-3-202).
(Formerly: Acts 1971, P.L.366, SEC.4.) As amended by
P.L.145-2008, SEC.25.
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IC 24-4.5-3-108
"Revolving loan account"
Sec. 108. Definition: "Revolving Loan Account" — "Revolving
loan account" means an arrangement between a lender and a debtor
pursuant to which (1) the lender may permit the debtor to obtain
loans from time to time, (2) the unpaid balances of principal and the
loan finance and other appropriate charges are debited to an account,
(3) a loan finance charge if made is not precomputed but is computed
on the outstanding unpaid balances of the debtor's account from time
to time, and (4) the debtor has the privilege of paying the balances in
instalments.
(Formerly: Acts 1971, P.L.366, SEC.4.)
IC 24-4.5-3-109
"Loan finance charge"
Sec. 109. (1) "Loan finance charge" means the sum of:
(a) all charges payable directly or indirectly by the debtor and
imposed directly or indirectly by the lender as an incident to the
extension of credit, including any of the following types of
charges which are applicable: interest or any amount payable
under a point, discount, or other system of charges, however
denominated, premium or other charge for any guarantee or
insurance protecting the lender against the debtor's default or
other credit loss; and
(b) charges incurred for investigating the collateral or
credit-worthiness of the debtor.
The term does not include charges as a result of default, additional
charges (IC 24-4.5-3-202), delinquency charges (IC 24-4.5-3-203.5),
or deferral charges (IC 24-4.5-3-204). The term does not include
charges paid or payable to a third party that are not required by the
lender as a condition or incident to the extension of credit except for
borrower paid mortgage broker fees, including fees paid directly to
the broker or the lender (for delivery to the broker), whether the fees
are paid in cash or financed. However, borrower paid mortgage
broker fees do not include fees paid to a mortgage broker by a
creditor, including yield spread premiums and service release fees.
(2) If a lender makes a loan to a debtor by purchasing or satisfying
obligations of the debtor pursuant to a lender credit card or similar
arrangement, and the purchase or satisfaction is made at less than the
face amount of the obligation, the discount is not part of the loan
finance charge.
(Formerly: Acts 1971, P.L.366, SEC.4.) As amended by
P.L.247-1983, SEC.15; P.L.14-1992, SEC.24; P.L.172-1997, SEC.4.
IC 24-4.5-3-110
"Civil proceeding advance payment transaction"
Sec. 110. (1) "Civil proceeding advance payment transaction", or
"CPAP transaction", means a nonrecourse transaction in which a
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CPAP provider provides a funded amount to a consumer claimant to
use for any purpose other than prosecuting the consumer claimant's
civil proceeding, if the repayment of the funded amount is:
(a) required only if the consumer claimant prevails in the civil
proceeding; and
(b) sourced from the proceeds of the civil proceeding, whether
the proceeds result from a judgment, a settlement, or some other
resolution.
(2) The term includes a transaction:
(a) that is termed or described as:
(i) a purchase; or
(ii) an assignment of an interest in a consumer claimant's
civil proceeding, or in the proceeds of a consumer claimant's
civil proceeding;
by the CPAP provider; or
(b) with respect to which the CPAP provider sets forth in a
CPAP contract, an agreement by:
(i) the CPAP provider to purchase from the consumer
claimant; or
(ii) the consumer claimant to assign to the CPAP provider;
a contingent right to receive a share of the potential proceeds of
the consumer claimant's civil proceeding, whether the proceeds
result from a judgment, a settlement, or some other resolution.
(3) Notwithstanding section 202(1)(i) of this chapter and section
502(6) of this chapter, a CPAP transaction is not a consumer loan.
As added by P.L.153-2016, SEC.3.
IC 24-4.5-3-110.5
Definitions; "civil proceeding"; "civil proceeding advance payment
contract"; "civil proceeding advance payment provider";
"consumer claimant"; "funded amount"
Sec. 110.5. (1) "Civil proceeding", with respect to a CPAP
transaction, means:
(a) a civil action;
(b) a mediation, an arbitration, or any other alternative dispute
resolution proceeding; or
(c) an administrative proceeding before:
(i) an agency or instrumentality of the state; or
(ii) a political subdivision, or an agency or instrumentality of
a political subdivision, of the state;
that is filed in, or is under the jurisdiction of, a court with jurisdiction
in Indiana, a tribunal in Indiana, or an agency or instrumentality
described in subdivision (c) in Indiana. The term includes all
proceedings arising out of or relating to the proceeding, including
any proceedings on appeal or remand, and any enforcement,
ancillary, or parallel proceedings.
(2) "Civil proceeding advance payment contract", or "CPAP
contract", means a contract for a CPAP transaction that a CPAP
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provider enters into, or offers to enter into, with a consumer
claimant.
(3) "Civil proceeding advance payment provider", or "CPAP
provider", means a person that:
(a) enters into, or offers to enter into, a CPAP transaction with
a consumer claimant in connection with a civil proceeding; and
(b) notwithstanding section 110(3) of this chapter, and subject
to IC 24-12-9, is licensed with the department in accordance
with this chapter and IC 24-12-9.
(4) "Consumer claimant" means an individual:
(a) who is or may become a plaintiff, a claimant, or a
demandant in a civil proceeding; and
(b) who:
(i) is offered a CPAP transaction by a CPAP provider; or
(ii) enters into a CPAP transaction with a CPAP provider;
regardless of whether the individual is a resident of Indiana.
(5) "Funded amount", with respect to a CPAP transaction, means
the amount of money:
(a) that is provided to the consumer claimant by the CPAP
provider; and
(b) the repayment of which is:
(i) required only if the consumer claimant prevails in the
consumer claimant's civil proceeding; and
(ii) sourced from the proceeds of the civil proceeding,
whether the proceeds result from a judgment, a settlement,
or some other resolution;
regardless of the term used by the CPAP provider in the CPAP
contract to identify the amount.
As added by P.L.153-2016, SEC.4.
(Part 2. Maximum Charges)
IC 24-4.5-3-201
Loan finance charge and origination fee for consumer loans other
than supervised loans
Sec. 201. Loan Finance Charge for Consumer Loans other than
Supervised Loans—(1) Except as provided in subsections (6) and
(8), with respect to a consumer loan other than a supervised loan (as
defined in section 501 of this chapter), a lender may contract for a
loan finance charge, calculated according to the actuarial method, not
exceeding twenty-five percent (25%) per year on the unpaid balances
of the principal.
(2) This section does not limit or restrict the manner of
contracting for the loan finance charge, whether by way of add-on,
discount, or otherwise, so long as the rate of the loan finance charge
does not exceed that permitted by this section. If the loan is
precomputed:
(a) the loan finance charge may be calculated on the assumption
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that all scheduled payments will be made when due; and
(b) the effect of prepayment is governed by the provisions on
rebate upon prepayment in section 210 of this chapter.
(3) For the purposes of this section, the term of a loan commences
with the date the loan is made. Differences in the lengths of months
are disregarded, and a day may be counted as one-thirtieth (1/30) of
a month. Subject to classifications and differentiations the lender
may reasonably establish, a part of a month in excess of fifteen (15)
days may be treated as a full month if periods of fifteen (15) days or
less are disregarded and if that procedure is not consistently used to
obtain a greater yield than would otherwise be permitted. For
purposes of computing average daily balances, the creditor may elect
to treat all months as consisting of thirty (30) days.
(4) With respect to a consumer loan made pursuant to a revolving
loan account:
(a) the loan finance charge shall be deemed not to exceed the
maximum annual percentage rate if the loan finance charge
contracted for and received does not exceed a charge in each
monthly billing cycle which is two and eighty-three thousandths
percent (2.083%) of an amount not greater than:
(i) the average daily balance of the debt;
(ii) the unpaid balance of the debt on the same day of the
billing cycle; or
(iii) subject to subsection (5), the median amount within a
specified range within which the average daily balance or
the unpaid balance of the debt, on the same day of the billing
cycle, is included; for the purposes of this subparagraph and
subparagraph (ii), a variation of not more than four (4) days
from month to month is "the same day of the billing cycle";
(b) if the billing cycle is not monthly, the loan finance charge
shall be deemed not to exceed the maximum annual percentage
rate if the loan finance charge contracted for and received does
not exceed a percentage which bears the same relation to
one-twelfth (1/12) the maximum annual percentage rate as the
number of days in the billing cycle bears to thirty (30); and
(c) notwithstanding subsection (1), if there is an unpaid balance
on the date as of which the loan finance charge is applied, the
lender may contract for and receive a charge not exceeding fifty
cents ($0.50) if the billing cycle is monthly or longer, or the pro
rata part of fifty cents ($0.50) which bears the same relation to
fifty cents ($0.50) as the number of days in the billing cycle
bears to thirty (30) if the billing cycle is shorter than monthly,
but no charge may be made pursuant to this paragraph if the
lender has made an annual charge for the same period as
permitted by the provisions on additional charges in section
202(1)(c) of this chapter.
(5) Subject to classifications and differentiations the lender may
reasonably establish, the lender may make the same loan finance
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charge on all amounts financed within a specified range. A loan
finance charge does not violate subsection (1) if:
(a) when applied to the median amount within each range, it
does not exceed the maximum permitted by subsection (1); and
(b) when applied to the lowest amount within each range, it
does not produce a rate of loan finance charge exceeding the
rate calculated according to paragraph (a) by more than eight
percent (8%) of the rate calculated according to paragraph (a).
(6) With respect to a consumer loan not made pursuant to a
revolving loan account, the lender may contract for and receive a
minimum loan finance charge of not more than thirty dollars ($30).
The minimum loan finance charge allowed under this subsection may
be imposed only if the lender does not assess a loan origination fee
under subsection (8) and:
(a) the debtor prepays in full a consumer loan, refinancing, or
consolidation, regardless of whether the loan, refinancing, or
consolidation is precomputed;
(b) the loan, refinancing, or consolidation prepaid by the debtor
is subject to a loan finance charge that:
(i) is contracted for by the parties; and
(ii) does not exceed the rate prescribed in subsection (1); and
(c) the loan finance charge earned at the time of prepayment is
less than the minimum loan finance charge contracted for under
this subsection.
(7) The amount of thirty dollars ($30) in subsection (6) is subject
to change under the provisions on adjustment of dollar amounts (IC
24-4.5-1-106). However, notwithstanding IC 24-4.5-1-106(1), the
Reference Base Index to be used under this subsection is the Index
for October 1992.
(8) Except as provided in subsection (6), in addition to the loan
finance charge provided for in this section and to any other charges
and fees permitted by this chapter, a lender may contract for and
receive a loan origination fee of not more than the following:
(a) In the case of a consumer loan that is secured by an interest
in land and that:
(i) is not made under a revolving loan account, two percent
(2%) of the loan amount; or
(ii) is made under a revolving loan account, two percent
(2%) of the line of credit.
(b) In the case of consumer loan that is not secured by an
interest in land, fifty dollars ($50).
(9) The loan origination fee provided for in subsection (8) is not
subject to refund or rebate.
(10) Notwithstanding subsections (8) and (9), in the case of a
consumer loan that is not secured by an interest in land, if a lender
retains any part of a loan origination fee charged on a loan that is
paid in full by a new loan from the same lender, the following apply:
(a) If the loan is paid in full by the new loan within three (3)
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months after the date of the prior loan, the lender may not
charge a loan origination fee on the new loan, or, in the case of
a revolving loan, on the increased credit line.
(b) The lender may not assess more than two (2) loan
origination fees in any twelve (12) month period.
(11) In the case of a consumer loan that is secured by an interest
in land, this section does not prohibit a lender from contracting for
and receiving a fee for preparing deeds, mortgages, reconveyances,
and similar documents under section 202(1)(d)(ii) of this chapter, in
addition to the loan origination fee provided for in subsection (8).
(Formerly: Acts 1971, P.L.366, SEC.4.) As amended by Acts 1982,
P.L.150, SEC.3; P.L.14-1992, SEC.25; P.L.122-1994, SEC.18;
P.L.45-1995, SEC.8; P.L.163-1999, SEC.1; P.L.10-2006, SEC.5 and
P.L.57-2006, SEC.5; P.L.145-2008, SEC.26; P.L.91-2013, SEC.2.
IC 24-4.5-3-202
Additional charges
Sec. 202. (1) In addition to the loan finance charge permitted by
IC 24-4.5-3-201 through IC 24-4.5-3-210, a lender may contract for
and receive the following additional charges in connection with a
consumer loan:
(a) Official fees and taxes.
(b) Charges for insurance as described in subsection (2).
(c) Annual participation fees assessed in connection with a
revolving loan account. Annual participation fees must:
(i) be reasonable in amount;
(ii) bear a reasonable relationship to the lender's costs to
maintain and monitor the loan account; and
(iii) not be assessed for the purpose of circumvention or
evasion of this article, as determined by the department.
(d) With respect to a debt secured by an interest in land, the
following closing costs, if they are bona fide, reasonable in
amount, and not for the purpose of circumvention or evasion of
this article:
(i) Fees for title examination, abstract of title, title insurance,
property surveys, or similar purposes.
(ii) Fees for preparing deeds, mortgages, and reconveyance,
settlement, and similar documents.
(iii) Notary and credit report fees.
(iv) Amounts required to be paid into escrow or trustee
accounts if the amounts would not otherwise be included in
the loan finance charge.
(v) Appraisal fees.
(e) Notwithstanding provisions of the Federal Consumer Credit
Protection Act concerning disclosure, charges for other
benefits, including insurance, conferred on the debtor, if the
benefits are of value to the debtor and if the charges are
reasonable in relation to the benefits, and are excluded as
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permissible additional charges from the loan finance charge.
With respect to any other additional charge not specifically
provided for in this section to be a permitted charge under this
subsection, the creditor must submit a written explanation of the
charge to the department indicating how the charge would be
assessed and the value or benefit to the debtor. Supporting
documents may be required by the department. The department
shall determine whether the charge would be of benefit to the
debtor and is reasonable in relation to the benefits.
(f) A charge not to exceed twenty-five dollars ($25) for each
return by a bank or other depository institution of a dishonored
check, negotiable order of withdrawal, or share draft issued by
the debtor.
(g) With respect to a revolving loan account, a fee not to exceed
twenty-five dollars ($25) in each billing cycle during which the
balance due under the revolving loan account exceeds by more
than one hundred dollars ($100) the maximum credit limit for
the account established by the lender.
(h) With respect to a revolving loan account, a transaction fee
that may not exceed the lesser of the following:
(i) Two percent (2%) of the amount of the transaction.
(ii) Ten dollars ($10).
(i) This subdivision applies to a CPAP transaction offered or
entered into after June 30, 2016. With respect to a CPAP
transaction, a CPAP provider may impose the following charges
and fees:
(i) A fee calculated at an annual rate that does not exceed
thirty-six percent (36%) of the funded amount.
(ii) A servicing charge calculated at an annual rate that does
not exceed seven percent (7%) of the funded amount.
(iii) If the funded amount of the CPAP transaction is less
than five thousand dollars ($5,000), a one (1) time charge
that does not exceed two hundred fifty dollars ($250) for
obtaining and preparing documents.
(iv) If the funded amount of the CPAP transaction is at least
five thousand dollars ($5,000), a one (1) time charge that
does not exceed five hundred dollars ($500) for obtaining
and preparing documents.
A CPAP provider may not assess, or collect from the consumer
claimant, any other fee or charge in connection with a CPAP
transaction, including any finance charges under section 201 or
508 of this chapter.
The additional charges provided for in subdivisions (f), (g), (h), and
(i) are not subject to refund or rebate.
(2) An additional charge may be made for insurance in connection
with the loan, other than insurance protecting the lender against the
debtor's default or other credit loss:
(a) with respect to insurance against loss of or damage to
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property or against liability, if the lender furnishes a clear and
specific statement in writing to the debtor, setting forth the cost
of the insurance if obtained from or through the lender and
stating that the debtor may choose the person, subject to the
lender's reasonable approval, through whom the insurance is to
be obtained; and
(b) with respect to consumer credit insurance providing life,
accident, unemployment or other loss of income, or health
coverage, if the insurance coverage is not a factor in the
approval by the lender of the extension of credit and this fact is
clearly disclosed in writing to the debtor, and if, in order to
obtain the insurance in connection with the extension of credit,
the debtor gives specific affirmative written indication of the
desire to do so after written disclosure of the cost of the
insurance.
(Formerly: Acts 1971, P.L.366, SEC.4; Acts 1975, P.L.266, SEC.1.)
As amended by P.L.247-1983, SEC.16; P.L.139-1990, SEC.1;
P.L.181-1991, SEC.3; P.L.14-1992, SEC.26; P.L.122-1994, SEC.19;
P.L.45-1995, SEC.9; P.L.80-1998, SEC.6; P.L.213-2007, SEC.8;
P.L.217-2007, SEC.7; P.L.153-2016, SEC.5.
IC 24-4.5-3-203
Repealed
(Repealed by P.L.122-1994, SEC.122.)
IC 24-4.5-3-203.5
Delinquency charges; credit charges not precomputed
Sec. 203.5. Delinquency Charges — (1) With respect to a
consumer loan, refinancing, or consolidation, the parties may
contract for a delinquency charge of not more than five dollars ($5)
on any installment or minimum payment due not paid in full within
ten (10) days after its scheduled due date.
(2) A delinquency charge under this section may be collected only
once on an installment however long it remains in default. With
regard to a delinquency charge on consumer loans made under a
revolving loan account, the delinquency charge may be applied each
month that the payment is less than the minimum required payment
on the account. A delinquency charge may be collected any time
after it accrues. A delinquency charge may not be collected if the
installment has been deferred and a deferral charge (IC 24-4.5-3-204)
has been paid or incurred.
(3) A delinquency charge may not be collected on an installment
or payment due that is paid in full within ten (10) days after its
scheduled due date even though an earlier maturing installment,
minimum payment, or a delinquency charge on:
(a) an earlier installment; or
(b) payment due;
may not have been paid in full. For purposes of this subsection,
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payments are applied first to current installments or payments due
and then to delinquent installments or payments due.
(4) If two (2) installments or parts of two (2) installments of a
precomputed loan are in default for ten (10) days or more, the lender
may elect to convert the loan from a precomputed loan to a loan in
which the finance charge is based on unpaid balances. A lender that
makes this election shall make a rebate under the provisions on
rebates upon prepayment (IC 24-4.5-3-210) as of the maturity date of
the first delinquent installment, and thereafter may make a loan
finance charge as authorized by the provisions on loan finance
charges for consumer loans (IC 24-4.5-3-201) or supervised loans (IC
24-4.5-3-508). The amount of the rebate shall not be reduced by the
amount of any permitted minimum charge (IC 24-4.5-3-210). Any
deferral charges made on installments due at or after the maturity
date of the first delinquent installment shall be rebated, and no
further deferral charges shall be made.
(5) The amount of five dollars ($5) in subsection (1) is subject to
change pursuant to the section on adjustment of dollar amounts (IC
24-4.5-1-106).
(6) If the parties provide by contract for a delinquency charge that
is subject to change, the lender shall disclose in the contract that the
amount of the delinquency charge is subject to change as allowed by
IC 24-4.5-1-106.
As added by P.L.247-1983, SEC.17. Amended by P.L.181-1991,
SEC.4; P.L.115-1992, SEC.2; P.L.14-1992, SEC.27; P.L.122-1994,
SEC.20; P.L.45-1995, SEC.10.
IC 24-4.5-3-204
Deferral charges
Sec. 204. Deferral Charges — (1) With respect to a precomputed
consumer loan, refinancing, or consolidation, the parties before or
after default may agree in writing to a deferral of all or part of one
(1) or more unpaid instalments, and the lender may make and collect
a charge not exceeding the lesser of thirty-six percent (36%) per year
or the rate previously stated to the debtor pursuant to the provisions
on disclosure (Part 3) applied to the amount or amounts deferred for
the period of deferral calculated without regard to difference in the
lengths of months, but proportionally for a part of a month, counting
each day as one-thirtieth (1/30) of a month. A deferral charge may be
collected at the time it is assessed or at any time thereafter.
(2) The lender, in addition to the deferral charge, may make
appropriate additional charges (IC 24-4.5-3-202), and the amount of
these charges which is not paid in cash may be added to the amount
deferred for the purpose of calculating the deferral charge.
(3) The parties may agree in writing at the time of a precomputed
consumer loan, refinancing, or consolidation that if an instalment is
not paid within ten (10) days after its due date, the lender may
unilaterally grant a deferral and make charges as provided in this
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section. No deferral charge may be made for a period after the date
that the lender elects to accelerate the maturity of the agreement.
(4) A delinquency charge made by the lender on an instalment
may not be retained if a deferral charge is made pursuant to this
section with respect to the period of delinquency.
(Formerly: Acts 1971, P.L.366, SEC.4.) As amended by
P.L.186-2015, SEC.14.
IC 24-4.5-3-205
Loan finance charge on refinancing
Sec. 205. Loan Finance Charge on Refinancing — With respect
to a consumer loan, refinancing, or consolidation, the lender may by
agreement with the debtor refinance the unpaid balance and may
contract for and receive a loan finance charge based on the principal
resulting from the refinancing at a rate not exceeding that permitted
by the provisions on a loan finance charge for consumer loans (IC
24-4.5-3-201) or the provisions on a loan finance charge for
supervised loans (IC 24-4.5-3-508), whichever is appropriate. For the
purpose of determining the loan finance charge permitted, the
principal resulting from the refinancing comprises the following:
(1) if the transaction was not precomputed, the total of the unpaid
balance and the accrued charges on the date of the refinancing, or, if
the transaction was precomputed, the amount which the debtor would
have been required to pay upon prepayment pursuant to the
provisions on rebate upon prepayment (IC 24-4.5-3-210) on the date
of refinancing; and
(2) appropriate additional charges (IC 24-4.5-3-202), payment of
which is deferred.
(Formerly: Acts 1971, P.L.366, SEC.4.) As amended by P.L.14-1992,
SEC.28.
IC 24-4.5-3-206
Loan finance charge on consolidation
Sec. 206. Loan Finance Charge on Consolidation — (1) If a
debtor owes an unpaid balance to a lender with respect to a consumer
loan, refinancing, or consolidation, and becomes obligated on
another consumer loan, refinancing, or consolidation with the same
lender, the parties may agree to a consolidation resulting in a single
schedule of payments. If the previous consumer loan, refinancing, or
consolidation was not precomputed, the parties may agree to add the
unpaid amount of principal and accrued charges on the date of
consolidation to the principal with respect to the subsequent loan. If
the previous consumer loan, refinancing, or consolidation was
precomputed, the parties may agree to refinance the unpaid balance
pursuant to the provisions on refinancing (24-4.5-3-205) and to
consolidate the principal resulting from the refinancing by adding it
to the principal with respect to the subsequent loan. In either case the
lender may contract for and receive a loan finance charge based on
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the aggregate principal resulting from the consolidation at a rate not
in excess of that permitted by the provisions on loan finance charge
for consumer loans (24-4.5-3-201) or the provisions on loan finance
charge for supervised loans (24-4.5-3-508), whichever is appropriate.
(2) The parties may agree to consolidate the unpaid balance of a
consumer loan with the unpaid balance of a consumer credit sale.
The parties may agree to refinance the previous unpaid balance
pursuant to the provisions on refinancing sales (24-4.5-2-205) or the
provisions on refinancing loans (24-4.5-3-205), whichever is
appropriate, and to consolidate the amount financed resulting from
the refinancing or the principal resulting from the refinancing by
adding it to the amount financed or principal with respect to the
subsequent sale or loan. The aggregate amount resulting from the
consolidation shall be deemed principal, and the creditor may
contract for and receive a loan finance charge based on the principal
at a rate not in excess of that permitted by the provisions on loan
finance charge for consumer loans (24-4.5-3-201) or the provisions
on loan finance charge for supervised loans (24-4.5-3-508),
whichever is appropriate.
(Formerly: Acts 1971, P.L.366, SEC.4.)
IC 24-4.5-3-207
Conversion to revolving loan account
Sec. 207. Conversion to Revolving Loan Account. — The parties
may agree to add to a revolving loan account the unpaid balance of
a consumer loan, not made pursuant to a revolving loan account, or
a refinancing, or consolidation thereof, or the unpaid balance of a
consumer credit sale, refinancing or consolidation, for the purpose
of this section.
(1) the unpaid balance of a consumer loan, refinancing, or
consolidation is an amount equal to the principal determined
according to the provisions on refinancing (24-4.5-3-205); and
(2) the unpaid balance of a consumer credit sale, refinancing, or
consolidation is an amount equal to the amount financed determined
according to the provisions on refinancing (24-4.5-2-205).
(Formerly: Acts 1971, P.L.366, SEC.4.)
IC 24-4.5-3-208
Advances to perform covenants of debtor
Sec. 208. Advances to Perform Covenants of Debtor. — (1) If the
agreement with respect to a consumer loan, refinancing, or
consolidation contains covenants by the debtor to perform certain
duties pertaining to insuring or preserving collateral and if the lender
pursuant to the agreement pays for performance of the duties on
behalf of the debtor, the lender may add the amounts paid to the debt.
Within a reasonable time after advancing any sums, he shall state to
the debtor in writing the amount of the sums advanced, any charges
with respect to this amount, and any revised payment schedule and,
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if the duties of the debtor performed by the lender pertain to
insurance, a brief description of the insurance paid for by the lender
including the type and amount of coverages. No further information
need be given.
(2) A loan finance charge may be made for sums advanced
pursuant to subsection (1) at a rate not exceeding the rate stated to
the debtor pursuant to the provisions on disclosure (Part 3) with
respect to the loan, refinancing, or consolidation, except that with
respect to a revolving loan account the amount of the advance may
be added to the unpaid balance of the debt and the lender may make
a loan finance charge not exceeding that permitted by the provisions
on loan finance charge for consumer loans (24-4.5-3-201) or for
supervised loans (24-4.5-3-508), whichever is appropriate.
(Formerly: Acts 1971, P.L.366, SEC.4.)
IC 24-4.5-3-209
Right to prepay; prepayment penalty; total finance charge; payoff
statement; liability for failure to provide; short sales; foreclosed
property; no protection from deficiency judgment
Sec. 209. Right to Prepay - (1) Subject to the provisions on rebate
upon prepayment (section 210 of this chapter), the debtor may
prepay in full the unpaid balance of a consumer loan, refinancing, or
consolidation at any time without penalty. With respect to a
consumer loan that is primarily secured by an interest in land, a
lender may contract for a penalty for prepayment of the loan in full,
not to exceed two percent (2%) of any amount prepaid within sixty
(60) days of the date of the prepayment in full, after deducting all
refunds and rebates as of the date of the prepayment. However, the
penalty may not be imposed:
(a) if the loan is refinanced or consolidated with the same
creditor;
(b) for prepayment by proceeds of any insurance or acceleration
after default; or
(c) after three (3) years from the contract date.
(2) At the time of prepayment of a consumer loan not subject to
the provisions of rebate upon prepayment (section 210 of this
chapter), the total finance charge, including the prepaid finance
charge but excluding the loan origination fee allowed under this
chapter, may not exceed the maximum charge allowed under this
chapter for the period the loan was in effect. For the purposes of
determining compliance with this subsection, the total finance charge
does not include the following:
(a) The loan origination fee allowed under this chapter.
(b) The debtor paid mortgage broker fee, if any, paid to a person
who does not control, is not controlled by, or is not under
common control with, the creditor holding the loan at the time
a consumer loan is prepaid.
(3) The creditor or mortgage servicer shall provide, in writing, an
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accurate payoff amount for the consumer loan to the debtor within
seven (7) business days (excluding legal public holidays, Saturdays,
and Sundays) after the creditor or mortgage servicer receives the
debtor's written request for the accurate consumer loan payoff
amount. A payoff statement provided by a creditor or mortgage
servicer under this subsection must show the date the statement was
prepared and itemize the unpaid principal balance and each fee,
charge, or other sum included within the payoff amount. A creditor
or mortgage servicer who fails to provide the accurate consumer loan
payoff amount is liable for:
(a) one hundred dollars ($100) if an accurate consumer loan
payoff amount is not provided by the creditor or mortgage
servicer within seven (7) business days (excluding legal public
holidays, Saturdays, and Sundays) after the creditor or mortgage
servicer receives the debtor's first written request; and
(b) the greater of:
(i) one hundred dollars ($100); or
(ii) the loan finance charge that accrues on the loan from the
date the creditor or mortgage servicer receives the first
written request until the date on which the accurate
consumer loan payoff amount is provided;
if an accurate consumer loan payoff amount is not provided by
the creditor or mortgage servicer within seven (7) business days
(excluding legal public holidays, Saturdays, and Sundays) after
the creditor or mortgage servicer receives the debtor's second
written request, and the creditor or mortgage servicer failed to
comply with subdivision (a).
A liability under this subsection is an excess charge under
IC 24-4.5-5-202.
(4) As used in this subsection, "mortgage transaction" means a
consumer loan in which a mortgage or a land contract (or another
consensual security interest equivalent to a mortgage or a land
contract) that constitutes a lien is created or retained against land
upon which there is constructed or intended to be constructed a
dwelling that is or will be used by the debtor primarily for personal,
family, or household purposes. This subsection applies to a mortgage
transaction with respect to which any installment or minimum
payment due is delinquent for at least sixty (60) days. The creditor,
servicer, or the creditor's agent shall acknowledge a written offer
made in connection with a proposed short sale not later than five (5)
business days (excluding legal public holidays, Saturdays, and
Sundays) after the date of the offer if the offer complies with the
requirements for a qualified written request set forth in 12 U.S.C.
2605(e)(1)(B). The creditor, servicer, or creditor's agent is required
to acknowledge a written offer made in connection with a proposed
short sale from a third party acting on behalf of the debtor only if the
debtor has provided written authorization for the creditor, servicer,
or creditor's agent to do so. Not later than thirty (30) business days
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(excluding legal public holidays, Saturdays, and Sundays) after
receipt of an offer under this subsection, the creditor, servicer, or
creditor's agent shall respond to the offer with an acceptance or a
rejection of the offer. The thirty (30) day period described in this
subsection may be extended for not more than fifteen (15) business
days (excluding legal public holidays, Saturdays, and Sundays) if,
before the end of the thirty (30) day period, the creditor, the servicer,
or the creditor's agent notifies the debtor of the extension and the
reason the extension is needed. Payment accepted by a creditor,
servicer, or creditor's agent in connection with a short sale constitutes
payment in full satisfaction of the mortgage transaction unless the
creditor, servicer, or creditor's agent obtains:
(a) the following statement: "The debtor remains liable for any
amount still owed under the mortgage transaction."; or
(b) a statement substantially similar to the statement set forth in
subdivision (a);
acknowledged by the initials or signature of the debtor, on or before
the date on which the short sale payment is accepted. As used in this
subsection, "short sale" means a transaction in which the property
that is the subject of a mortgage transaction is sold for an amount
that is less than the amount of the debtor's outstanding obligation
under the mortgage transaction. A creditor or mortgage servicer that
fails to respond to an offer within the time prescribed by this
subsection is liable in accordance with 12 U.S.C. 2605(f) in any
action brought under that section.
(5) This section is not intended to provide the owner of real estate
subject to the issuance of process under a judgment or decree of
foreclosure any protection or defense against a deficiency judgment
for purposes of the borrower protections from liability that must be
disclosed under 12 CFR 1026.38(p)(3) on the form required by 12
CFR 1026.38 ("Closing Disclosures" form under the Amendments to
the 2013 Integrated Mortgage Disclosures Rule Under the Real
Estate Settlement Procedures Act (Regulation X) and the Truth In
Lending Act (Regulation Z) and the 2013 Loan Originator Rule
Under the Truth in Lending Act (Regulation Z)).
(Formerly: Acts 1971, P.L.366, SEC.4.) As amended by P.L.14-1992,
SEC.29; P.L.122-1994, SEC.21; P.L.23-2000, SEC.6; P.L.159-2001,
SEC.1; P.L.145-2008, SEC.27; P.L.35-2010, SEC.49; P.L.89-2011,
SEC.16; P.L.27-2012, SEC.18; P.L.54-2016, SEC.3; P.L.73-2016,
SEC.11.
IC 24-4.5-3-210
Rebate upon prepayment
Sec. 210. Rebate upon Prepayment. — (1) Except as provided in
subsection (2), upon prepayment in full of the unpaid balance of a
precomputed consumer loan, refinancing, or consolidation, an
amount not less than the unearned portion of the loan finance charge
calculated according to this section shall be rebated to the debtor. If
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the rebate otherwise required is less than one dollar ($1), no rebate
need be made.
(2) Upon prepayment in full of a consumer loan, refinancing, or
consolidation, other than one (1) under a revolving loan account, if
the loan finance charge earned is less than any permitted minimum
loan finance charge (IC 24-4.5-3-201(6) or IC 24-4.5-3-508(7))
contracted for, whether or not the consumer loan, refinancing, or
consolidation is precomputed, the lender may collect or retain the
minimum loan finance charge, as if earned, not exceeding the loan
finance charge contracted for.
(3) The unearned portion of the loan finance charge is a fraction
of the loan finance charge of which the numerator is the sum of the
periodic balances scheduled to follow the computational period in
which prepayment occurs, and the denominator is the sum of all
periodic balances under either the loan agreement or, if the balance
owing resulted from a refinancing (IC 24-4.5-3-205) or a
consolidation (IC 24-4.5-3-206), under the refinancing agreement or
consolidation agreement.
(4) In this section:
(a) "periodic balance" means the amount scheduled to be
outstanding on the last day of a computational period before
deducting the payment, if any, scheduled to be made on that
day;
(b) "computation period" means one (1) month if one-half (1/2)
or more of the intervals between scheduled payments under the
agreement is one (1) month or more, and otherwise means one
(1) week;
(c) the "interval" to the due date of the first scheduled
installment or the final scheduled payment date is measured
from the date of a loan, refinancing, or consolidation, and
includes either the first or last day of the interval; and
(d) if the interval to the due date of the first scheduled
installment does not exceed one (1) month by more than fifteen
(15) days when the computational period is one (1) month, or
eleven (11) days when the computational period is one (1)
week, the interval shall be considered as one (1) computational
period.
(5) This subsection applies only if the schedule of payments is not
regular.
(a) If the computational period is one (1) month and:
(i) if the number of days in the interval to the due date of the
first scheduled installment is less than one (1) month by
more than five (5) days, or more than one (1) month by more
than five (5) but not more than fifteen (15) days, the
unearned loan finance charge shall be increased by an
adjustment for each day by which the interval is less than
one (1) month and, at the option of the lender, may be
reduced by an adjustment for each day by which the interval
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is more than one (1) month; the adjustment for each day
shall be one-thirtieth (1/30) of that part of the loan finance
charge earned in the computational period prior to the due
date of the first scheduled installment assuming that period
to be one (1) month; and
(ii) if the interval to the final scheduled payment date is a
number of computational periods plus an additional number
of days less than a full month, the additional number of days
shall be considered a computational period only if sixteen
(16) days or more. This subparagraph applies whether or not
subparagraph (i) applies.
(b) Notwithstanding paragraph (a), if the computational period
is one (1) month, the number of days in the interval to the due
date of the first installment exceeds one (1) month by not more
than fifteen (15) days, and the schedule of payments is
otherwise regular, the lender, at the lender's option, may
exclude the extra days and the charge for the extra days in
computing the unearned loan finance charge; but if the lender
does so and a rebate is required before the due date of the first
scheduled installment, the lender shall compute the earned
charge for each elapsed day as one-thirtieth (1/30) of the
amount the earned charge would have been if the first interval
had been one (1) month.
(c) If the computational period is one (1) week and:
(i) if the number of days in the interval to the due date of the
first scheduled installment is less than five (5) days, or more
than nine (9) days, but not more than eleven (11) days, the
unearned loan finance charge shall be increased by an
adjustment for each day by which the interval is less than
seven (7) days and, at the option of the lender, may be
reduced by an adjustment for each day by which the interval
is more than seven (7) days; the adjustment for each day
shall be one-seventh (1/7) of that part of the loan finance
charge earned in the computational period prior to the due
date of the first scheduled installment, assuming that period
to be one (1) week; and
(ii) if the interval to the final scheduled payment date is a
number of computational periods plus an additional number
of days less than a full week, the additional number of days
shall be considered a computational period only if five (5)
days or more. This subparagraph applies whether or not
subparagraph (i) applies.
(6) If a deferral (IC 24-4.5-3-204) has been agreed to, the
unearned portion of the loan finance charge shall be computed
without regard to the deferral. The amount of deferral charge earned
at the date of prepayment shall also be calculated. If the deferral
charge earned is less than the deferral charge paid, the difference
shall be added to the unearned portion of the loan finance charge. If
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any part of a deferral charge has been earned but has not been paid,
that part shall be subtracted from the unearned portion of the loan
finance charge or shall be added to the unpaid balance.
(7) This section does not preclude the collection or retention by
the lender of delinquency charges (IC 24-4.5-3-203, repealed in
1994).
(8) If the maturity is accelerated for any reason and judgment is
obtained, the debtor is entitled to the same rebate as if payment had
been made on the date judgment is entered.
(9) Upon prepayment in full of a consumer loan by the proceeds
of consumer credit insurance (IC 24-4.5-4-103), the debtor or the
debtor's estate shall pay the same loan finance charge or receive the
same rebate as though the debtor had prepaid the agreement on the
date the proceeds of the insurance are paid to the lender, but no later
than ten (10) business days after satisfactory proof of loss is
furnished to the lender. This subsection applies whether or not the
loan is precomputed.
(10) Upon prepayment in full of a transaction with a term of more
than sixty-one (61) months, the unearned loan finance charge shall
be computed by applying the disclosed annual percentage rate that
would yield the loan finance charge originally contracted for to the
unpaid balances of the amount financed for the full computational
periods following the prepayment, as originally scheduled or as
deferred.
(Formerly: Acts 1971, P.L.366, SEC.4.) As amended by P.L.14-1992,
SEC.30; P.L.122-1994, SEC.22; P.L.2-1995, SEC.92; P.L.176-1996,
SEC.6.
(Part 3. Disclosure and Advertising)
IC 24-4.5-3-301
Disclosures required by Federal Consumer Credit Protection Act
Sec. 301. (1) For the purposes of this section, "consumer loan"
includes a loan that is a first lien mortgage transaction if the loan is
otherwise a consumer loan (IC 24-4.5-1-301.5(9)).
(2) The lender shall disclose to the debtor to whom credit is
extended with respect to a consumer loan the information required
by the Federal Consumer Credit Protection Act.
(3) For purposes of subsection (2), disclosures shall not be
required on a consumer loan if the transaction is exempt from the
Federal Consumer Credit Protection Act.
(Formerly: Acts 1971, P.L.366, SEC.4; Acts 1975, P.L.267, SEC.1.)
As amended by Acts 1981, P.L.218, SEC.6; Acts 1981, P.L.217,
SEC.2; P.L.247-1983, SEC.18; P.L.45-1995, SEC.11; P.L.35-2010,
SEC.50.
IC 24-4.5-3-302
Repealed
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(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-3-303
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-3-304
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-3-305
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-3-306
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-3-307
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-3-308
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-3-309
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-3-310
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-3-311
Repealed
(Repealed by P.L.247-1983, SEC.26.)
(Part 4. Limitations on Agreements and Practices)
IC 24-4.5-3-401
Scope
Sec. 401. Scope — This Part applies to consumer loans.
(Formerly: Acts 1971, P.L.366, SEC.4.)
IC 24-4.5-3-402
Balloon payments; compliance with Alternative Mortgage
Transaction Parity Act
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Sec. 402. (1) This section does not apply to a first lien mortgage
transaction.
(2) Except as provided in IC 24-9-4-3 with respect to a high cost
home loan (as defined in IC 24-9-2-8), with respect to a consumer
loan, other than one pursuant to a revolving loan account or one on
which only loan finance charges are payable prior to the time that the
final scheduled payment is due, if any scheduled payment is more
than twice as large as the average of earlier scheduled payments, the
debtor has the right to refinance the amount of that payment at the
time it is due without penalty. The terms of the refinancing shall be
no less favorable to the debtor than the terms of the original loan.
This section does not apply to the extent that the payment schedule
is adjusted to the seasonal or irregular income of the debtor.
(3) For the purposes of this section, "terms of the refinancing"
means:
(a) in the case of a fixed-rate consumer loan, the individual
payment amounts, the charges as a result of default by the
debtor, and the rate of the loan finance charge; and
(b) in the case of a variable rate consumer loan, the method
used to determine the individual payment amounts, the charges
as a result of default by the debtor, the method used to
determine the rate of the loan finance charge, the circumstances
under which the rate of the loan finance charge may increase,
and any limitations on the increase in the rate of the loan
finance charge.
(4) If a consumer loan is made under the authority of the
Alternative Mortgage Transaction Parity Act (12 U.S.C. 3802 et
seq.), the note evidencing the mortgage must contain a reference to
the applicable federal law.
(Formerly: Acts 1971, P.L.366, SEC.4.) As amended by
P.L.247-1983, SEC.19; P.L.213-2007, SEC.9; P.L.217-2007, SEC.8;
P.L.90-2008, SEC.8.
IC 24-4.5-3-403
No assignment of earnings
Sec. 403. No Assignment of Earnings — (1) A lender may not
take an assignment of earnings of the debtor for payment or as
security for payment of a debt arising out of a consumer loan or
otherwise. An assignment of earnings in violation of this section is
unenforceable by the assignee of the earnings and revocable by the
debtor. This section does not prohibit an employee from authorizing
deductions from his earnings if the authorization is revocable and is
otherwise permitted by law.
(2) A sale of unpaid earnings made in consideration of the
payment of money to or for the account of the seller of the earnings
is deemed to be a loan to him secured by an assignment of earnings.
(Formerly: Acts 1971, P.L.366, SEC.4.)
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IC 24-4.5-3-404
Attorney's fees
Sec. 404. With respect to a consumer loan the agreement may
provide for the payment by the debtor of reasonable attorney's fees
after default and referral to an attorney not a salaried employee of the
lender. A provision in violation of this section is unenforceable.
(Formerly: Acts 1971, P.L.366, SEC.4.) As amended by
P.L.152-1986, SEC.64; P.L.14-1992, SEC.31.
IC 24-4.5-3-405
Limitation on default charges
Sec. 405. Limitation on Default Charges — Except for reasonable
expenses incurred in realizing on a security interest, the agreement
with respect to a consumer loan may not provide for charges as a
result of default by the debtor other than those authorized by this
Article. A provision in violation of this section is unenforceable.
(Formerly: Acts 1971, P.L.366, SEC.4.)
IC 24-4.5-3-406
Notice of assignment
Sec. 406. Notice of Assignment — The debtor is authorized to
pay the original lender until he receives notification of assignment of
rights to payment pursuant to a consumer loan and that payment is to
be made to the assignee. A notification which does not reasonably
identify the rights assigned is ineffective. If requested by the debtor,
the assignee must seasonably furnish reasonable proof that the
assignment has been made and unless he does so the debtor may pay
the original lender.
(Formerly: Acts 1971, P.L.366, SEC.4.)
IC 24-4.5-3-407
Authorization to confess judgment prohibited
Sec. 407. Authorization to Confess Judgment Prohibited — A
debtor may not authorize any person to confess judgment on a claim
arising out of a consumer loan. An authorization in violation of this
section is void.
(Formerly: Acts 1971, P.L.366, SEC.4.)
IC 24-4.5-3-408
Time for crediting payments
Sec. 408. (1) This section also applies to revolving loan accounts.
(2) Except as provided in subsection (3) a creditor shall credit a
payment to a consumer's account as of the date of receipt, except
when a delay in crediting does not result in a finance charge or other
charge, including a late charge. A delay in posting does not violate
this section so long as the payment is credited as of the date of
receipt.
(3) If a creditor specifies requirements for the consumer to follow
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in making payments of the contract, payment coupon book, payment
coupon or statement, or periodic statement, but accepts a payment
that does not conform to the requirements, the creditor shall credit
the payment within two (2) days of receipt of the payment.
(4) If a creditor fails to credit a payment as required by this
section in time to avoid the imposition of a finance or other charge,
including a delinquency charge, the creditor shall adjust the
consumer's account so that the charges imposed are credited to the
consumer's account during the next payment period.
As added by P.L.163-1999, SEC.2.
(Part 5. Regulated and Supervised Loans)
IC 24-4.5-3-501
Definitions; "supervised loan"; "supervised lender"
Sec. 501. Definitions:
(1) "Supervised loan" means a consumer loan in which the rate of
the loan finance charge exceeds twenty-five percent (25%) per year
as determined according to the provisions on loan finance charge for
consumer loans in section 201 of this chapter.
(2) "Supervised lender" means a person authorized to make or
take assignments of supervised loans.
(Formerly: Acts 1971, P.L.366, SEC.4.) As amended by Acts 1982,
P.L.150, SEC.4; P.L.122-1994, SEC.23; P.L.91-2013, SEC.3.
IC 24-4.5-3-501.5
Persons also engaging in loan brokerage business; applicability of
loan broker statutes; examination by department; cooperation with
securities division
Sec. 501.5. (1) If a person licensed or required to be licensed
under section 502.1 of this chapter also engages in the loan
brokerage business, the person's loan brokerage business is subject
to the following sections of the Indiana Code and any rules adopted
to implement these sections:
(a) IC 23-2-5-9.
(b) IC 23-2-5-9.1.
(c) IC 23-2-5-15.
(d) IC 23-2-5-16.
(e) IC 23-2-5-17.
(f) IC 23-2-5-18.
(g) IC 23-2-5-18.5.
(h) IC 23-2-5-20.
(i) IC 23-2-5-23, except for IC 23-2-5-23(2)(B).
(j) IC 23-2-5-24.
(2) Loan broker business transactions engaged in by persons
licensed or required to be licensed under section 502.1 of this chapter
are subject to examination by the department and to the examination
fees described in section 503(8)(b) of this chapter. The department
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may cooperate with the securities division of the office of the
secretary of state in the department's examination of loan broker
business transactions and may use the securities division's examiners
to conduct examinations.
As added by P.L.186-2015, SEC.15.
IC 24-4.5-3-502
Authority to make, take assignment of, or collect consumer loans
other than mortgage transactions; license required; exempt
persons; branches; separate license required for small loans;
CPAP contracts
Sec. 502. (1) A person that is a:
(a) depository institution;
(b) subsidiary that is owned and controlled by a depository
institution and regulated by a federal banking agency; or
(c) credit union service organization;
may engage in Indiana in the making of consumer loans (including
small loans that are subject to IC 24-4.5-7) that are not mortgage
transactions without obtaining a license under this article.
(2) A collection agency licensed under IC 25-11-1 may engage in:
(a) taking assignments of consumer loans (including small loans
that are subject to IC 24-4.5-7) that are not mortgage
transactions; and
(b) undertaking the direct collection of payments from or the
enforcement of rights against debtors arising from consumer
loans (including small loans that are subject to IC 24-4.5-7) that
are not mortgage transactions;
in Indiana without obtaining a license under this article.
(3) A person that does not qualify under subsection (1) or (2) shall
acquire and retain a license under this chapter in order to regularly
engage in Indiana in the following actions with respect to consumer
loans that are not small loans (as defined in IC 24-4.5-7-104) or
mortgage transactions:
(a) The making of consumer loans.
(b) Taking assignments of consumer loans.
(c) Undertaking the direct collection of payments from or the
enforcement of rights against debtors arising from consumer
loans.
(4) A separate license under this chapter is required for each legal
entity that engages in Indiana in any activity described in subsection
(3). However, a separate license under this chapter is not required for
each branch of a legal entity licensed under this chapter to perform
an activity described in subsection (3).
(5) Except as otherwise provided in subsections (1) and (2), a
separate license under IC 24-4.5-7 is required in order to regularly
engage in Indiana in the following actions with respect to small loans
(as defined in IC 24-4.5-7-104):
(a) The making of small loans (as defined in IC 24-4.5-7-104).
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(b) Taking assignments of small loans (as defined in
IC 24-4.5-7-104).
(c) Undertaking the direct collection of payments from or the
enforcement of rights against debtors arising from small loans
(as defined in IC 24-4.5-7-104).
A person that seeks licensure under IC 24-4.5-7 in order to regularly
engage in Indiana in the actions set forth in this subsection shall
apply to the department for that license in the form and manner
prescribed by the department, and is subject to the same licensure
requirements and procedures as an applicant for a license to make
consumer loans (other than small loans or mortgage transactions)
under this section.
(6) A CPAP contract must comply with IC 24-12-2.
(Formerly: Acts 1971, P.L.366, SEC.4.) As amended by P.L.14-1992,
SEC.32; P.L.122-1994, SEC.24; P.L.176-1996, SEC.7; P.L.23-2000,
SEC.7; P.L.10-2006, SEC.6 and P.L.57-2006, SEC.6; P.L.35-2010,
SEC.51; P.L.186-2015, SEC.16; P.L.153-2016, SEC.6.
IC 24-4.5-3-502.1
Authority to make, take assignment of, or collect subordinate lien
mortgage transactions; license required; exempt persons;
registration with NMLSR; licensed mortgage loan originators;
applications for licensure; director's authority to contract with
NMLSR
Sec. 502.1. (1) A person that is a:
(a) depository institution;
(b) subsidiary that is owned and controlled by a depository
institution and regulated by a federal banking agency; or
(c) credit union service organization;
may engage in Indiana in the making of subordinate lien mortgage
transactions without obtaining a license under this article.
(2) A collection agency licensed under IC 25-11-1 or an
institution regulated by the Farm Credit Administration may engage
in:
(a) taking assignments of subordinate lien mortgage
transactions; and
(b) undertaking the direct collection of payments from or the
enforcement of rights against debtors arising from subordinate
lien mortgage transactions;
in Indiana without obtaining a license under this article.
(3) A person that does not qualify under subsection (1) or (2) shall
acquire and retain a license relating to subordinate lien mortgage
transactions under this chapter in order to regularly engage in Indiana
in the following actions with respect to subordinate lien mortgage
transactions:
(a) The making of subordinate lien mortgage loans.
(b) Taking assignments of subordinate lien mortgage loans.
(c) Undertaking the direct collection of payments from or the
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enforcement of rights against debtors arising from subordinate
lien mortgage loans.
(4) Each:
(a) creditor licensed by the department under this chapter to
engage in subordinate lien mortgage transactions; and
(b) entity that is exempt from licensing under this article or
under IC 24-4.4-1-202(b)(6)(a) and that:
(i) employs a licensed mortgage loan originator; or
(ii) sponsors under an exclusive written agreement, as
permitted by IC 24-4.4-1-202(b)(6)(a), a licensed mortgage
loan originator as an independent agent;
shall register with and maintain a valid unique identifier issued by
the NMLSR. Each licensed mortgage loan originator must be
employed by, or sponsored under an exclusive written agreement (as
permitted by IC 24-4.4-1-202(b)(6)(a)) and as an independent agent,
and associated with, a creditor licensed under this chapter to engage
in subordinate lien mortgage transactions or an exempt entity
described under subdivision (b) in the NMLSR in order to originate
loans.
(5) Applicants for a license to engage in subordinate lien
mortgage transactions must apply for a license under this chapter in
a form prescribed by the director. Each form:
(a) must contain content as set forth by rule, instruction, or
procedure of the director; and
(b) may be changed or updated as necessary by the director to
carry out the purposes of this article.
(6) To fulfill the purposes of this article, the director may
establish relationships or contracts with the NMLSR or other entities
designated by the NMLSR to:
(a) collect and maintain records; and
(b) process transaction fees or other fees;
related to licensees or other persons subject to this article.
(7) For the purpose of participating in the NMLSR, the director
or the department may:
(a) waive or modify, in whole or in part, by rule, regulation, or
order, any or all of the requirements of this article; and
(b) establish new requirements as reasonably necessary to
participate in the NMLSR.
As added by P.L.35-2010, SEC.52. Amended by P.L.103-2014,
SEC.5; P.L.186-2015, SEC.17.
IC 24-4.5-3-502.2
Use of NMLSR in department's licensing system; reporting of
information to NMLSR; confidentiality; director's authority to
enter agreements; waiver of privilege; processing fee; electronic
records
Sec. 502.2. (1) Subject to subsection (6), the director may
designate the NMLSR to serve as the sole entity responsible for:
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(a) processing applications and renewals for licenses required
under section 502 of this chapter;
(b) issuing unique identifiers for licensees and entities exempt
from licensing under section 502 of this chapter; and
(c) performing other services that the director determines are
necessary for the orderly administration of the department's
licensing system under section 502 of this chapter.
(2) Subject to the confidentiality provisions contained in
IC 5-14-3, this section, and IC 28-1-2-30, the director shall regularly
report to the NMLSR significant or recurring violations of this article
related to consumer loans that are not mortgage transactions,
including small loans under IC 24-4.5-7.
(3) Subject to the confidentiality provisions contained in
IC 5-14-3, this section, and IC 28-1-2-30, the director may report to
the NMLSR complaints received regarding licensees under section
502 of this chapter in connection with consumer loans that are not
mortgage transactions, including small loans under IC 24-4.5-7.
(4) The director may report to the NMLSR publicly adjudicated
licensure actions against licensees under section 502 of this chapter.
(5) The director shall establish a process in which persons
licensed in accordance with section 502 of this chapter may
challenge information reported to the NMLSR by the department.
(6) The director's authority to designate the NMLSR under
subsection (1) is subject to the following:
(a) Information stored in the NMLSR is subject to the
confidentiality provisions of IC 28-1-2-30 and IC 5-14-3. A
person may not:
(i) obtain information from the NMLSR unless the person is
authorized to do so by statute;
(ii) initiate any civil action based on information obtained
from the NMLSR if the information is not otherwise
available to the person under any other state law; or
(iii) initiate any civil action based on information obtained
from the NMLSR if the person could not have initiated the
action based on information otherwise available to the
person under any other state law.
(b) Documents, materials, and other forms of information in the
control or possession of the NMLSR that are confidential under
IC 28-1-2-30 and that are:
(i) furnished by the director, the director's designee, or a
licensee; or
(ii) otherwise obtained by the NMLSR;
are confidential and privileged by law and are not subject to
inspection under IC 5-14-3, subject to subpoena, subject to
discovery, or admissible in evidence in any civil action.
However, the director may use the documents, materials, or
other information available to the director in furtherance of any
action brought in connection with the director's duties under
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this article.
(c) Disclosure of documents, materials, and information:
(i) to the director; or
(ii) by the director;
under this subsection does not result in a waiver of any
applicable privilege or claim of confidentiality with respect to
the documents, materials, or information.
(d) Information provided to the NMLSR is subject to IC 4-1-11.
(e) This subsection does not limit or impair a person's right to:
(i) obtain information;
(ii) use information as evidence in a civil action or
proceeding; or
(iii) use information to initiate a civil action or proceeding;
if the information may be obtained from the director or the
director's designee under any law.
(f) The requirements under any federal law or IC 5-14-3
regarding the privacy or confidentiality of any information or
material provided to the NMLSR, and any privilege arising
under federal or state law, including the rules of any federal or
state court, with respect to the information or material, continue
to apply to the information or material after the information or
material has been disclosed to the NMLSR. The information
and material may be shared with all state and federal regulatory
officials with financial services industry oversight authority
without the loss of privilege or the loss of confidentiality
protections provided by federal law or IC 5-14-3.
(g) For purposes of this section, the director may enter
agreements or sharing arrangements with other governmental
agencies, the Conference of State Bank Supervisors, or other
associations representing governmental agencies as established
by rule or order of the director.
(h) Information or material that is subject to a privilege or
confidentiality under subdivision (f) is not subject to:
(i) disclosure under any federal or state law governing the
disclosure to the public of information held by an officer or
an agency of the federal government or the respective state;
or
(ii) subpoena, discovery, or admission into evidence, in any
private civil action or administrative process, unless with
respect to any privileged information or material held by the
NMLSR, the person to whom the information or material
pertains waives, in whole or in part, in the discretion of the
person, that privilege.
(i) Any provision of IC 5-14-3 that concerns the disclosure of:
(i) confidential supervisory information; or
(ii) any information or material described in subdivision (f);
and that is inconsistent with subdivision (f) is superseded by
this section.
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(j) This section does not apply with respect to information or
material that concerns the employment history of, and publicly
adjudicated disciplinary and enforcement actions against, a
person licensed in accordance with section 502 of this chapter
and described in section 503(2) of this chapter and that is
included in the NMLSR for access by the public.
(k) The director may require a licensee required to submit
information to the NMLSR to pay a processing fee considered
reasonable by the director. In determining whether an NMLSR
processing fee is reasonable, the director shall:
(i) require review of; and
(ii) make available;
the audited financial statements of the NMLSR.
(7) Notwithstanding any other provision of law, any:
(a) application, renewal, or other form or document that:
(i) relates to licenses issued under section 502 of this
chapter; and
(ii) is made or produced in an electronic format;
(b) document filed as an electronic record in a multistate
automated repository established and operated for the licensing
or registration of financial services entities and their employees;
or
(c) electronic record filed through the NMLSR;
is considered a valid original document when reproduced in paper
form by the department.
As added by P.L.137-2014, SEC.10.
IC 24-4.5-3-503
Applications for licenses; issuance; evidence of compliance; use of
NMLSR; denial of application; right to hearing; fees; license not
assignable or transferable
Sec. 503. (1) The department shall receive and act on all
applications for licenses to make consumer loans. Applications must
be as prescribed by the director of the department of financial
institutions. If, at any time, the information or record contained in:
(a) an application filed under section 502 of this chapter or
section 502.1 of this chapter; or
(b) a renewal application filed under section 503.6 of this
chapter;
is or becomes inaccurate or incomplete in a material respect, the
applicant shall promptly file a correcting amendment with the
department.
(2) A license shall not be issued unless the department finds that
the professional training and experience, financial responsibility,
character, and fitness of:
(a) the applicant and any significant affiliate of the applicant;
(b) each executive officer, director, or manager of the applicant,
or any other individual having a similar status or performing a
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similar function for the applicant; and
(c) if known, each person directly or indirectly owning of
record or owning beneficially at least ten percent (10%) of the
outstanding shares of any class of equity security of the
applicant;
are such as to warrant belief that the business will be operated
honestly and fairly within the purposes of this article.
(3) The director is entitled to request evidence of compliance with
this section at:
(a) the time of application;
(b) the time of renewal of a license; or
(c) any other time considered necessary by the director.
(4) Evidence of compliance with this section concerning a person
licensed under section 502 of this chapter may include and for a
person licensed under section 502.1 of this chapter must include:
(a) criminal background checks as described in section 503.1 of
this chapter, including a national criminal history background
check (as defined in IC 10-13-3-12) by the Federal Bureau of
Investigation, for any individual described in subsection (2);
(b) credit histories as described in section 503.2 of this chapter;
(c) surety bond requirements as described in section 503.3 of
this chapter;
(d) a review of licensure actions in Indiana and other states; and
(e) other background checks considered necessary by the
director.
(5) For purposes of this section and in order to reduce the points
of contact that the director may have to maintain under this section,
the director may use the NMLSR as a channeling agent for
requesting and distributing information to and from any source as
directed by the director.
(6) The department may deny an application under this section if
the director of the department determines that the application was
submitted for the benefit of, or on behalf of, a person who does not
qualify for a license.
(7) Upon written request, the applicant is entitled to a hearing on
the question of the qualifications of the applicant for a license as
provided in IC 4-21.5.
(8) The applicant shall pay the following fees at the time
designated by the department:
(a) An initial license fee as established by the department under
IC 28-11-3-5.
(b) Examination fees as established by the department under
IC 28-11-3-5.
(c) An annual renewal fee as established by the department
under IC 28-11-3-5.
(9) A fee as established by the department under IC 28-11-3-5
may be charged for each day a fee under subsection (8)(b) or (8)(c)
is delinquent.
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(10) The licensee may deduct the fees required under subsection
(8)(a) and (8)(c) from the filing fees paid under IC 24-4.5-6-203.
(11) Except in a transaction approved under section 515 of this
chapter, a license issued under this section is not assignable or
transferable.
(Formerly: Acts 1971, P.L.366, SEC.4.) As amended by P.L.14-1992,
SEC.33; P.L.122-1994, SEC.25; P.L.80-1998, SEC.7; P.L.23-2000,
SEC.8; P.L.10-2006, SEC.7 and P.L.57-2006, SEC.7; P.L.213-2007,
SEC.10; P.L.217-2007, SEC.9; P.L.3-2008, SEC.174; P.L.90-2008,
SEC.9; P.L.35-2010, SEC.53; P.L.89-2011, SEC.17; P.L.27-2012,
SEC.19.
IC 24-4.5-3-503.1
National criminal history background check; fingerprints;
payment of fees or costs; use of NMLSR
Sec. 503.1. (1) When the director requests a national criminal
history background check under section 503(4)(a) of this chapter for
an individual described in section 503(2) of this chapter, the director
shall require the individual to submit fingerprints to the department,
state police department, or NMLSR, as directed, at the time evidence
of compliance is requested under section 503(3) of this chapter. The
individual to whom the request is made shall pay any fees or costs
associated with processing and evaluating the fingerprints and the
national criminal history background check. The national criminal
history background check may be used by the director to determine
the individual's compliance with this section. The director or the
department may not release the results of the national criminal
history background check to any private entity.
(2) For purposes of this section and in order to reduce the points
of contact that the Federal Bureau of Investigation may have to
maintain for purposes of this section, the director may use the
NMLSR as a channeling agent for requesting information from and
distributing information to the United States Department of Justice
or any governmental agency.
As added by P.L.35-2010, SEC.54.
IC 24-4.5-3-503.2
Credit reports; payment of fees or costs; demonstrated financial
responsibility; considerations
Sec. 503.2. (1) If the director requests a credit report for an
individual described in section 503(2) of this chapter, the individual
to whom the request is made shall pay any fees or costs associated
with procuring the report.
(2) The individual must submit personal history and experience
information in a form prescribed by the NMLSR, including the
submission of authorization for the NMLSR or the director to obtain
an independent credit report obtained from a consumer reporting
agency described in Section 603(p) of the Fair Credit Reporting Act
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(15 U.S.C. 1681a(p)).
(3) The director may consider one (1) or more of the following
when determining if an individual has demonstrated financial
responsibility:
(a) Bankruptcies filed within the last ten (10) years.
(b) Current outstanding judgments, except judgments solely as
a result of medical expenses.
(c) Current outstanding tax liens or other government liens or
filings.
(d) Foreclosures within the past three (3) years.
(e) A pattern of serious delinquent accounts within the past
three (3) years.
As added by P.L.35-2010, SEC.55.
IC 24-4.5-3-503.3
Surety bond; requirements; amount; termination; liability; notices
Sec. 503.3. (1) Each:
(a) creditor licensed by the department under this article; and
(b) person that is exempt from licensing under this article or
under IC 24-4.4-1-202(b)(6)(a) and that:
(i) employs a licensed mortgage loan originator; or
(ii) sponsors under an exclusive written agreement, as
permitted by IC 24-4.4-1-202(b)(6)(a), a licensed mortgage
loan originator as an independent agent;
must be covered by a surety bond in accordance with this section.
(2) A surety bond must:
(a) provide coverage for:
(i) a creditor described in subsection (1)(a); and
(ii) an exempt person described in subsection (1)(b);
in an amount as prescribed in subsection (4);
(b) be in a form as prescribed by the director;
(c) be in effect:
(i) during the term of the creditor's license under this
chapter; or
(ii) at any time during which the person exempt from
licensing under this article or under IC 24-4.4-1-202(b)(6)(a)
employs a licensed mortgage loan originator, or sponsors
under an exclusive written agreement (as permitted by
IC 24-4.4-1-202(b)(6)(a)) a licensed mortgage loan
originator as an independent agent;
as applicable;
(d) remain in effect during the two (2) years after:
(i) the creditor ceases offering financial services to
individuals in Indiana; or
(ii) the person exempt from licensing under this article or
under IC 24-4.4-1-202(b)(6)(a) ceases to employ a licensed
mortgage loan originator, or ceases to sponsor under an
exclusive written agreement (as permitted by
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IC 24-4.4-1-202(b)(6)(a)) a licensed mortgage loan
originator as an independent agent, or to offer financial
services to individuals in Indiana, whichever is later;
as applicable;
(e) be payable to the department for the benefit of:
(i) the state; and
(ii) individuals who reside in Indiana when they agree to
receive financial services from the creditor or the person
exempt from licensing under this article or under
IC 24-4.4-1-202(b)(6)(a), as applicable;
(f) be issued by a bonding, surety, or insurance company
authorized to do business in Indiana and rated at least "A-" by
at least one (1) nationally recognized investment rating service;
and
(g) have payment conditioned upon:
(i) the creditor's or any of the creditor's licensed mortgage
loan originators'; or
(ii) the exempt person's or any of the exempt person's
licensed mortgage loan originators';
noncompliance with or violation of this chapter, 750 IAC 9, or
other federal or state laws or regulations applicable to mortgage
lending.
(3) The director may adopt rules or guidance documents with
respect to the requirements for surety bonds as necessary to
accomplish the purposes of this article.
(4) The penal sum of the surety bond shall be maintained in an
amount that reflects the dollar amount of mortgage transactions
originated as determined by the director. If the principal amount of
a surety bond required under this section is reduced by payment of
a claim or judgment, the creditor or exempt person for whom the
bond is issued shall immediately notify the director of the reduction
and, not later than thirty (30) days after notice by the director, file a
new or an additional surety bond in an amount set by the director.
The amount of the new or additional bond set by the director must be
at least the amount of the bond before payment of the claim or
judgment.
(5) If for any reason a surety terminates a bond issued under this
section, the creditor or the exempt person shall immediately notify
the department and file a new surety bond in an amount determined
by the director.
(6) Cancellation of a surety bond issued under this section does
not affect any liability incurred or accrued during the period when
the surety bond was in effect.
(7) The director may obtain satisfaction from a surety bond issued
under this section if the director incurs expenses, issues a final order,
or recovers a final judgment under this chapter.
(8) Notices required under this section must be in writing and
delivered by certified mail, return receipt requested and postage
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prepaid, or by overnight delivery using a nationally recognized
carrier.
As added by P.L.35-2010, SEC.56. Amended by P.L.216-2013,
SEC.10; P.L.103-2014, SEC.6.
IC 24-4.5-3-503.4
Use of NMLSR in department's licensing system for subordinate
lien mortgage transactions; reporting of information to NMLSR;
confidentiality; director's authority to enter agreements; waiver of
privilege; processing fee; electronic records
Sec. 503.4. (1) Subject to subsection (6), the director shall
designate the NMLSR to serve as the sole entity responsible for:
(a) processing applications and renewals for licenses under
section 502.1 of this chapter;
(b) issuing unique identifiers for licensees under section 502.1
of this chapter and for entities exempt from licensing under this
article that employ licensed mortgage loan originators; and
(c) performing other services that the director determines
necessary for the orderly administration of the department's
licensing system under section 502.1 of this chapter.
(2) Subject to the confidentiality provisions contained in
IC 5-14-3, this section, and IC 28-1-2-30, the director shall regularly
report significant or recurring violations of this article related to
subordinate lien mortgage transactions to the NMLSR.
(3) Subject to the confidentiality provisions contained in
IC 5-14-3, this section, and IC 28-1-2-30, the director may report
complaints received regarding licensees under this article related to
subordinate lien mortgage transactions to the NMLSR.
(4) The director may report publicly adjudicated licensure actions
against licensees under section 502.1 of this chapter to the NMLSR.
(5) The director shall establish a process in which persons
licensed in accordance with section 502.1 of this chapter may
challenge information reported to the NMLSR by the department.
(6) The director's authority to designate the NMLSR under
subsection (1) is subject to the following:
(a) Information stored in the NMLSR is subject to the
confidentiality provisions of IC 28-1-2-30 and IC 5-14-3. A
person may not:
(i) obtain information from the NMLSR unless the person is
authorized to do so by statute;
(ii) initiate any civil action based on information obtained
from the NMLSR if the information is not otherwise
available to the person under any other state law; or
(iii) initiate any civil action based on information obtained
from the NMLSR if the person could not have initiated the
action based on information otherwise available to the
person under any other state law.
(b) Documents, materials, and other forms of information in the
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control or possession of the NMLSR that are confidential under
IC 28-1-2-30 and that are:
(i) furnished by the director, the director's designee, or a
licensee; or
(ii) otherwise obtained by the NMLSR;
are confidential and privileged by law and are not subject to
inspection under IC 5-14-3, subject to subpoena, subject to
discovery, or admissible in evidence in any civil action.
However, the director may use the documents, materials, or
other information available to the director in furtherance of any
action brought in connection with the director's duties under
this article.
(c) Disclosure of documents, materials, and information:
(i) to the director; or
(ii) by the director;
under this subsection does not result in a waiver of any
applicable privilege or claim of confidentiality with respect to
the documents, materials, or information.
(d) Information provided to the NMLSR is subject to IC 4-1-11.
(e) This subsection does not limit or impair a person's right to:
(i) obtain information;
(ii) use information as evidence in a civil action or
proceeding; or
(iii) use information to initiate a civil action or proceeding;
if the information may be obtained from the director or the
director's designee under any law.
(f) Except as otherwise provided in the federal Housing and
Economic Recovery Act of 2008, Public Law 110-289, Section
1512, the requirements under any federal law or IC 5-14-3
regarding the privacy or confidentiality of any information or
material provided to the NMLSR, and any privilege arising
under federal or state law, including the rules of any federal or
state court, with respect to the information or material, continue
to apply to the information or material after the information or
material has been disclosed to the NMLSR. The information
and material may be shared with all state and federal regulatory
officials with mortgage industry oversight authority without the
loss of privilege or the loss of confidentiality protections
provided by federal law or IC 5-14-3.
(g) For purposes of this section, the director may enter
agreements or sharing arrangements with other governmental
agencies, the Conference of State Bank Supervisors, the
American Association of Residential Mortgage Regulators, or
other associations representing governmental agencies as
established by rule or order of the director.
(h) Information or material that is subject to a privilege or
confidentiality under subdivision (f) is not subject to:
(i) disclosure under any federal or state law governing the
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disclosure to the public of information held by an officer or
an agency of the federal government or the respective state;
or
(ii) subpoena, discovery, or admission into evidence, in any
private civil action or administrative process, unless with
respect to any privilege held by the NMLSR with respect to
the information or material, the person to whom the
information or material pertains waives, in whole or in part,
in the discretion of the person, that privilege.
(i) Any provision of IC 5-14-3 that concerns the disclosure of:
(i) confidential supervisory information; or
(ii) any information or material described in subdivision (f);
and that is inconsistent with subdivision (f) is superseded by
this section.
(j) This section does not apply with respect to information or
material that concerns the employment history of, and publicly
adjudicated disciplinary and enforcement actions against, a
person licensed in accordance with section 502.1 of this chapter
and described in section 503(2) of this chapter and that is
included in the NMLSR for access by the public.
(k) The director may require a licensee required to submit
information to the NMLSR to pay a processing fee considered
reasonable by the director. In determining whether an NMLSR
processing fee is reasonable, the director shall:
(i) require review of; and
(ii) make available;
the audited financial statements of the NMLSR.
(7) Notwithstanding any other provision of law, any:
(a) application, renewal, or other form or document that:
(i) relates to licenses issued under this article; and
(ii) is made or produced in an electronic format;
(b) document filed as an electronic record in a multistate
automated repository established and operated for the licensing
or registration of mortgage lenders, brokers, or loan originators;
or
(c) electronic record filed through the NMLSR;
is considered a valid original document when reproduced in paper
form by the department.
As added by P.L.35-2010, SEC.57. Amended by P.L.27-2012,
SEC.20.
IC 24-4.5-3-503.5
Repealed
(As added by P.L.176-1996, SEC.8. Repealed by P.L.35-2010,
SEC.209.)
IC 24-4.5-3-503.6
License renewal; revocation or suspension of license not renewed;
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reinstatement or appeal; correcting amendments
Sec. 503.6. (1) A license issued under this article must be renewed
not later than December 31 of each calendar year. A license issued
under section 502.1 of this chapter must be renewed through the
NMLSR. The minimum standards for license renewal for a creditor
include the following:
(a) If the creditor is licensed in accordance with section 502 of
this chapter, the creditor has:
(i) paid all required fees for renewal of the license; and
(ii) filed all reports and information required by the director.
(b) If the creditor is licensed under section 502.1 of this chapter,
the following:
(i) The creditor has continued to meet the surety bond
requirement under section 503.3 of this chapter.
(ii) The creditor has filed the creditor's call report in a
manner that satisfies section 505(4) of this chapter.
(iii) The creditor has paid all required fees for renewal of the
license.
(iv) The creditor and individuals described in section 503(2)
of this chapter have certified to the department that they
continue to meet all the standards for licensing established
under section 503 of this chapter.
(v) The creditor has filed all reports and information
required by the director.
(vi) The creditor has provided in the creditor's renewal
application any information describing material changes in
the information contained in the creditor's original
application for licensure, or in any previous application,
including any previous renewal application, along with any
other information the director requires in order to evaluate
the renewal of the license issued under this article.
(2) A license issued by the department authorizing a person to
engage as a creditor in consumer loans or consumer credit sales
under this article may be revoked or suspended by the department if
the person fails to:
(a) file any renewal form required by the department; or
(b) pay any license renewal fee described under section
503(8)(c) of this chapter;
not later than sixty (60) days after the due date.
(3) A person whose license is revoked or suspended under this
section may do either of the following:
(a) Pay all delinquent fees and apply for reinstatement of the
license.
(b) Appeal the revocation or suspension to the department for
an administrative review under IC 4-21.5-3.
Pending the decision from a hearing under IC 4-21.5-3 concerning
license revocation or suspension, a license remains in force.
(4) If, at any time, the information or record contained in:
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(a) an original application for licensure filed under section 502
or 502.1 of this chapter; or
(b) a renewal application filed under this section;
is or becomes inaccurate or incomplete in a material respect, the
applicant shall promptly file a correcting amendment with the
department.
As added by P.L.35-2010, SEC.58. Amended by P.L.89-2011,
SEC.18; P.L.27-2012, SEC.21.
IC 24-4.5-3-504
Suspension or revocation of license; order to show cause; order of
suspension or revocation; relinquishment of license; preexisting
contracts; emergency order for revocation
Sec. 504. (1) The department may issue to a person licensed to:
(a) make consumer loans; or
(b) engage in consumer credit sales that are mortgage
transactions;
an order to show cause why the license should not be revoked or
suspended for a period determined by the department.
(2) An order issued under subsection (1) must:
(a) include:
(i) a statement of the place, date, and time for a meeting with
the department, which date may not be less than ten (10)
days from the date of the order;
(ii) a description of the action contemplated by the
department; and
(iii) a statement of the facts or conduct supporting the
issuance of the order; and
(b) be accompanied by a notice stating that the licensee is
entitled to:
(i) a reasonable opportunity to be heard; and
(ii) show the licensee's compliance with all lawful
requirements for retention of the license;
at the meeting described in subdivision (a)(i).
(3) After the meeting described in subsection (2)(a)(i), the
department may revoke or suspend the license if the department finds
that:
(a) the licensee has repeatedly and willfully violated:
(i) this article or any applicable rule, order, or guidance
document adopted or issued by the department; or
(ii) any other state or federal laws, rules, or regulations
applicable to consumer credit transactions;
(b) the licensee does not meet the licensing qualifications under
section 503 of this chapter;
(c) the licensee obtained the license for the benefit of, or on
behalf of, a person who does not qualify for the license;
(d) the licensee knowingly or intentionally made material
misrepresentations to, or concealed material information from,
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the department; or
(e) facts or conditions exist that, had they existed at the time the
licensee applied for the license, would have been grounds for
the department to deny the issuance of the license.
(4) Whenever the department revokes or suspends a license, the
department shall enter an order to that effect and forthwith notify the
licensee of:
(a) the revocation or suspension;
(b) if a suspension has been ordered, the duration of the
suspension;
(c) the procedure for appealing the revocation or suspension
under IC 4-21.5-3-6; and
(d) any other terms and conditions that apply to the revocation
or suspension.
Not later than five (5) days after the entry of the order the department
shall deliver to the licensee a copy of the order and the findings
supporting the order.
(5) Any person holding a license to make consumer loans may
relinquish the license by notifying the department in writing of its
relinquishment, but this relinquishment does not affect the person's
liability for acts previously committed and coming within the scope
of this article.
(6) If the director determines it is in the public interest, the
director may pursue revocation of a license of a licensee that has
relinquished the license under subsection (5).
(7) If a person's license is revoked, suspended, or relinquished, the
revocation, suspension, or relinquishment does not impair or affect
any obligation owed by any person under any preexisting lawful
contract.
(8) If the director has just cause to believe an emergency exists
from which it is necessary to protect the interests of the public, the
director may proceed with the revocation of a license through an
emergency or another temporary order under IC 4-21.5-4.
(Formerly: Acts 1971, P.L.366, SEC.4.) As amended by P.L.14-1992,
SEC.34; P.L.176-1996, SEC.9; P.L.80-1998, SEC.8; P.L.213-2007,
SEC.11; P.L.217-2007, SEC.10; P.L.90-2008, SEC.10; P.L.35-2010,
SEC.59; P.L.27-2012, SEC.22; P.L.186-2015, SEC.18.
IC 24-4.5-3-505
Record keeping; use of unique identifier on forms and documents;
use of examination and regulatory software; submitting call
reports to NMLSR; composite reports; notice to department of
certain events or changes
Sec. 505. (1) Every creditor required to be licensed under this
article shall maintain records in conformity with generally accepted
accounting principles and practices in a manner that will enable the
department to determine whether the licensee is complying with the
provisions of this article. The record keeping system of a licensee
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shall be sufficient if the licensee makes the required information
reasonably available. The department shall determine the sufficiency
of the records and whether the licensee has made the required
information reasonably available. The department shall be given free
access to the records wherever located. The records pertaining to any
loan shall be retained for two (2) years after making the final entry
relating to the loan, but in the case of a revolving loan account the
two (2) years is measured from the date of each entry. A person
licensed or required to be licensed under this chapter is subject to
IC 28-1-2-30.5 with respect to any records maintained by the person.
A person that is exempt from licensing under this article or under
IC 24-4.4-1-202(b)(6)(a) and that sponsors one (1) or more licensed
mortgage loan originators as independent agents under an exclusive
written agreement, as permitted by IC 24-4.4-1-202(b)(6)(a), shall:
(a) cooperate with the department; and
(b) provide access to records and documents;
as required by the department in carrying out examinations of the
activities of the licensed mortgage loan originators sponsored by the
federal savings bank.
(2) The unique identifier of any person originating a mortgage
transaction must be clearly shown on all mortgage transaction
application forms and any other documents as required by the
director.
(3) Every licensee that engages in mortgage transactions shall use
automated examination and regulatory software designated by the
director, including third party software. Use of the software
consistent with guidance documents and policies issued by the
director is not a violation of IC 28-1-2-30.
(4) Each:
(a) creditor that is licensed by the department under this article
and that engages in mortgage transactions; and
(b) entity that is exempt from licensing under this article or
under IC 24-4.4-1-202(b)(6)(a) and that:
(i) employs one (1) or more licensed mortgage loan
originators; or
(ii) sponsors under an exclusive written agreement, as
permitted by IC 24-4.4-1-202(b)(6)(a), one (1) or more
licensed mortgage loan originators as independent agents;
shall submit to the NMLSR a call report, which must be in the form
and contain information the NMLSR requires.
(5) Every creditor required to be licensed under this article shall
file with the department a composite report as required by the
department, but not more frequently than annually, in the form
prescribed by the department relating to all consumer loans made by
the licensee. The department shall consult with comparable officials
in other states for the purpose of making the kinds of information
required in the reports uniform among the states. Information
contained in the reports shall be confidential and may be published
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only in composite form. The department may impose a fee in an
amount fixed by the department under IC 28-11-3-5 for each day that
a creditor fails to file the report required by this subsection.
(6) A creditor required to be licensed under this article shall file
notification with the department if the licensee:
(a) has a change in name, address, or principals;
(b) opens a new branch, closes an existing branch, or relocates
an existing branch;
(c) files for bankruptcy or reorganization; or
(d) is subject to revocation or suspension proceedings by a state
or governmental authority with regard to the licensee's
activities;
not later than thirty (30) days after the date of the event described in
this subsection.
(7) Every licensee shall file notification with the department if the
licensee or any director, executive officer, or manager of the licensee
has been convicted of a felony under the laws of Indiana or any other
jurisdiction. The licensee shall file the notification required by this
subsection not later than thirty (30) days after the date of the event
described in this subsection.
(Formerly: Acts 1971, P.L.366, SEC.4.) As amended by P.L.14-1992,
SEC.35; P.L.122-1994, SEC.26; P.L.45-1995, SEC.12;
P.L.172-1997, SEC.5; P.L.63-2001, SEC.3 and P.L.134-2001,
SEC.3; P.L.213-2007, SEC.12; P.L.217-2007, SEC.11; P.L.90-2008,
SEC.11; P.L.35-2010, SEC.60; P.L.27-2012, SEC.23; P.L.103-2014,
SEC.7.
IC 24-4.5-3-505.5
Automated loan machines
Sec. 505.5. (a) As used in this section, "automated loan machine"
means an unmanned machine that performs routine lending
functions.
(b) A licensee may make loans through an automated loan
machine at an offsite location if the licensee:
(1) notifies the department in writing of the existence and
location of the automated loan machine;
(2) maintains at a location licensed or approved by the
department the books, accounts, records, and files concerning
transactions performed through the automated loan machine;
and
(3) posts at the offsite location where the automated loan
machine is located the:
(A) address where the books, accounts, records and files are
located; and
(B) telephone number at which the licensee may be
contacted.
As added by P.L.172-1997, SEC.6.
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IC 24-4.5-3-506
Repealed
(Formerly: Acts 1971, P.L.366, SEC.4. As amended by
P.L.14-1992, SEC.36; P.L.45-1995, SEC.13. Repealed by
P.L.35-2010, SEC.209.)
IC 24-4.5-3-507
Repealed
(Formerly: Acts 1971, P.L.366, SEC.4. As amended by
P.L.152-1986, SEC.65; P.L.7-1987, SEC.106; P.L.14-1992, SEC.37.
Repealed by P.L.35-2010, SEC.209.)
IC 24-4.5-3-508
Loan finance charge and origination fee for supervised loans
Sec. 508. Loan Finance Charge for Supervised Loans ) (1) With
respect to a supervised loan, including a loan pursuant to a revolving
loan account, a supervised lender may contract for and receive a loan
finance charge not exceeding that permitted by this section.
(2) The loan finance charge, calculated according to the actuarial
method, may not exceed the equivalent of the greater of:
(a) the total of:
(i) thirty-six percent (36%) per year on that part of the
unpaid balances of the principal which is two thousand
dollars ($2,000) or less;
(ii) twenty-one percent (21%) per year on that part of the
unpaid balances of the principal which is more than two
thousand dollars ($2,000) but does not exceed four thousand
dollars ($4,000); and
(iii) fifteen percent (15%) per year on that part of the unpaid
balances of the principal which is more than four thousand
dollars ($4,000); or
(b) twenty-five percent (25%) per year on the unpaid balances
of the principal.
(3) This section does not limit or restrict the manner of
contracting for the loan finance charge, whether by way of add-on,
discount, or otherwise, so long as the rate of the loan finance charge
does not exceed that permitted by this section. If the loan is
precomputed:
(a) the loan finance charge may be calculated on the assumption
that all scheduled payments will be made when due; and
(b) the effect of prepayment is governed by the provisions on
rebate upon prepayment in section 210 of this chapter.
(4) The term of a loan for the purposes of this section commences
on the date the loan is made. Differences in the lengths of months are
disregarded, and a day may be counted as one-thirtieth (1/30) of a
month. Subject to classifications and differentiations the lender may
reasonably establish, a part of a month in excess of fifteen (15) days
may be treated as a full month if periods of fifteen (15) days or less
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are disregarded and that procedure is not consistently used to obtain
a greater yield than would otherwise be permitted.
(5) Subject to classifications and differentiations the lender may
reasonably establish, the lender may make the same loan finance
charge on all principal amounts within a specified range. A loan
finance charge does not violate subsection (2) if:
(a) when applied to the median amount within each range, it
does not exceed the maximum permitted in subsection (2); and
(b) when applied to the lowest amount within each range, it
does not produce a rate of loan finance charge exceeding the
rate calculated according to paragraph (a) by more than eight
percent (8%) of the rate calculated according to paragraph (a).
(6) The amounts of two thousand dollars ($2,000) and four
thousand dollars ($4,000) in subsection (2) and thirty dollars ($30)
in subsection (7) are subject to change pursuant to the provisions on
adjustment of dollar amounts (IC 24-4.5-1-106). However,
notwithstanding IC 24-4.5-1-106(1), for the adjustment of the amount
of thirty dollars ($30), the Reference Base Index to be used is the
Index for October 1992. Notwithstanding IC 24-4.5-1-106(1), for the
adjustment of the amounts of two thousand dollars ($2,000) and four
thousand dollars ($4,000), the Reference Base Index to be used is the
Index for October 2012.
(7) With respect to a supervised loan not made pursuant to a
revolving loan account, the lender may contract for and receive a
minimum loan finance charge of not more than thirty dollars ($30).
The minimum loan finance charge allowed under this subsection may
be imposed only if the lender does not assess a loan origination fee
under subsection (8) and:
(a) the debtor prepays in full a consumer loan, refinancing, or
consolidation, regardless of whether the loan, refinancing, or
consolidation is precomputed;
(b) the loan, refinancing, or consolidation prepaid by the debtor
is subject to a loan finance charge that:
(i) is contracted for by the parties; and
(ii) does not exceed the rate prescribed in subsection (2); and
(c) the loan finance charge earned at the time of prepayment is
less than the minimum loan finance charge contracted for under
this subsection.
(8) Except as provided in subsection (7), in addition to the loan
finance charge provided for in this section and to any other charges
and fees permitted by this chapter, the lender may contract for and
receive a loan origination fee of not more than fifty dollars ($50).
(9) The loan origination fee provided for in subsection (8) is not
subject to refund or rebate.
(10) Notwithstanding subsections (8) and (9), in the case of a
supervised loan that is not secured by an interest in land, if a lender
retains any part of a loan origination fee charged on a loan that is
paid in full by a new loan from the same lender, the following apply:
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(a) If the loan is paid in full by the new loan within three (3)
months after the date of the prior loan, the lender may not
charge a loan origination fee on the new loan, or, in the case of
a revolving loan, on the increased credit line.
(b) The lender may not assess more than two (2) loan
origination fees in any twelve (12) month period.
(11) In the case of a supervised loan that is secured by an interest
in land, this section does not prohibit a lender from contracting for
and receiving a fee for preparing deeds, mortgages, reconveyances,
and similar documents under section 202(1)(d)(ii) of this chapter, in
addition to the loan origination fee provided for in subsection (8).
(Formerly: Acts 1971, P.L.366, SEC.4.) As amended by Acts 1981,
P.L.219, SEC.4; Acts 1982, P.L.149, SEC.4; Acts 1982, P.L.150,
SEC.5; P.L.14-1992, SEC.38; P.L.122-1994, SEC.27; P.L.10-2006,
SEC.8 and P.L.57-2006, SEC.8; P.L.145-2008, SEC.28;
P.L.91-2013, SEC.4.
IC 24-4.5-3-508.5
Repealed
(Repealed by Acts 1982, P.L.150, SEC.8.)
IC 24-4.5-3-509
Use of multiple agreements
Sec. 509. Use of Multiple Agreements. — With respect to a
consumer loan, no lender may permit any person, or husband and
wife, to become obligated in any way under more than one loan
agreement with the lender or with a person related to the lender, with
intent to obtain a higher rate of loan finance charge than would
otherwise be permitted by the provisions on loan finance charge for
supervised loans (IC 24-4.5-3-508) or to avoid disclosure of an
annual percentage rate pursuant to the provisions on disclosure (Part
3). The excess amount of loan finance charge provided for in
agreements in violation of this section is an excess charge for the
purposes of the provisions on effect of violations on rights of parties
(IC 24-4.5-5-202) and the provisions on civil actions by the
department (IC 24-4.5-6-113).
(Formerly: Acts 1971, P.L.366, SEC.4.) As amended by P.L.14-1992,
SEC.39.
IC 24-4.5-3-510
Restrictions on interest in land as security
Sec. 510. Restrictions on Interest in Land as Security — (1) With
respect to a supervised loan in which the principal is four thousand
dollars ($4,000) or less, a lender may not contract for an interest in
land as security. A security interest taken in violation of this section
is void.
(2) The amount of four thousand dollars ($4,000) in subsection
(1) is subject to change pursuant to the provisions on adjustment of
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dollar amounts (IC 24-4.5-1-106). However, notwithstanding
IC 24-4.5-1-106(1), the Reference Base Index to be used under this
subsection is the Index for October 2012.
(Formerly: Acts 1971, P.L.366, SEC.4.) As amended by
P.L.137-2014, SEC.11; P.L.186-2015, SEC.19.
IC 24-4.5-3-511
Regular schedule of payments; maximum loan term
Sec. 511. Regular Schedule of Payments; Maximum Loan Term
— (1) Supervised loans not made pursuant to a revolving loan
account and in which the principal is four thousand dollars ($4,000)
or less are payable in a single instalment or shall be scheduled to be
payable in substantially equal instalments that are payable at equal
periodic intervals, except to the extent that the schedule of payments
is adjusted to the seasonal or irregular income of the debtor, and:
(a) over a period of not more than thirty-seven (37) months if
the principal is more than three hundred dollars ($300), or
(b) over a period of not more than twenty-five (25) months if
the principal is three hundred dollars ($300) or less.
(2) The amounts of three hundred dollars ($300) and four
thousand dollars ($4,000) in subsection (1) are subject to change
pursuant to the provisions on adjustment of dollar amounts (IC
24-4.5-1-106). However, notwithstanding IC 24-4.5-1-106(1), the
Reference Base Index to be used with respect to the amount of:
(1) three hundred dollars ($300) is the Index for October 1992;
and
(2) four thousand dollars ($4,000) is the Index for October
2012.
(Formerly: Acts 1971, P.L.366, SEC.4.) As amended by Acts 1982,
P.L.149, SEC.5; P.L.137-2014, SEC.12; P.L.186-2015, SEC.20.
IC 24-4.5-3-512
Conduct of business other than making loans
Sec. 512. Conduct of Business Other than Making Loans — A
licensee may carry on other business at a location where he makes
consumer loans unless he carries on other business for the purpose
of evasion or violation of this Article.
(Formerly: Acts 1971, P.L.366, SEC.4.)
IC 24-4.5-3-513
Application of other provisions
Sec. 513. Application of Other Provisions — Except as otherwise
provided, all provisions of this Article applying to consumer loans
apply to supervised loans.
(Formerly: Acts 1971, P.L.366, SEC.4.)
IC 24-4.5-3-514
Repealed
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(Repealed by P.L.14-1992, SEC.165.)
IC 24-4.5-3-515
Change in control of creditor; application to department;
timeframe for department's decision; conditions for approval;
creditor's duty to report transfer of securities; director's discretion
to require new license
Sec. 515. (1) As used in this section, "control" means possession
of the power directly or indirectly to:
(a) direct or cause the direction of the management or policies
of a creditor, whether through the beneficial ownership of
voting securities, by contract, or otherwise; or
(b) vote at least twenty-five percent (25%) of the voting
securities of a creditor, whether the voting rights are derived
through the beneficial ownership of voting securities, by
contract, or otherwise.
(2) An organization or an individual acting directly, indirectly, or
through or in concert with one (1) or more other organizations or
individuals may not acquire control of any creditor unless the
department has received and approved an application for change in
control. The department has not more than one hundred twenty (120)
days after receipt of an application to issue a notice approving the
proposed change in control. The application must contain the name
and address of the organization, individual, or individuals who
propose to acquire control and any other information required by the
director.
(3) The period for approval under subsection (2) may be
extended:
(a) in the discretion of the director for an additional thirty (30)
days; and
(b) not more than two (2) additional times for not more than
forty-five (45) days each time if:
(i) the director determines that the organization, individual,
or individuals who propose to acquire control have not
submitted substantial evidence of the qualifications
described in subsection (4);
(ii) the director determines that any material information
submitted is substantially inaccurate; or
(iii) the director has been unable to complete the
investigation of the organization, individual, or individuals
who propose to acquire control because of any delay caused
by or the inadequate cooperation of the organization,
individual, or individuals.
(4) The department shall issue a notice approving the application
only after the department is satisfied that both of the following apply:
(a) The organization, individual, or individuals who propose to
acquire control are qualified by competence, experience,
character, and financial responsibility to control and operate the
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creditor in a legal and proper manner.
(b) The interests of the owners and creditors of the creditor and
the interests of the public generally will not be jeopardized by
the proposed change in control.
(5) The director may determine, in the director's discretion, that
subsection (2) does not apply to a transaction if the director
determines that the direct or beneficial ownership of the creditor will
not change as a result of the transaction.
(6) The president or other chief executive officer of a creditor
shall report to the director any transfer or sale of securities of the
creditor that results in direct or indirect ownership by a holder or an
affiliated group of holders of at least ten percent (10%) of the
outstanding securities of the creditor. The report required by this
subsection must be made not later than ten (10) days after the
transfer of the securities on the books of the creditor.
(7) Depending on the circumstances of the transaction, the
director may reserve the right to require the organization, individual,
or individuals who propose to acquire control of a creditor licensed
under this article to apply for a new license under section 503 of this
chapter, instead of acquiring control of the licensee under this
section.
As added by P.L.89-2011, SEC.19. Amended by P.L.6-2012,
SEC.167.
IC 24-4.5-3-601
Loans subject to article by agreement of parties
Sec. 601. Loans Subject to Article by Agreement of Parties —
The parties to a loan other than a consumer loan may agree in writing
signed by the parties that the loan is subject to the provisions of this
Article applying to consumer loans. If the parties so agree, the loan
is a consumer loan for the purposes of this Article.
(Formerly: Acts 1971, P.L.366, SEC.4.)
IC 24-4.5-3-602
"Consumer related loan"; loan finance charge; licensing and
annual notice to department not required
Sec. 602. (1) A "consumer related loan" is a loan in which the
following apply:
(a) The loan is made by a person who is not regularly engaged
as a lender in credit transactions of the same kind.
(b) The debtor is a person other than an organization.
(c) The debt is primarily for a personal, family, or household
purpose.
(d) Either the debt is payable in installments or a loan finance
charge is made.
(e) Either:
(i) the amount of credit extended, the written credit limit, or
the initial advance does not exceed the exempt threshold
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amount, as adjusted in accordance with the annual
adjustment of the exempt threshold amount, specified in
Regulation Z (12 CFR 226.3 or 12 CFR 1026.3(b), as
applicable); or
(ii) the debt is secured by an interest in land or by personal
property used or expected to be used as the principal
dwelling of the debtor.
(2) With respect to a consumer related loan, including one made
pursuant to a revolving loan account, the parties may contract for the
payment by the debtor of a loan finance charge not in excess of that
permitted by the provisions on loan finance charge for consumer
loans other than supervised loans (IC 24-4.5-3-201).
(3) A person engaged in consumer related loans is not required to
comply with:
(a) the licensing requirements set forth in section 503 of this
chapter; or
(b) IC 24-4.5-6-201 through IC 24-4.5-6-203.
(Formerly: Acts 1971, P.L.366, SEC.4.) As amended by Acts 1981,
P.L.219, SEC.6; Acts 1982, P.L.149, SEC.6; Acts 1982, P.L.150,
SEC.6; P.L.14-1992, SEC.40; P.L.122-1994, SEC.28; P.L.27-2012,
SEC.24; P.L.216-2013, SEC.11; P.L.137-2014, SEC.13;
P.L.73-2016, SEC.12.
IC 24-4.5-3-603
Applicability of other provisions to consumer related loans
Sec. 603. Applicability of Other Provisions to Consumer Related
Loans — Except for the rate of the loan finance charge and the rights
to prepay and to rebate upon prepayment, the provisions of Part 2 of
this Chapter apply to a consumer related loan.
(Formerly: Acts 1971, P.L.366, SEC.4.)
IC 24-4.5-3-604
Limitation on default charges in consumer related loans
Sec. 604. Limitation on Default Charges in Consumer Related
Loans — (1) The agreement with respect to a consumer related loan
may provide for only the following charges as a result of the debtor's
default:
(a) reasonable attorney's fees and reasonable expenses incurred
in realizing on a security interest;
(b) deferral charges not in excess of twenty-five percent (25%)
per year of the amount deferred for the period of deferral; and
(c) other charges that could have been made had the loan been
a consumer loan.
(2) A provision in violation of this section is unenforceable.
(Formerly: Acts 1971, P.L.366, SEC.4.) As amended by Acts 1982,
P.L.150, SEC.7; P.L.73-2016, SEC.13.
IC 24-4.5-3-605
Indiana Code 2016
Loan finance charge for other loans
Sec. 605. Loan Finance Charge for Other Loans — With respect
to a loan other than a consumer loan or a consumer related loan, the
parties may contract for the payment by the debtor of any loan
finance charge.
(Formerly: Acts 1971, P.L.366, SEC.4.)
IC 24-4.5-3-606
Required disclosures; liability on fraudulently cashed instruments
Sec. 606. (1) In addition to any disclosures otherwise provided by
law, a lender soliciting loans using a negotiable check, facsimile, or
other negotiable instrument that may be used by a consumer to
activate a new loan shall disclose the following:
"This is a solicitation for a loan. Read the enclosed disclosures
before signing this agreement."
This notice shall be printed in at least ten point type and shall appear
conspicuously on the offer.
(2) If a negotiable check, a facsimile, or another instrument is
stolen or incorrectly received by someone other than the intended
payee and the instrument is fraudulently cashed, the consumer who
was the intended payee is not liable for the loan obligation.
As added by P.L.163-1999, SEC.3.
IC 24-4.5-3-701
Requirement to provide property tax information in certain
transactions
Sec. 701. With respect to a consumer loan secured by an interest
in land used or expected to be used as the principal dwelling of the
debtor, a lender shall comply with IC 6-1.1-12-43.
As added by P.L.64-2004, SEC.15.
Indiana Code 2016
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