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IC 24-4.5-6
Chapter 6. Administration
(Part 1. Powers and Functions of Administrator)
IC 24-4.5-6-101
Short title
Sec. 101. Short Title — This Chapter shall be known and may be
cited as Uniform Consumer Credit Code — Administration.
(Formerly: Acts 1971, P.L.366, SEC.7.)
IC 24-4.5-6-102
Applicability; "consumer credit sale"; "consumer loan"
Sec. 102. (a) IC 24-4.5-6-101 through IC 24-4.5-6-117 apply to
persons who:
(1) make or solicit consumer credit sales, consumer leases,
consumer loans, consumer related sales (IC 24-4.5-2-602), and
consumer related loans (IC 24-4.5-3-602); or
(2) directly collect payments from or enforce rights against
debtors arising from sales, leases, or loans specified in
subsection (1), wherever they are made.
(b) For purposes of IC 24-4.5-6-101 through IC 24-4.5-6-117:
(1) "Consumer credit sale" includes a sale that is a first lien
mortgage transaction if the sale is otherwise a consumer credit
sale.
(2) "Consumer loan" includes a loan that is a first lien mortgage
transaction if the loan is otherwise a consumer loan.
(Formerly: Acts 1971, P.L.366, SEC.7.) As amended by Acts 1981,
P.L.218, SEC.8; P.L.152-1986, SEC.71; P.L.35-2010, SEC.64;
P.L.27-2012, SEC.25.
IC 24-4.5-6-103
Department
Sec. 103. Department — "Department" means the members of the
department of financial institutions. The division of consumer credit
shall have charge of the administration of this article.
(Formerly: Acts 1971, P.L.366, SEC.7.) As amended by P.L.14-1992,
SEC.45.
IC 24-4.5-6-103.5
Repealed
(As added by P.L.80-1998, SEC.9. Repealed by P.L.35-2010,
SEC.209.)
IC 24-4.5-6-104
Powers of department; reliance on rules
Sec. 104. (1) In addition to other powers granted by this article,
the department within the limitations provided by law may:
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(a) receive and act on complaints, take action designed to obtain
voluntary compliance with this article, or commence
proceedings on the department's own initiative;
(b) counsel persons and groups on their rights and duties under
this article;
(c) establish programs for the education of consumers with
respect to credit practices and problems;
(d) make studies appropriate to effectuate the purposes and
policies of this article and make the results available to the
public;
(e) adopt, amend, and repeal rules, orders, policies, and forms
to carry out the provisions of this article;
(f) maintain more than one (1) office within Indiana; and
(g) appoint any necessary attorneys, hearing examiners, clerks,
and other employees and agents and fix their compensation, and
authorize attorneys appointed under this section to appear for
and represent the department in court.
(2) No liability is imposed under this article for an act done or
omitted in conformity with a rule, written notice, written opinion,
written interpretation, or written directive of the department
notwithstanding that after the act or omission the rule, written notice,
written opinion, written interpretation, or written directive may be
amended or repealed, or be determined by judicial or other authority
to be invalid for any reason.
(Formerly: Acts 1971, P.L.366, SEC.7.) As amended by
P.L.247-1983, SEC.22; P.L.14-1992, SEC.46; P.L.45-1995, SEC.15;
P.L.172-1997, SEC.9; P.L.213-2007, SEC.14; P.L.217-2007,
SEC.13.
IC 24-4.5-6-105
Administrative powers with respect to depository institutions
Sec. 105. (1) With respect to depository institutions, the powers
of examination and investigation (IC 24-4.5-6-106) and
administrative enforcement (IC 24-4.5-6-108) shall be exercised by
the department. The department may, at its discretion, accept any
examination of any financial institution made by a federal authority
in lieu of the examination made under the provisions of this article.
All other powers of the department under this article may be
exercised by the director with respect to a depository institution.
(2) If the department receives a complaint or other information
concerning noncompliance with this article by a depository
institution, the director shall inform the official or agency having
supervisory authority over the organization concerned. The
department may request information about depository institutions
from the officials or agencies supervising them.
(3) The department and any official or agency of this state having
supervisory authority over a depository institution are authorized and
directed to consult and assist one another in maintaining compliance
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with this article. They may jointly pursue investigations, prosecute
suits, and take other official action, as they deem appropriate, if
either of them otherwise is empowered to take the action.
(Formerly: Acts 1971, P.L.366, SEC.7.) As amended by P.L.14-1992,
SEC.47; P.L.35-2010, SEC.65.
IC 24-4.5-6-106
Department's examination and investigatory authority; record
retention; director's authority to control access to records; court
order compelling compliance; confidentiality; costs; vendors
Sec. 106. (1) In administering this article and in order to
determine whether the provisions of this article are being complied
with by persons engaging in acts subject to this article, the
department may examine the records of persons and may make
investigations of persons as may be necessary to determine
compliance. Records subject to examination under this section
include the following:
(a) Training, operating, and policy manuals.
(b) Minutes of:
(i) management meetings; and
(ii) other meetings.
(c) Other records that the department determines are necessary
to perform its investigation or examination.
The department may also administer oaths or affirmations, subpoena
witnesses, and compel the attendance of witnesses, including
directors, executive officers, managers, principals, mortgage loan
originators, employees, independent contractors, agents, and
customers of the licensee, individual, or person subject to this article.
The department may also adduce evidence, and require the
production of any matter which is relevant to the investigation. The
department shall determine the sufficiency of the records maintained
and whether the person has made the required information
reasonably available. The records pertaining to any transaction
subject to this article shall be retained for two (2) years after making
the final entry relating to the consumer credit transaction, but in the
case of a revolving loan account or revolving charge account, the two
(2) years is measured from the date of each entry.
(2) The department's examination and investigatory authority
under this article includes the following:
(a) The authority to require a creditor to refund overcharges
resulting from the creditor's noncompliance with the terms of
consumer credit sales, consumer leases, or consumer loans.
(b) The authority to require a creditor to comply with the
prepayment penalty provisions set forth in IC 24-4.5-3-209.
(c) The authority to investigate complaints filed with the
department by debtors.
(3) If the department:
(a) investigates; or
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(b) examines the books and records of;
a person that is subject to IC 24-4.5-6-201, IC 24-4.5-6-202, and
IC 24-4.5-6-203, the person shall pay all reasonably incurred costs of
the investigation or examination in accordance with the fee schedule
adopted by the department under IC 28-11-3-5. However, the person
is liable for the costs of an investigation or examination under this
subsection only to the extent that the costs exceed the amount of the
filing fees paid most recently under IC 24-4.5-6-203. Any costs
required to be paid under this section shall be paid not later than
sixty (60) days after the person receives a notice from the department
of the costs being assessed. The department may impose a fee, in an
amount fixed by the department under IC 28-11-3-5, for each day
that the assessed costs are not paid, beginning on the first day after
the sixty (60) day period described in this subsection.
(4) The department shall be given free access to the records
wherever located. In making any examination or investigation
authorized by this article, the director may control access to any
documents and records of the licensee or person under examination
or investigation. The director may take possession of the documents
and records or place a person in exclusive charge of the documents
and records in the place where the documents are usually kept.
During the period of control, the licensee or person may not remove
or attempt to remove any of the documents and records except under
a court order or with the consent of the director. Unless the director
has reasonable grounds to believe the documents or records of the
licensee or person have been, or are, at risk of being altered or
destroyed for purposes of concealing a violation of this article, the
licensee or person being examined or investigated is entitled to
access to the documents or records as necessary to conduct the
licensee's or person's ordinary business affairs. If the person's records
are located outside Indiana, the records shall be made available to the
department at a convenient location within Indiana, or the person
shall pay the reasonable and necessary expenses for the department
or its representative to examine them where they are maintained. The
department may designate comparable officials of the state in which
the records are located to inspect them on behalf of the department.
(5) Upon a person's failure without lawful excuse to obey a
subpoena or to give testimony and upon reasonable notice to all
affected persons, the department may apply to any civil court with
jurisdiction for an order compelling compliance.
(6) The department shall not make public the name or identity of
a person whose acts or conduct the department investigates pursuant
to this section or the facts disclosed in the investigation, but this
subsection does not apply to disclosures in actions or enforcement
proceedings pursuant to this article.
(7) To discover violations of this article or to secure information
necessary for the enforcement of this article, the department may
investigate any:
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(a) licensee or registrant; or
(b) person that the department suspects to be operating:
(i) without a license or registration, when a license or
registration is required under this article; or
(ii) otherwise in violation of this article.
The department has all investigatory and enforcement authority
under this article that the department has under IC 28-11 with respect
to financial institutions. If the department conducts an investigation
under this section, the licensee, registrant, or other person
investigated shall pay all reasonably incurred costs of the
investigation in accordance with the fee schedule adopted under
IC 28-11-3-5. Any costs required to be paid under this section shall
be paid not later than sixty (60) days after the person receives a
notice from the department of the costs being assessed. The
department may impose a fee, in an amount fixed by the department
under IC 28-11-3-5, for each day that the assessed costs are not paid,
beginning on the first day after the sixty (60) day period described in
this subsection.
(8) If a creditor contracts with an outside vendor to provide a
service that would otherwise be undertaken internally by the creditor
and be subject to the department's routine examination procedures,
the person that provides the service to the creditor shall, at the
request of the director, submit to an examination by the department.
If the director determines that an examination under this subsection
is necessary or desirable, the examination may be made at the
expense of the person to be examined. If the person to be examined
under this subsection refuses to permit the examination to be made,
the director may order any creditor that is licensed under this article
and that receives services from the person refusing the examination
to:
(a) discontinue receiving one (1) or more services from the
person; or
(b) otherwise cease conducting business with the person.
(Formerly: Acts 1971, P.L.366, SEC.7.) As amended by P.L.14-1992,
SEC.48; P.L.122-1994, SEC.34; P.L.45-1995, SEC.16; P.L.10-2006,
SEC.9 and P.L.57-2006, SEC.9; P.L.213-2007, SEC.15;
P.L.217-2007, SEC.14; P.L.35-2010, SEC.66; P.L.27-2012, SEC.26;
P.L.216-2013, SEC.12; P.L.186-2015, SEC.22.
IC 24-4.5-6-106.5
Powers of director
Sec. 106.5. To carry out the purposes of this section, the director
may:
(a) retain attorneys, accountants, or other professionals and
specialists as examiners, auditors, or investigators to conduct or
assist in the conduct of examinations or investigations;
(b) enter into agreements or relationships with other
government officials or regulatory associations to improve
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efficiencies and reduce regulatory burden by sharing:
(i) resources;
(ii) standardized or uniform methods or procedures; and
(iii) documents, records, information, or evidence obtained
under this section;
(c) use, hire, contract, or employ public or privately available
analytical systems, methods, or software to examine or
investigate a licensee, an individual, or a person subject to this
article;
(d) accept and rely on examination or investigation reports
made by other government officials, in or outside Indiana; or
(e) accept audit reports made by an independent certified public
accountant for the licensee, individual, or person subject to this
article in the course of that part of the examination covering the
same general subject matter as the audit and may incorporate
the audit report in the report of the examination, report of
investigation, or other writing of the director.
As added by P.L.35-2010, SEC.67.
IC 24-4.5-6-107
Applicability of laws governing administrative orders and rules;
venue; emergency rulemaking authority
Sec. 107. (1) Except as otherwise provided, IC 4-21.5-3 governs
all agency action taken by the department under this chapter or
IC 24-4.5-3-501 through IC 24-4.5-3-513. All proceedings for
administrative review under IC 4-21.5-3 or judicial review under
IC 4-21.5-5 shall be held in Marion County. The provisions of
IC 4-22-2 prescribing procedures for the adoption of rules by
agencies apply to the adoption of rules by the department of financial
institutions under this article. However, if the department declares an
emergency in the document containing the rule, the department may
adopt rules permitted by this chapter under IC 4-22-2-37.1.
(2) A rule under subsection (1) adopted under IC 4-22-2-37.1
expires on the date the department next adopts a rule under the
statute authorizing or requiring the rule.
(Formerly: Acts 1971, P.L.366, SEC.7.) As amended by P.L.31-1985,
SEC.48; P.L.7-1987, SEC.108; P.L.1-1990, SEC.243; P.L.14-1992,
SEC.49; P.L.35-2010, SEC.68; P.L.140-2013, SEC.19;
P.L.137-2014, SEC.16.
IC 24-4.5-6-107.5
Prohibited acts
Sec. 107.5. It is a violation of this article for a person or
individual subject to this article to:
(a) directly or indirectly employ any scheme, device, or artifice
to defraud or mislead borrowers or lenders or to defraud any
person;
(b) engage in any unfair or deceptive practice toward any
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person;
(c) obtain property by fraud or misrepresentation;
(d) solicit or enter into a contract with a borrower that provides
in substance that the person or individual subject to this article
may earn a fee or commission through "best efforts" to obtain
a loan even though no loan is actually obtained for the
borrower;
(e) solicit, advertise, or enter into a contract for specific interest
rates, points, or other financing terms unless the terms are
actually available at the time of soliciting, advertising, or
contracting;
(f) conduct any business covered by this article without holding
a valid license as required under this article, or assist or aid and
abet any person in the conduct of business under this article
without a valid license as required under this article;
(g) fail to make disclosures as required by this article and any
other applicable state or federal law, including regulations
under that law;
(h) fail to comply with this article or rules adopted under this
article, or fail to comply with any other state or federal law,
rule, or regulation, applicable to any business authorized or
conducted under this article;
(i) make, in any manner, any false or deceptive statement or
representation, including, with regard to the rates, points, or
other financing terms or conditions for a mortgage transaction,
or engage in bait and switch advertising;
(j) negligently make any false statement or knowingly and
willfully make any omission of material fact in connection with
any information or reports filed with a governmental agency or
the NMLSR or in connection with any investigation conducted
by the director or another governmental agency;
(k) make any payment, threat, or promise, directly or indirectly,
to any person for the purposes of influencing the independent
judgment of the person in connection with a mortgage
transaction, or make any payment, threat, or promise, directly
or indirectly, to any appraiser of a property, for the purposes of
influencing the independent judgment of the appraiser with
respect to the value of the property;
(l) collect, charge, attempt to collect or charge, or use or
propose any agreement purporting to collect or charge any fee
prohibited by this article;
(m) cause or require a borrower to obtain property insurance
coverage in an amount that exceeds the replacement cost of the
improvements as established by the property insurer;
(n) fail to account truthfully for money belonging to a party to
a mortgage transaction; or
(o) knowingly withhold, abstract, remove, mutilate, destroy, or
secrete any books, records, computer records, or other
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information subject to examination under this article.
As added by P.L.35-2010, SEC.69.
IC 24-4.5-6-108
Cease and desist orders; judicial review or enforcement
proceedings; record; appeal; unconscionable or fraudulent conduct
subject to injunction
Sec. 108. (1) After notice and an opportunity to be heard, the
department may order a creditor, or a person acting on behalf of the
creditor, to cease and desist from engaging in violations of this
article. A respondent aggrieved by an order of the department may
obtain judicial review of the order and the department may obtain an
order of the court for enforcement of its order in any civil court. The
proceeding for review or enforcement is initiated by filing a petition
in the court. Copies of the petition shall be served upon all parties of
record.
(2) Within thirty (30) days after service of the petition for review
upon the department, or within any further time the court may allow,
the department shall transmit to the court the original or a certified
copy of the entire record upon which the order is based, including
any transcript of testimony, which need not be printed. By stipulation
of all parties to the review proceeding, the record may be shortened.
After hearing the court may (a) reverse or modify the order if the
findings of fact of the department are clearly erroneous in view of the
reliable, probative, and substantial evidence on the whole record, (b)
grant any temporary relief or restraining order it deems just, and (c)
enter an order enforcing, modifying, and enforcing as modified, or
setting aside in whole or in part the order of the department, or
remanding the case to the department for further proceedings.
(3) An objection not urged at the hearing shall not be considered
by the court unless the failure to urge the objection is excused for
good cause shown. A party may move the court to remand the case
to the department in the interest of justice for the purpose of
adducing additional specified and material evidence and seeking
finding thereon upon good cause shown for the failure to adduce this
evidence before the department.
(4) The jurisdiction of the court shall be exclusive and its final
judgment or decree shall be subject to review by the court on appeal
in the same manner and form and with the same effect as in appeals
from a final judgment or decree. The department's copy of the
testimony shall be available at reasonable times to all parties for
examination without cost.
(5) A proceeding for review under this section must be initiated
within thirty (30) days after a copy of the order of the department is
received. If no proceeding is so initiated, the department may obtain
a decree of the civil court for enforcement of its order upon a
showing that an order was issued in compliance with this section,
that no proceeding for review was initiated within thirty (30) days
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after copy of the order was received, and that the respondent is
subject to the jurisdiction of the court.
(6) With respect to unconscionable agreements or fraudulent or
unconscionable conduct by the respondent, the department may not
issue an order pursuant to this section but may bring a civil action for
an injunction (IC 24-4.5-6-111).
(Formerly: Acts 1971, P.L.366, SEC.7.) As amended by P.L.14-1992,
SEC.50; P.L.35-2010, SEC.70.
IC 24-4.5-6-109
Assurance of discontinuance
Sec. 109. Assurance of Discontinuance — If it is claimed that a
person has engaged in conduct subject to an order by the department
(IC 24-4.5-6-108) or by a court (IC 24-4.5-6-110 through
IC 24-4.5-6-112), the department may accept an assurance in writing
that the person will not engage in the conduct in the future. If a
person giving an assurance of discontinuance fails to comply with its
terms, the assurance is evidence that prior to the assurance he
engaged in the conduct described in the assurance.
(Formerly: Acts 1971, P.L.366, SEC.7.) As amended by P.L.14-1992,
SEC.51.
IC 24-4.5-6-110
Injunctions against violations
Sec. 110. The department may bring a civil action to restrain a
person from violating this article or another state or federal law or
regulation, and for other appropriate relief.
(Formerly: Acts 1971, P.L.366, SEC.7.) As amended by P.L.14-1992,
SEC.52; P.L.35-2010, SEC.71.
IC 24-4.5-6-111
Injunctions against unconscionable agreements and fraudulent or
unconscionable conduct
Sec. 111. Injunctions Against Unconscionable Agreements and
Fraudulent or Unconscionable Conduct — (1) The department may
bring a civil action to restrain a creditor or a person acting in behalf
of a creditor from engaging in a course of:
(a) making or enforcing unconscionable terms or provisions of
consumer credit sales, consumer leases, or consumer loans;
(b) fraudulent or unconscionable conduct in inducing debtors to
enter into consumer credit sales, consumer leases, or consumer
loans; or
(c) fraudulent or unconscionable conduct in the collection of
debts arising from consumer credit sales, consumer leases, or
consumer loans.
(2) In an action brought pursuant to this section the court may
grant relief only if it finds:
(a) that the respondent has made unconscionable agreements or
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has engaged or is likely to engage in a course of fraudulent or
unconscionable conduct;
(b) that the agreements or conduct of the respondent has caused
or is likely to cause injury to consumers; and
(c) that the respondent has been able to cause or will be able to
cause the injury primarily because the transactions involved are
credit transactions.
(3) In applying this section, consideration shall be given to each
of the following factors, among others:
(a) belief by the creditor at the time consumer credit sales,
consumer leases, or consumer loans are made that there was no
reasonable probability of payment in full of the obligation by
the debtor;
(b) in the case of consumer credit sales or consumer leases,
knowledge by the seller or lessor at the time of the sale or lease
of the inability of the buyer or lessee to receive substantial
benefits from the property or services sold or leased;
(c) in the case of consumer credit sales or consumer leases,
gross disparity between the price of the property or services
sold or leased and the value of the property or services
measured by the price at which similar property or services are
readily obtainable in credit transactions by like buyers or
lessees;
(d) the fact that the creditor contracted for or received separate
charges for insurance with respect to consumer credit sales or
consumer loans with the effect of making the sales or loans,
considered as a whole, unconscionable; and
(e) the fact that the respondent has knowingly taken advantage
of the inability of the debtor reasonably to protect his interests
by reason of physical or mental infirmities, ignorance, illiteracy
or inability to understand the language of the agreement, or
similar factors.
(4) In an action brought pursuant to this section, a charge or
practice expressly permitted by this Article is not in itself
unconscionable.
(Formerly: Acts 1971, P.L.366, SEC.7.) As amended by P.L.14-1992,
SEC.53; P.L.122-1994, SEC.35.
IC 24-4.5-6-112
Temporary relief
Sec. 112. Temporary Relief — With respect to an action brought
to enjoin violations of the Article (IC 24-4.5-6-110) or
unconscionable agreements or fraudulent or unconscionable conduct
(IC 24-4.5-6-111), the department may apply to the court for
appropriate temporary relief against a respondent, pending final
determination of proceedings. If the court finds after a hearing held
upon notice to the respondent that there is reasonable cause to
believe that the respondent is engaging in or is likely to engage in
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conduct sought to be restrained, it may grant any temporary relief or
restraining order it deems appropriate.
(Formerly: Acts 1971, P.L.366, SEC.7.) As amended by P.L.14-1992,
SEC.54.
IC 24-4.5-6-113
Civil actions by department; civil penalties for violations
Sec. 113. (1) After demand, the department may bring a civil
action against a creditor for making or collecting charges in excess
of those permitted by this article. An action may relate to
transactions with more than one debtor. If it is found that an excess
charge has been made, the court shall order the respondent to refund
to the debtor or debtors the amount of the excess charge. If a creditor
has made an excess charge in deliberate violation of or in reckless
disregard for this article, or if a creditor has refused to refund an
excess charge within a reasonable time after demand by the debtor
or the department, the court may also order the respondent to pay to
the debtor or debtors a civil penalty in an amount determined by the
court not in excess of the greater of either the amount of the credit
service or loan finance charge or ten (10) times the amount of the
charge. Refunds and penalties to which the debtor is entitled
pursuant to this subsection may be set off against the debtor's
obligation. If a debtor brings an action against a creditor to recover
an excess charge or civil penalty, an action by the department to
recover for the same excess charge or civil penalty shall be stayed
while the debtor's action is pending and shall be dismissed if the
debtor's action is dismissed with prejudice or results in a final
judgment granting or denying the debtor's claim. With respect to
excess charges arising from sales made pursuant to revolving charge
accounts or from loans made pursuant to revolving loan accounts, no
action pursuant to this subsection may be brought more than two (2)
years after the time the excess charge was made. With respect to
excess charges arising from other consumer credit sales or consumer
loans, no action pursuant to this subsection may be brought more
than one (1) year after the due date of the last scheduled payment of
the agreement pursuant to which the charge was made. If the creditor
establishes by a preponderance of evidence that a violation is
unintentional or the result of a bona fide error, no liability to pay a
penalty shall be imposed under this subsection.
(2) The department may bring a civil action against a creditor or
a person acting in his behalf to recover a civil penalty for willfully
violating this article, and if the court finds that the defendant has
engaged in a course of repeated and willful violations of this article,
it may assess a civil penalty of no more than five thousand dollars
($5,000). No civil penalty pursuant to this subsection may be
imposed for violations of this article occurring more than two (2)
years before the action is brought or for making unconscionable
agreements or engaging in a course of fraudulent or unconscionable
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conduct.
(3) If the department determines, after notice and opportunity for
the person to be heard, that a person has violated this article, the
department may, in addition to or instead of all other remedies
available under this section, impose upon the person a civil penalty
not greater than ten thousand dollars ($10,000) per violation.
(Formerly: Acts 1971, P.L.366, SEC.7.) As amended by P.L.14-1992,
SEC.55; P.L.213-2007, SEC.16; P.L.217-2007, SEC.15;
P.L.35-2010, SEC.72.
IC 24-4.5-6-114
Repealed
(Formerly: Acts 1971, P.L.366, SEC.7. As amended by
P.L.14-1992, SEC.56. Repealed by P.L.35-2010, SEC.209.)
IC 24-4.5-6-115
Debtor's remedies not affected
Sec. 115. Debtor's Remedies Not Affected — The grant of powers
to the department in this Article does not affect remedies available
to debtors under this Article or under other principles of law or
equity.
(Formerly: Acts 1971, P.L.366, SEC.7.) As amended by P.L.14-1992,
SEC.57.
IC 24-4.5-6-116
Venue
Sec. 116. Venue — The department may bring actions or
proceedings in a court in a county in which an act on which the
action or proceeding is based occurred or in a county in which
respondent resides or transacts business or in a county otherwise
authorized by rule or venue laws.
(Formerly: Acts 1971, P.L.366, SEC.7.) As amended by P.L.14-1992,
SEC.58.
IC 24-4.5-6-117
"Civil court" defined
Sec. 117. As used in this article, "civil court" means any court of
Indiana having civil jurisdiction.
(Formerly: Acts 1971, P.L.366, SEC.7.) As amended by P.L.1-1990,
SEC.244.
IC 24-4.5-6-119
Violations by individuals; persons convicted of felonies; civil
penalties; creditor's duty to notify department of discharge or
termination
Sec. 119. (a) Subject to subsection (b), if the director determines
that a director, an officer, or an employee of a creditor:
(1) has committed a violation of a statute, a rule, a final cease
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and desist order, a condition imposed in writing by the director
in connection with the grant of an application or other request
by the creditor, or a written agreement between the creditor and
the director or the department;
(2) has committed fraudulent or unconscionable conduct; or
(3) has been convicted of a felony under the laws of Indiana or
any other jurisdiction;
the director may issue and serve upon the person a notice of charges
and of the director's intent to issue an order removing the person
from the person's office or employment, an order prohibiting
participation by the person in the conduct of the affairs of any
creditor, or an order both removing the person and prohibiting the
person's participation.
(b) A violation, practice, or breach described in subsection (a) is
subject to the authority of the director under subsection (a) if the
director finds any of the following:
(1) The interests of the creditor's customers could be seriously
prejudiced by reason of the violation, practice, or breach.
(2) The violation, practice, or breach involves personal
dishonesty on the part of the officer, director, or employee
involved.
(3) The violation, practice, or breach demonstrates a willful or
continuing disregard by the officer, director, or employee for
state or federal law and regulations, and for the consumer
protections contained in this article.
(c) A person who has been convicted of a felony under the laws
of Indiana or any other jurisdiction may not serve as an officer, a
director, or an employee of a creditor, or serve in any similar
capacity, unless the person obtains the written consent of the
director.
(d) A creditor that willfully permits a person to serve the creditor
in violation of subsection (c) is subject to a civil penalty of five
hundred dollars ($500) for each day the violation occurs.
(e) A creditor shall give the department written notice of the
resignation, discharge, or termination of an employee, independent
contractor, or agent against whom allegations were made that
accused the employee, independent contractor, or agent of:
(1) violating this article or other laws, regulations, rules, or
industry standards of conduct applicable to consumer credit
transactions; or
(2) fraud, dishonesty, theft, or the wrongful taking of property.
The creditor shall provide the department the notice required under
this subsection not later than thirty (30) days after the effective date
of the resignation, discharge, or termination.
As added by P.L.35-2010, SEC.73. Amended by P.L.27-2012,
SEC.27.
IC 24-4.5-6-120
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Notice of charges; contents; hearing; final order; suspension or
prohibition pending final order; official record
Sec. 120. (a) A notice issued under section 119 of this chapter
must:
(1) be in writing;
(2) contain a statement of:
(A) the facts constituting the alleged violation, practice, or
breach;
(B) the facts alleged in support of the violation, practice, or
breach; and
(C) the director's intention to issue an order under section
122(a) of this chapter;
(3) be delivered to the board of directors of the creditor;
(4) be delivered to the officer, director, or employee to which
the notice applies;
(5) specify the procedures that must be followed to initiate a
hearing to contest the alleged violation, practice, or breach; and
(6) if the director suspends or prohibits the officer, director, or
employee from participation in the affairs of the creditor as
described under subsection (e), a statement of the suspension or
prohibition.
(b) If a hearing is requested not later than ten (10) days after
service of the notice described under subsection (a), the department
shall hold a hearing concerning the alleged violation, practice, or
breach. The hearing shall be held not later than forty-five (45) days
after receipt of the request. The department, based on the evidence
presented at the hearing, shall enter a final order in accordance with
section 122 of this chapter.
(c) If no hearing is requested within the period of time specified
in subsection (b), the director may proceed to issue a final order
under section 122 of this chapter on the basis of the facts set forth in
the notice described under subsection (a).
(d) An officer, director, or employee of a creditor who is removed
from a position under a removal order under section 122 of this
chapter that has become final may not, without the approval of the
director, participate in the conduct of the affairs of a licensee
described under IC 24-4.5-3.
(e) The director may, for the protection of the creditor or the
interests of the creditor's customers, suspend from office or prohibit
from participation in the affairs of the creditor an officer, a director,
or an employee of a creditor who is the subject of a written notice
served by the director under section 119(a) of this chapter. A
suspension or prohibition under this subsection becomes effective
upon service of the notice under section 119(a) of this chapter.
Unless stayed by a court in a proceeding authorized by subsection
(f), the suspension or prohibition remains in effect pending
completion of the proceedings related to the notice served under
section 119(a) of this chapter and until the effective date of an order
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entered by the department under subsection (b) or the director under
subsection (c). If the director suspends or prohibits participation of
an officer, a director, or an employee under this subsection, copies
of the notice shall also be served upon the creditor or affiliate of
which the person is an officer, a director, or an employee.
(f) Not more than fifteen (15) days after an officer, a director, or
an employee has been suspended from office or prohibited from
participation in the conduct of the affairs of the creditor or affiliate
under subsection (e), the officer, director, or employee may apply to
a court having jurisdiction for a stay of the suspension or prohibition
pending completion of the proceedings related to the notice served
under section 119(a) of this chapter. The court may stay a suspension
of prohibition of the officer, director, or employee.
(g) The department shall maintain an official record of a
proceeding under this chapter.
As added by P.L.35-2010, SEC.74.
IC 24-4.5-6-121
Consent agreement; notice of charges not required
Sec. 121. If the director enters into a consent to a final order with
a director, an officer, or an employee, the director is not required to
issue and serve a notice of charges upon the director, officer, or
employee under section 119 of this chapter. A consent agreement
may be negotiated and entered into before or after the issuance of a
notice of charges. The director shall provide a copy of the consent
order to the board of directors of the creditor.
As added by P.L.35-2010, SEC.75.
IC 24-4.5-6-122
Final order; remedies; consent presumed; confidentiality
Sec. 122. (a) Subject to section 120 of this chapter, if, after a
hearing described in section 120(b) of this chapter, the department
determines that a director, an officer, or an employee of a creditor
has committed an act described in section 119 of this chapter, the
department may issue a final order. If a hearing is not requested
within the time specified in section 120(b) of this chapter, the
director may issue a final order on the basis of the facts set forth in
the written notice served under section 119(a) of this chapter.
(b) Unless the director has entered into a consent agreement
described in section 121 of this chapter, a final order must include
separately stated findings of fact and conclusions of law for all
aspects of the order.
(c) In a final order under this section, the department or the
director, as appropriate, may order one (1) or more of the following
with respect to an officer, a director, or an employee of a creditor:
(1) The removal of the officer, director, or employee from the
person's office, position, or employment.
(2) A prohibition against any participation by the officer,
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director, or employee in the conduct of the affairs of any
creditor.
(3) If the subject of the order is an officer or a director of a
creditor, and subject to section 124 of this chapter, the
imposition of a civil penalty not to exceed fifteen thousand
dollars ($15,000) for each practice, violation, or act that:
(A) is described in section 119 of this chapter; and
(B) found to exist by the department or the director.
(d) A final order shall be issued in writing not later than ninety
(90) days after conclusion of a hearing held under section 120(b) of
this chapter, unless this period is waived or extended with the written
consent of all parties or for good cause shown.
(e) If the officer, director, or employee does not appear
individually or by an authorized representative at a hearing held
under section 120(b) of this chapter, the officer, director, or
employee is considered to have consented to the issuance of a final
order.
(f) The director may keep a final order confidential if the director
determines that the immediate release of the order would endanger
the stability of the creditor. However, after two (2) years following
the date that an order is issued, a final order is no longer confidential.
(g) The remedies provided in this chapter are in addition to other
remedies contained in this article.
As added by P.L.35-2010, SEC.76.
IC 24-4.5-6-123
Final order; effective date; authority of department or court to
stay, modify, or vacate
Sec. 123. (a) A final order issued under section 122 of this chapter
is effective the eleventh day after the date the order is served.
However, a final order issued upon consent under section 121 of this
chapter is effective at the time specified in the order.
(b) A final order remains effective and enforceable as provided in
the order.
(c) The department or a reviewing court may stay, modify, or
vacate a final order.
As added by P.L.35-2010, SEC.77.
IC 24-4.5-6-124
Factors for determining amount of civil penalty; indemnification
by creditor prohibited; deposit of civil penalties in financial
institutions fund
Sec. 124. (a) The director or the department, as appropriate, shall
consider the following factors in determining the amount of a civil
penalty that should be assessed against a director or an officer under
section 122(c)(3) of this chapter:
(1) The appropriateness of the civil penalty with respect to the
financial resources and good faith of the individual charged.
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(2) The gravity of the practice, violation, or breach.
(3) The history of previous practices, violations, or breaches.
(4) The economic benefit derived by the individual from the
practice, violation, or breach.
(5) Other factors that justice requires.
(b) A creditor may not indemnify a director or an officer for a
civil penalty imposed against the director or officer under this
section.
(c) Civil penalties shall be deposited in the financial institutions
fund established by IC 28-11-2-9.
As added by P.L.35-2010, SEC.78.
IC 24-4.5-6-125
Authority of director to enforce orders, agreements, or conditions
in court
Sec. 125. The director may enforce any of the following by
applying for appropriate relief to a court having jurisdiction:
(1) An order issued under section 121 or 122 of this chapter.
(2) A written agreement entered into by the director or the
department and a director, an officer, or an employee of a
creditor.
(3) Any condition imposed in writing by the director or the
department on a director, an officer, or an employee of a
creditor.
As added by P.L.35-2010, SEC.79.
(Part 2. Notification and Fees)
IC 24-4.5-6-201
Applicability of notification requirements and fees
Sec. 201. (1) This section and sections 202 and 203 of this chapter
apply to a person, including a depository institution, but not
including a collection agency licensed under IC 25-11-1, engaged in
Indiana in any of the following:
(a) Making consumer credit sales, consumer leases, or
consumer loans.
(b) Taking assignments of rights against debtors that arise from
sales, leases, or loans by a person having an office or a place of
business in Indiana.
(c) Undertaking direct collection of payments from the debtors
or enforcement of rights against the debtors.
(d) Placing consumer credit insurance, receiving commissions
for consumer credit insurance, or acting as a limited line credit
insurance producer in the sale of consumer credit insurance.
(e) Selling insurance or other benefits, the charges for which are
approved by the department as additional charges under
IC 24-4.5-2-202 or IC 24-4.5-3-202.
(2) This section and sections 202 and 203 of this chapter are not
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applicable to a seller whose credit sales consist entirely of sales made
pursuant to a seller credit card issued by a person other than the
seller if the issuer of the card has complied with the provisions of
this section and sections 202 and 203 of this chapter.
(3) This section and sections 202 and 203 of this chapter apply to
a seller whose credit sales are made using credit cards that:
(a) are issued by a lender;
(b) are in the name of the seller; and
(c) can be used by the buyer or lessee only for purchases or
leases at locations of the named seller.
(Formerly: Acts 1971, P.L.366, SEC.7; Acts 1972, P.L.182, SEC.3.)
As amended by P.L.152-1986, SEC.72; P.L.14-1992, SEC.59;
P.L.122-1994, SEC.36; P.L.176-1996, SEC.10; P.L.178-2003,
SEC.11; P.L.10-2006, SEC.10 and P.L.57-2006, SEC.10;
P.L.213-2007, SEC.17; P.L.217-2007, SEC.16; P.L.35-2010,
SEC.80.
IC 24-4.5-6-202
Notification
Sec. 202. (1) Persons that are subject to this section and sections
201 and 203 of this chapter shall file notification with the department
within thirty (30) days after commencing business in Indiana and
thereafter on an annual basis, on the date set forth in subsection (2).
The notification shall state the:
(a) name of the person;
(b) name in which business is transacted if different from
subdivision (a);
(c) address of principal office, which may be outside Indiana;
and
(d) address of all offices or retail stores, if any, in Indiana at
which consumer credit sales, consumer leases, or consumer
loans are made, or in the case of a person taking assignments of
obligations, the offices or places of business within Indiana at
which business is transacted.
(2) A person required to be licensed under this article shall file the
notification required by subsection (1) not later than December 31 of
each year. All other persons subject to this section shall file the
notification required by subsection (1) not later than January 31 of
each year.
(3) Persons subject to sections 201 and 203 of this chapter and
this section shall notify the department not later than thirty (30) days
after the person:
(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;
(d) is notified that the person is subject to revocation or
suspension proceedings by a state or governmental authority
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with regard to the person's activities; or
(e) has been convicted of a felony involving fraud, deceit, or
misrepresentation under the laws of Indiana or any other
jurisdiction.
(Formerly: Acts 1971, P.L.366, SEC.7.) As amended by
P.L.152-1986, SEC.73; P.L.14-1992, SEC.60; P.L.122-1994,
SEC.37; P.L.63-2001, SEC.4 and P.L.134-2001, SEC.4;
P.L.213-2007, SEC.18; P.L.217-2007, SEC.17; P.L.35-2010,
SEC.81; P.L.27-2012, SEC.28.
IC 24-4.5-6-203
Fees
Sec. 203. (1) Persons required to file notification who are sellers,
lessors, or lenders shall pay a fee in an amount and at intervals to be
prescribed by the director under IC 28-11-3-5. The fee shall be a set
amount for each one hundred thousand dollars ($100,000), or part
thereof, in excess of one hundred thousand dollars ($100,000), of the
original unpaid balances arising from consumer credit sales,
consumer leases, and consumer loans made in Indiana and held either
by the seller, lessor, or lender for more than thirty (30) days after the
inception of the sale, lease, or loan giving rise to the obligations, or
by an assignee who has not filed notification. A refinancing of a sale,
lease, or loan resulting in an increase in the amount of an obligation
is a new sale, lease, or loan to the extent of the increase. In
prescribing the fee, the department shall consider the costs and
expense incurred or estimated to be incurred by the department in the
administration of this article, including, but not limited to, the
supervision, regulation, and examination of persons subject to the
provisions of the article.
(2) Persons required to file notification who are assignees shall
pay a fee as prescribed and fixed by the department under subsection
(1) on the unpaid balances at the time of the assignment of
obligations arising from consumer credit sales, consumer leases, and
consumer loans made in Indiana taken by assignment during the
preceding calendar year, but an assignee need not pay a fee with
respect to an obligation on which the assignor or other person has
already paid a fee.
(3) Persons required to file notification who are assignors shall
pay a fee as prescribed by the department under subsection (1) on the
unpaid balances at the time of the assignment of obligations arising
from consumer credit sales, consumer leases, and consumer loans
made in Indiana during the preceding calendar year unless the
assignee has already paid the fees.
(4) Persons required to renew a license under IC 24-4.5-3-503.6
may deduct the fees paid under IC 24-4.5-3-503(8)(b) and
IC 24-4.5-3-503(8)(c), as applicable, from fees paid under this
section.
(5) A person that is required to file notification under
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IC 24-4.5-6-202 shall pay a fee at the same rate as prescribed and
fixed by the department under subsection (1) on the original unpaid
balances of all closed end credit obligations originating from the
person's place of business during the time preceding the notification
as specified under subsection (1), unless the fees for the obligations
have been paid by another person.
(Formerly: Acts 1971, P.L.366, SEC.7.) As amended by Acts 1977,
P.L.269, SEC.1; P.L.247-1983, SEC.23; P.L.14-1992, SEC.61;
P.L.122-1994, SEC.38; P.L.213-2007, SEC.19; P.L.217-2007,
SEC.18; P.L.90-2008, SEC.13; P.L.27-2012, SEC.29.
IC 24-4.5-6-204
Nonapplicability of licensing and notification requirements to
attorneys' services
Sec. 204. IC 24-4.5-3-502, IC 24-4.5-6-201, IC 24-4.5-6-202, and
IC 24-4.5-6-203 are not applicable to services performed by
attorneys.
As added by P.L.153-1986, SEC.3. Amended by P.L.213-2007,
SEC.20; P.L.217-2007, SEC.19.
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