2013 Indiana Code TITLE 28. FINANCIAL INSTITUTIONS ARTICLE 11. DEPARTMENT OF FINANCIAL INSTITUTIONS CHAPTER 3. SUPERVISION OF FINANCIAL INSTITUTIONS
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IC 28-11-3
Chapter 3. Supervision of Financial Institutions
IC 28-11-3-1
Examination of financial institutions; independent audit; report of
condition; data processing services; use of report by Federal Home
Loan Bank; unauthorized actions concerning reports; examination
of vendors
Sec. 1. (a) The department shall examine the affairs of every
financial institution as often as the department considers necessary.
Examinations may be made without notice to the institution to be
examined.
(b) In making an examination, the department may examine any
of the officers or agents of the institution under oath.
(c) The department may require an independent audit by a
certified public accountant, subject to the standards the department
determines.
(d) The department, in the classification of assets, may disregard
the amount of an asset in its analysis of capital adequacy of the
financial institution until the amount of the asset is recovered.
(e) After the examiners complete the examination of a financial
institution, the examiners:
(1) shall submit their written findings and recommendations to:
(A) the board of directors; and
(B) other parties authorized by the board of directors and
approved by the director; and
(2) may confer with the parties listed in subdivision (1) on the
findings and recommendations.
(f) Upon the conclusion of an examination, a full, true, and
detailed report of the condition of the financial institution shall be
made to the department by the examiners in the form prescribed by
the department.
(g) A financial institution subject to examination by the
department may not cause, by contract or otherwise, any data
processing or other similar service to be performed, either on or off
its premises, until written assurances are furnished to the department
by the financial institution and the entity providing the service that
the performance of the service will be subject to regulation and
examination by the department to the same extent as if the service
was being performed by the financial institution on its own premises.
Entities that provide data processing or other similar services to more
than one (1) financial institution need only file one (1) written
assurance to cover all financial institutions to which the entity
provides services.
(h) The report of an examination conducted under this section:
(1) is the exclusive property of the department; and
(2) except as provided in subsection (i), shall not be distributed,
published, or duplicated without the prior authorization of the
director.
(i) A financial institution that is or seeks to become a member of
the Federal Home Loan Bank System may provide a copy of a report
of an examination conducted by the department to the Federal Home
Loan Bank for the confidential use of the Federal Home Loan Bank
if the director and the Federal Home Loan Bank have entered into a
written agreement that provides that the report of the examination:
(1) remains the property of the department; and
(2) is not:
(A) subject to inspection under IC 5-14-3;
(B) subject to subpoena;
(C) subject to discovery; or
(D) admissible in evidence in any civil action.
(j) Except as provided in subsection (i), a person who knowingly
or intentionally possesses, distributes, publishes, or duplicates a
report of an examination conducted under this section without the
prior authorization of the director commits a Class B misdemeanor.
(k) If a financial institution contracts with an outside vendor to
provide a service that would otherwise be undertaken internally by
the financial institution and be subject to the department's routine
examination procedures, the person that provides the service to the
financial institution 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
financial institution that receives services from the person refusing
the examination to:
(1) discontinue receiving one (1) or more services from the
person; or
(2) otherwise cease conducting business with the person.
As added by P.L.33-1991, SEC.56. Amended by P.L.262-1995,
SEC.75; P.L.90-2008, SEC.69; P.L.35-2010, SEC.196.
IC 28-11-3-2
Visitorial powers
Sec. 2. The department has visitorial powers with respect to any
financial institution for the purpose of maintaining the safety and
soundness of the financial institution.
As added by P.L.33-1991, SEC.56.
IC 28-11-3-3
Disclosure of confidential information; information sharing
agreements
Sec. 3. (a) The director or the director's designee may disclose or
make available to a:
(1) state, federal, or foreign law enforcement agency;
(2) state, federal, or foreign financial institution supervisory
agency;
(3) state, federal, or foreign prosecutorial agency;
(4) state, federal, or foreign money services business
supervisory agency;
(5) private insurer of deposit accounts or share accounts of a
financial institution;
(6) state, federal, or foreign agency responsible for licensing,
registering, chartering, or supervising any regulated:
(A) business; or
(B) nonprofit activity; or
(7) the Federal Home Loan Bank;
confidential information described under IC 28-1-2-30 or pertaining
to a regulated business or nonprofit activity.
(b) Confidential information provided by the director or the
director's designee under this section is privileged by law, remains
the property of the department, and is not:
(1) subject to inspection under IC 5-14-3;
(2) subject to subpoena;
(3) subject to discovery; or
(4) admissible in evidence in any civil action.
(c) The director may enter into information sharing agreements
with parties authorized to received information under this section.
As added by P.L.33-1991, SEC.56. Amended by P.L.213-2007,
SEC.99; P.L.217-2007, SEC.97; P.L.90-2008, SEC.70.
IC 28-11-3-4
Documents, reports, and other papers; certified copies; prima facie
evidence
Sec. 4. A copy of a document, report, or other paper received and
filed by the department, when certified by the director, shall be
received in all courts and places as prima facie evidence of the facts
stated in the certified copy.
As added by P.L.33-1991, SEC.56.
IC 28-11-3-5
Schedule of fees; classification of assets; changes or modifications
of fees; excess costs of examinations
Sec. 5. (a) As used in this section, "assets" means the assets of a
financial institution as disclosed by a report made by the financial
institution at the end of the year immediately preceding the fiscal
year in which a fee is fixed under this section.
(b) The department shall fix and collect, on an annual basis, a
schedule of fees for the services rendered and the duties performed
by the department in the administration of financial institutions.
(c) The fees may not exceed the comparative cost to the
department in the administration of financial institutions. In
determining the costs, the department may classify the assets of
financial institutions and fix fees at different rates for the
examination, supervision, regulation, and liquidation of the classes
of assets, based on the proportionate cost and expense incurred by
the department in making examinations and in the administration of
financial institutions.
(d) The fees shall be charged and collected until changed or
modified by the department. A change or modification of fees may
not be adopted more often than one (1) time each state fiscal year. A
modified schedule of fees is effective on the first day of the state
fiscal year following the fiscal year in which the modification is
adopted.
(e) Administrative charges included in the fee are in addition to
charges collected under other statutes.
(f) If the reasonable costs of performing an examination of a
financial institution exceed the fees established under this section,
the financial institution shall pay the excess costs not later than thirty
(30) days after receipt of an invoice from the department. The
department may impose a fee, in an amount fixed by the department
under this section, for each day that the excess costs are not paid,
beginning on the first day after the thirty (30) day period described
in this subsection.
As added by P.L.33-1991, SEC.56. Amended by P.L.10-2006, SEC.73
and P.L.57-2006, SEC.73; P.L.35-2010, SEC.197.
IC 28-11-3-6
Federal preemption; exemption of state chartered entities and
subsidiaries from provisions of state law
Sec. 6. (a) As used in this section:
(1) "federally chartered" means an entity organized or
reorganized under the law of the United States; and
(2) "state chartered" means an entity organized or reorganized
under the law of Indiana or another state.
(b) If the department determines that federal law has preempted
a provision of IC 24, IC 26, IC 28, IC 29, or IC 30, the provision of
IC 24, IC 26, IC 28, IC 29, or IC 30 applies to a state chartered entity
only to the same extent that the department determines the provision
is applicable to the:
(1) same; or
(2) functionally equivalent;
type of federally chartered entity.
(c) A state chartered entity seeking an exemption from a provision
of IC 24, IC 26, IC 28, IC 29, or IC 30 based on the preemption of
the provision as applied to a federally chartered entity shall submit
a letter to the department:
(1) describing in detail; and
(2) documenting the federal preemption of;
the provisions from which it seeks exemption. If available, copies of
relevant federal law, regulations, and interpretive letters must be
attached to the letter submitted by the requesting entity.
(d) The department shall notify the requesting entity of the
department's receipt of the request not later than ten (10) business
days after the department's receipt of a letter described in subsection
(c). Except as provided in subsection (e), upon receipt of the
notification, the requesting entity may operate as if it is exempt from
the provision of IC 24, IC 26, IC 28, IC 29, or IC 30 ninety (90) days
after the date on which the department receives the letter, unless
otherwise notified by the department. This period may be extended
for an additional ninety (90) days if the department determines that
the requesting entity's letter raises issues requiring additional
information or additional time for analysis. If the department extends
the period for the department's review of the request, the requesting
entity may operate as if the requesting entity is exempt from a
provision of IC 24, IC 26, IC 28, IC 29, or IC 30 during the extended
period of review only if the requesting entity receives prior written
approval from the department. However:
(1) the department must:
(A) approve or deny the requested exemption; or
(B) convene a hearing;
not later than ninety (90) days after the department receives the
requesting entity's letter, unless the department has extended the
period for the department's review under this subsection; and
(2) if a hearing is convened, the department must approve or
deny the requested exemption not later than ninety (90) days
after the hearing is concluded.
(e) The department may refuse to exempt a requesting entity from
a provision of IC 24, IC 26, IC 28, IC 29, or IC 30 if the department
finds that any of the following conditions apply:
(1) The department determines that a described provision of
IC 24, IC 26, IC 28, IC 29, or IC 30 is not preempted for a
federally chartered entity of the:
(A) same; or
(B) functionally equivalent;
type.
(2) The extension of the federal preemption in the form of an
exemption from a provision of IC 24, IC 26, IC 28, IC 29, or
IC 30 to the requesting entity would:
(A) adversely affect the safety and soundness of the
requesting entity; or
(B) result in an unacceptable curtailment of consumer
protection provisions.
(3) The failure of the department to provide for the exemption
from a provision of IC 24, IC 26, IC 28, IC 29, or IC 30 will not
result in a competitive disadvantage to the requesting entity.
(f) The operation of a financial institution in a manner consistent
with exemption from a provision of IC 24, IC 26, IC 28, IC 29, or
IC 30 under this section is not a violation of any provision of the
Indiana Code or rules adopted under IC 4-22-2.
(g) If a financial institution is exempted from the provisions of
IC 24, IC 26, IC 28, IC 29, or IC 30 in compliance with this section,
the department shall do the following:
(1) Determine whether the exemption shall apply to all financial
institutions that, in the opinion of the department, possess a
charter that is:
(A) the same as; or
(B) functionally the equivalent of;
the charter of the exempt institution.
(2) For purposes of the determination required under
subdivision (1), ensure that applying the exemption to the
financial institutions described in subdivision (1) will not:
(A) adversely affect the safety and soundness of the financial
institutions; or
(B) unduly constrain Indiana consumer protection
provisions.
(3) Issue an order published in the Indiana Register that
specifies whether the exemption applies to the financial
institutions described in subdivision (1).
(h) If the department denies the request of a financial institution
under this section for exemption from Indiana Code provisions that
are preempted for federally chartered institutions, the requesting
institution may appeal the decision of the department to the circuit
court of the county in which the principal office of the requesting
institution is located.
(i) If the department determines that federal law has preempted a
provision of IC 24, IC 26, IC 28, IC 29, or IC 30 as the provision
applies to an operating subsidiary of a federally chartered entity, the
provision of IC 24, IC 26, IC 28, IC 29, or IC 30 applies to a
qualifying subsidiary (as defined in IC 28-13-16-1) of a state
chartered entity only to the same extent that the department
determines the provision applies to the operating subsidiary of:
(1) the same; or
(2) the functionally equivalent;
type of federally chartered entity. In determining whether to extend
the exemption from a provision of IC 24, IC 26, IC 28, IC 29, or
IC 30 to a qualifying subsidiary (as defined in IC 28-13-16-1) of a
state chartered entity under this subsection, the department shall use
the procedures and undertake the considerations described in this
section for a preemption determination with respect to a state
chartered entity.
As added by P.L.73-2004, SEC.41. Amended by P.L.141-2005,
SEC.21.
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