2013 Indiana Code TITLE 28. FINANCIAL INSTITUTIONS ARTICLE 11. DEPARTMENT OF FINANCIAL INSTITUTIONS CHAPTER 5. DEPARTMENT OVERSIGHT OF ORGANIZATION OF A FINANCIAL INSTITUTION
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IC 28-11-5
Chapter 5. Department Oversight of Organization of a
Financial Institution
IC 28-11-5-1
Application of chapter
Sec. 1. This chapter applies to the following financial institutions:
(1) A bank.
(2) A savings association.
(3) A credit union.
(4) A savings bank.
(5) A trust company.
(6) A corporate fiduciary.
As added by P.L.42-1993, SEC.91. Amended by P.L.262-1995,
SEC.78; P.L.79-1998, SEC.86.
IC 28-11-5-2
Approval of articles of incorporation and organization and
establishment of financial institutions
Sec. 2. (a) A financial institution may not be organized,
incorporated, or engage in business in Indiana until the department
has approved the following:
(1) The articles of incorporation of the proposed financial
institution.
(2) The organization and establishment of the financial
institution in the city or town in which the incorporators
propose to establish the financial institution.
(b) A person who violates this section commits a Class A
misdemeanor.
As added by P.L.42-1993, SEC.91.
IC 28-11-5-3
Applications to establish financial institutions
Sec. 3. (a) A request to establish a financial institution must be set
forth in an application:
(1) prescribed by the department; and
(2) containing the information required by the department.
(b) Within twenty (20) business days after receiving an
application under this section, the department shall:
(1) accept the application for processing;
(2) request additional information to complete the application;
or
(3) return the application if it is incomplete.
As added by P.L.42-1993, SEC.91. Amended by P.L.122-1994,
SEC.111.
IC 28-11-5-4
Investigation of applicant; disapproval of application; submission
of fingerprints
Sec. 4. (a) Upon the acceptance of an application under section 3
of this chapter, the department shall investigate and consider all of
the following:
(1) The financial standing and character of the incorporators,
organizers, directors, principal shareholders, or controlling
corporations.
(2) The character, qualifications, and experience of the officers
and directors of the proposed financial institution.
(3) The future earnings prospects for the proposed financial
institution.
(4) The adequacy of the financial institution's proposed capital,
if the financial institution is to be a bank, trust company,
corporate fiduciary, or savings bank.
(b) The members of the department may disapprove the
application if:
(1) any of the factors listed in subsection (a) are determined to
be unfavorable;
(2) any of the incorporators, directors, principal shareholders,
or officers of the proposed financial institution have been
convicted of a felony under Indiana law, the laws of any other
state, or the laws of the United States; or
(3) the applicant has knowingly or intentionally submitted an
application under this chapter that contains false information.
(c) The applicant shall submit to the department or to the Indiana
state police, as appropriate, two (2) sets of fingerprints for each
incorporator, director, principal shareholder, and officer, if requested
by the department under section 4.5 of this chapter.
As added by P.L.42-1993, SEC.91. Amended by P.L.122-1994,
SEC.112; P.L.262-1995, SEC.79; P.L.192-1997, SEC.24;
P.L.90-2008, SEC.74.
IC 28-11-5-4.5
Background checks; fingerprints
Sec. 4.5. (a) To obtain additional information for the purposes of
section 4 of this chapter, the director may require:
(1) criminal background checks, including a national criminal
history background check (as defined in IC 10-13-3-12) by the
Federal Bureau of Investigation;
(2) credit histories; and
(3) other background checks considered necessary by the
director;
for any incorporator, director, principal shareholder, or officer of a
proposed financial institution.
(b) If the director requests a national criminal history background
check under subsection (a) for any individual described in subsection
(a), the director shall require the individual to submit fingerprints to
the department or to the state police department, as appropriate. The
individual to whom the request is made shall pay any fees or costs
associated with the fingerprints and the national criminal history
background check. A national criminal history background check
conducted under subsection (a) may be used by the department to:
(1) conduct an investigation under section 4(a)(1) or 4(a)(2) of
this chapter; or
(2) disapprove an application under section 4(b)(2) of this
chapter.
The director or the department may not release the results of the
national criminal history background check to any private entity.
As added by P.L.192-1997, SEC.25. Amended by P.L.90-2008,
SEC.75.
IC 28-11-5-5
Hearings on applications
Sec. 5. (a) The department may hold a hearing to determine
whether to approve an application filed under section 3 of this
chapter.
(b) A hearing may not be held until ten (10) days after the date of
the publication of the notice required by section 6 of this chapter.
(c) If the department holds a hearing under this section, the
hearing must be held within ninety (90) days after the application is
accepted by the department for processing.
As added by P.L.42-1993, SEC.91. Amended by P.L.122-1994,
SEC.113.
IC 28-11-5-6
Notice of applications subject to hearings
Sec. 6. (a) If a public hearing is held under section 5 of this
chapter, the applicant shall give notice of the application by
publication one (1) time in a newspaper of general circulation in the
city or town in which the applicant proposes to establish the financial
institution. If a newspaper is not published in the city or town, the
notice shall be published in one (1) newspaper of general circulation
published in the county in which the city or town is located.
(b) The notice required by this section must state the following:
(1) The fact that the application has been filed.
(2) The names of the applicants.
(3) The place where the applicants propose to establish the
financial institution.
(4) The date and place of the hearing.
(5) Other facts the department considers relevant.
As added by P.L.42-1993, SEC.91.
IC 28-11-5-7
Hearing procedures
Sec. 7. (a) This section applies only if the department holds a
hearing under section 5 of this chapter.
(b) At the time and place designated in the notice, any of the
following may conduct the hearing:
(1) All the members of the department.
(2) Any number of the members.
(3) The director of the department.
(4) A deputy director of the department.
(5) The supervisor in charge of the division of the department
that would have jurisdiction of the financial institution, if it is
established.
(c) Any person who is interested may appear and be heard, either
in person or by the person's attorney.
(d) A report of the hearing, in the form and detail the department
prescribes, shall be prepared and filed in the department.
As added by P.L.42-1993, SEC.91. Amended by P.L.122-1994,
SEC.114.
IC 28-11-5-8
Approval or disapproval of applications
Sec. 8. Within a reasonable time after the application is accepted
by the department for processing, but not more than one hundred
twenty (120) days from the later of:
(1) the date on which the application is accepted by the
department; or
(2) the date on which the hearing is held, if a hearing is held;
the department shall either approve or disapprove the application.
As added by P.L.42-1993, SEC.91. Amended by P.L.122-1994,
SEC.115.
IC 28-11-5-9
Payment of expenses
Sec. 9. (a) The applicants shall pay all expenses incurred by the
department in performing its duty under this chapter.
(b) At the time of filing the application, the applicants shall
deposit with the department the amount of money fixed by the
department necessary to defray the expenses incurred by the
department in implementing this chapter with respect to the
application.
(c) The department shall return to the applicants any balance
remaining after proceedings under this chapter are completed.
As added by P.L.42-1993, SEC.91.
IC 28-11-5-10
Financial institutions organized as limited liability companies;
treatment as financial institution organized in stock form;
exclusive authority of department to regulate; prior approval of
department required
Sec. 10. (a) Subject to subsection (g), a financial institution
described in section 1 of this chapter that is subject to this chapter
may:
(1) be organized as a limited liability company;
(2) convert to a limited liability company; or
(3) merge with or into a limited liability company;
under the laws of Indiana or the United States, including any rules or
regulations adopted or promulgated under the laws of Indiana or the
United States.
(b) A financial institution organized as a limited liability company
is subject to:
(1) IC 23-18; and
(2) this title.
If a provision of IC 23-18 conflicts with a provision of this title or
with any rule of the department, the provision of this title or the rule
of the department controls.
(c) Any filing required to be made under IC 23-18 shall be made
in the same manner as for a financial institution that is organizing or
is organized in stock form.
(d) The department may prescribe any requirements for:
(1) the articles of organization; and
(2) the operating agreement;
of a financial institution that is organized and operates as a limited
liability company.
(e) The department has the exclusive authority under this title to
regulate a financial institution organized as a limited liability
company. A financial institution that is a limited liability company
is subject to the department's authority in the same manner as a bank
that is organized in stock form.
(f) A financial institution that is a limited liability company is
subject to the provisions of this title that apply to banks, except for
the provisions concerning corporate governance (IC 28-13), in the
same manner as a financial institution that is organized in stock form,
subject to the following:
(1) In the case of a manager managed limited liability company,
"director" means a manager of the limited liability company.
(2) In the case of a member managed limited liability company,
"director" means a member of the limited liability company.
(g) A financial institution may not:
(1) organize as;
(2) convert to; or
(3) merge with or into;
a limited liability company without the prior approval of the
department under this title.
As added by P.L.90-2008, SEC.76. Amended by P.L.27-2012,
SEC.108; P.L.13-2013, SEC.74.
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