2013 Indiana Code TITLE 28. FINANCIAL INSTITUTIONS ARTICLE 15. SAVINGS ASSOCIATIONS CHAPTER 2. POWERS OF SAVINGS ASSOCIATIONS
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IC 28-15-2
Chapter 2. Powers of Savings Associations
IC 28-15-2-1
Enumerated powers; purchasing and holding life insurance
Sec. 1. (a) Savings associations may do the following:
(1) Accept deposit accounts.
(2) Issue evidence of deposit account ownership.
(3) Declare and distribute earnings to members.
(4) Pay, in part or in full, withdrawal requests of deposit
accounts.
(5) Subject to the provisions and restrictions of 12 U.S.C. 84
and 12 CFR 32:
(A) Make loans to members on the security of deposit
accounts.
(B) Make property improvement loans.
(C) Make other loans as provided under IC 28-15-8.
(D) Make mortgage loans.
(E) Accept additional collateral on mortgage loans.
(F) Purchase and sell loans.
(G) Negotiate loan servicing agreements.
(H) Purchase and sell participating interests in loans.
(I) Issue letters of credit with specific expiration dates.
(J) Make secured or unsecured loans, which are partially
insured or guaranteed in any manner by any state of the
United States, the United States government, or any of its
agencies or government sponsored enterprises.
(K) Purchase commercial paper that is denominated in
United States currency and that:
(i) is rated by at least one (1) nationally recognized
investment rating service in one (1) of the two (2) highest
grades; or
(ii) meets another standard of creditworthiness determined
to be appropriate by the director.
(L) Make, purchase, or participate in alternative mortgage
loans as provided in IC 28-15-11.
(6) Acquire and sell real estate in satisfaction of debts
previously contracted.
(7) Acquire real estate for the convenient transaction of its
business. A savings association has the same powers under this
subdivision as a bank or trust company has under IC 28-1-11-5.
(8) Notwithstanding any other law, establish, maintain, or
relocate one (1) or more branch offices by following the
provisions of IC 28-2-13, IC 28-2-17, or IC 28-2-18 as if the
savings association were a bank.
(9) Become a member in any agency or instrumentality of the
federal government. For the purposes of this subdivision,
membership in an agency or instrumentality of the federal
government may include:
(A) purchasing stock;
(B) purchasing notes and debentures; or
(C) borrowing money.
(10) Subject to any limitations imposed by the department
through policy:
(A) invest the money deposited in the savings association in
the shares of the capital stock, bonds, debentures, notes, or
other obligations of a federal home loan bank of the United
States;
(B) become a member of the federal home loan bank of the
district in which Indiana is located or an adjoining district;
(C) borrow money from:
(i) a federal home loan bank described in clause (B);
(ii) the Federal Deposit Insurance Corporation; or
(iii) any other corporation;
(D) transfer, assign to, and pledge with a federal home loan
bank described in clause (B), the Federal Deposit Insurance
Corporation, or any other corporation any of the bonds,
notes, contracts, mortgages, securities, or other property of
the savings association held or acquired as security for the
payment of loans entered into under clause (C); and
(E) exercise all rights, powers, and privileges conferred
upon, and do all things and perform all acts required of,
members or shareholders of a federal home loan bank by the
Federal Home Loan Bank Act (12 U.S.C. 1421 through
1449).
(11) Subject to the provisions and restrictions of 12 U.S.C. 24
and 12 CFR 1, invest in the following types of securities:
(A) Bonds, notes, certificates, and other valid obligations of
the United States government or any agency of the United
States government.
(B) Accounts offered by federally insured banks, savings
banks, and savings associations.
(C) Bonds, notes, or other evidences of indebtedness that are
general obligations supported by the full faith and credit of
any state in the United States or any city, town, or other
political subdivision in any state in the United States if the
obligations:
(i) have been assigned one (1) of the four (4) highest
grades by a nationally recognized investment rating
service; or
(ii) meet another standard of creditworthiness determined
to be appropriate by the director.
(D) Shares of stock of a subsidiary that does not exercise a
power or engage in any activity that is not authorized for the
savings association. The investment power granted by this
subdivision is separate from the investment power granted
by IC 28-15-9.
(E) Corporate debt securities that are denominated in United
States currency and that:
(i) are rated by at least one (1) nationally recognized
investment rating service in one (1) of the four (4) highest
grades; or
(ii) meet another standard of creditworthiness determined
to be appropriate by the director.
Corporate debt securities in which a savings association
invests under this clause must be convertible into stock at
the sole option of the holder, and a savings association is
prohibited from exercising the conversion option.
(F) Shares of open end investment companies that are
eligible for purchase by national banks.
(G) Bankers' acceptances that are eligible for purchase by
national banks.
(12) For the purpose of:
(A) check and deposit sorting and posting;
(B) computation and posting of interest and other credits and
charges;
(C) preparation and mailing of checks, statements, notices,
and similar items; or
(D) other clerical, bookkeeping, accounting, statistical, or
similar functions performed by a savings association;
invest in a corporation organized in any state to perform those
functions for two (2) or more savings associations, each of
which owns a portion of the capital stock of the corporation.
The total investment of a savings association under this
subdivision may not exceed ten percent (10%) of the capital and
surplus of the savings association. A savings association may
not invest in this type of corporation unless the corporation
furnishes assurances to the department that it will subject itself
to examination by the department to the same extent as if the
services were performed by the savings association.
(13) Lend money to other savings associations:
(A) the deposits of which are insured by the Federal Deposit
Insurance Corporation; and
(B) that are incorporated and operating under the laws of any
state or of the United States.
(14) Borrow money and mortgage or pledge its property to
secure payment.
(15) Issue subordinated notes or debentures.
(16) Assess and collect interest, fees, and other charges.
(17) Insure its deposit accounts with the Federal Deposit
Insurance Corporation or its successor.
(18) Act as an agent for the United States or its
instrumentalities.
(19) Accept property for safe keeping or escrow.
(20) Rent or lease safe deposit boxes.
(21) Issue and sell checks, drafts, money orders, and other
instruments for the transmission or payment of money.
(22) Exercise all the powers that:
(A) are incidental and proper; or
(B) may be necessary and usual;
in carrying on the business of the savings association.
(23) Purchase or construct buildings, hold legal title to the
buildings, and lease the buildings for public purposes to
municipal corporations or other public authorities that have
resources sufficient to make payment of all rentals as they
become due. Each lease agreement entered into under this
subdivision must provide that, upon expiration, the lessee will
become the owner of the building.
(24) Open or establish automated teller machines at any
location. An automated teller machine opened or established
under this subdivision may be owned and operated individually
or jointly on a cost sharing or fee basis.
(25) Act:
(A) in any fiduciary capacity in which a bank or trust
company is permitted to act under this title; and
(B) as an agent for the sale of real estate, without bond or
other security.
(26) Accept and maintain demand deposit accounts if the
savings association is insured by the Federal Deposit Insurance
Corporation or its successor.
(27) Without the approval of the department, to the extent
authorized by the board of directors of the savings association,
establish or maintain agencies that:
(A) only service and originate, but do not approve, loans and
contracts; or
(B) manage or sell real estate owned by the savings
association.
An agency established or maintained under this subdivision
may offer any services not referred to in this subdivision with
the approval of the department, except for accepting payment
on savings accounts. An agency shall maintain records of all
business it transacts and transmit copies to a branch or home
office of the savings association.
(b) Subject to any limitations or restrictions that the department
or a federal regulator may impose by regulation, rule, policy, or
guidance, a savings association may purchase and hold life insurance
as follows:
(1) Life insurance purchased or held in connection with
employee compensation or benefit plans approved by the
savings association's board of directors.
(2) Life insurance purchased or held to recover the cost of
providing preretirement or postretirement employee benefits
approved by the savings association's board of directors.
(3) Life insurance on the lives of borrowers.
(4) Life insurance held as security for a loan.
(5) Life insurance that a national bank may purchase or hold
under 12 U.S.C. 24 (Seventh).
As added by P.L.193-1997, SEC.2. Amended by P.L.258-2003,
SEC.30; P.L.10-2006, SEC.79 and P.L.57-2006, SEC.79;
P.L.89-2011, SEC.73; P.L.27-2012, SEC.111.
IC 28-15-2-1.5
Profit or commission on sales or purchases; necessity of specific
authorization; surcharge
Sec. 1.5. (a) Except for interest at the legal rate on a loan or
advancement, a savings association may not, directly or indirectly,
receive a profit or commission from the sale to or purchase from an
estate, a guardianship, or a trust of which the savings association is
the fiduciary unless the profit or commission is authorized by
agreement with the creator of the trust or a court with jurisdiction
over the estate, guardianship, or trust.
(b) A savings association that receives a profit or commission in
violation of subsection (a) shall be surcharged an amount equal to the
profit or commission. In addition, a court with jurisdiction over the
estate, guardianship, or trust may remove the savings association as
the fiduciary.
As added by P.L.192-2003, SEC.8.
IC 28-15-2-2
Request to exercise rights and privileges granted federal savings
associations; appeal
Sec. 2. (a) As used in this section, "rights and privileges" means
the power:
(1) to:
(A) create;
(B) deliver;
(C) acquire; or
(D) sell;
a product, a service, or an investment that is available to or
offered by; or
(2) to engage in mergers, consolidations, reorganizations, or
other activities or to exercise other powers authorized for;
federal savings associations domiciled in Indiana.
(b) Subject to this section, savings associations may exercise the
rights and privileges that are granted to federal savings associations.
(c) A savings association that intends to exercise any rights and
privileges that are:
(1) granted to federal savings associations; but
(2) not authorized for savings associations under:
(A) the Indiana Code (except for this section); or
(B) a rule adopted under IC 4-22-2;
shall submit a letter to the department, describing in detail the
requested rights and privileges granted to federal savings
associations that the savings association intends to exercise. If
available, copies of relevant federal law, regulations, and interpretive
letters must be attached to the letter.
(d) The department shall promptly notify the requesting savings
association of its receipt of the letter submitted under subsection (c).
Except as provided in subsection (f), the savings association may
exercise the requested rights and privileges sixty (60) days after the
date on which the department receives the letter unless otherwise
notified by the department.
(e) The department may deny the requested rights and privileges
if the department finds that:
(1) federal savings associations in Indiana do not possess the
requested rights and privileges;
(2) the exercise of the requested rights and privileges by the
savings association would adversely affect the safety and
soundness of the savings association;
(3) the exercise of the requested rights and privileges by the
savings association would result in an unacceptable curtailment
of consumer protection; or
(4) the failure of the department to approve the requested rights
and privileges will not result in a competitive disadvantage to
the savings association.
(f) The sixty (60) day period referred to in subsection (d) may be
extended by the department based on a determination that the savings
association letter raises issues requiring additional information or
additional time for analysis. If the sixty (60) day period is extended
under this subsection, the savings association may exercise the
requested rights and privileges only if the savings association
receives prior written approval from the department. However:
(1) the department must:
(A) approve or deny the requested rights and privileges; or
(B) convene a hearing;
not later than sixty (60) days after the department receives the
savings association's letter; and
(2) if a hearing is convened, the department must approve or
deny the requested rights and privileges not later than sixty (60)
days after the hearing is concluded.
(g) The exercise of rights and privileges by a savings association
in compliance with and in the manner authorized by this section does
not constitute a violation of any provision of the Indiana Code or
rules adopted under IC 4-22-2.
(h) If a savings association receives approval to exercise the
requested rights and privileges granted to national savings
associations domiciled in Indiana, the department shall determine by
order whether all savings associations may exercise the same rights
and privileges. In making the determination required by this
subsection, the department must ensure that the exercise of the rights
and privileges by all savings associations will not:
(1) adversely affect their safety and soundness; or
(2) unduly constrain Indiana consumer protection provisions.
(i) If the department denies the request of a savings association
under this section to exercise any rights and privileges that are
granted to national savings associations, the company may appeal the
decision of the department to the circuit court with jurisdiction in the
county in which the principal office of the savings association is
located.
As added by P.L.193-1997, SEC.2. Amended by P.L.73-2004,
SEC.44; P.L.213-2007, SEC.105; P.L.217-2007, SEC.103;
P.L.35-2010, SEC.206.
IC 28-15-2-3
Denial of rights and privileges; appeal
Sec. 3. If the department denies the request of a savings
association under section 2 of this chapter to exercise any rights and
privileges that are granted to federal savings associations, the savings
association may appeal the decision of the department to the circuit
court with jurisdiction in the county in which the principal office of
the savings association is located. In an appeal under this section, the
court shall determine the matter de novo.
As added by P.L.193-1997, SEC.2.
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