2013 Indiana Code TITLE 28. FINANCIAL INSTITUTIONS ARTICLE 6.1. SAVINGS BANKS CHAPTER 6. GENERAL POWERS OF A SAVINGS BANK
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IC 28-6.1-6
Chapter 6. General Powers of a Savings Bank
IC 28-6.1-6-1
Discounting, negotiating, selling, and guaranteeing evidences of
debt
Sec. 1. A savings bank may discount, negotiate, sell, and
guarantee promissory notes, bonds, drafts, acceptances, bills of
exchange, and other evidences of debt.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-6-2
Buying and selling exchange, coin, and bullion
Sec. 2. A savings bank may buy and sell exchange, coin, and
bullion.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-6-3
Loaning money
Sec. 3. A savings bank may loan money.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-6-4
Borrowing money
Sec. 4. A savings bank may borrow money and do the following:
(1) Issue notes, bonds, or debentures to evidence that
borrowing.
(2) Mortgage, pledge, or hypothecate any of its assets to secure
the repayment of that money.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-6-5
Receiving savings and demand deposits
Sec. 5. (a) A savings bank may receive savings deposits and,
subject to subsection (b), demand deposits.
(b) If a savings bank accepts demand deposits, the savings bank
shall establish and maintain the reserve balances prescribed by law
applicable to banks and trust companies or by any general rules of
the department, when the law, rules, and regulations apply to all
banks and trust companies alike.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-6-6
Receiving deposits of securities and personal property
Sec. 6. A savings bank may receive deposits of securities or other
personal property from any person or corporation, upon terms agreed
upon by the parties.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-6-7
Contracting for and receiving highest rate of interest
Sec. 7. A savings bank may contract for and receive on loans and
discounts the highest rate of interest allowed to be contracted for and
received by individuals.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-6-8
Accepting drafts for future payment; issuing letters of credit
Sec. 8. A savings bank may accept for future payment drafts
drawn upon the savings bank by its customers and may issue letters
of credit with a specific expiration date authorizing the holders of the
letters to draw drafts upon the savings bank or its correspondents at
sight or on time.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-6-9
Exercising general banking powers; issuing money
Sec. 9. A savings bank may exercise all the powers incidental,
proper, necessary, or usual in carrying on a general banking business,
but it may not issue bills to circulate as money.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-6-10
Receiving deposits of state and federal public funds
Sec. 10. (a) A savings bank may receive deposits of state and
federal public funds:
(1) on the same terms and conditions;
(2) with the same rights and privileges; and
(3) subject to the same duties and obligations;
as provided by law for banks of discount and deposit, trust
companies, and other financial institutions.
(b) The power under subsection (a) includes the right to pledge
securities or other assets for the repayment of the deposits if the
pledge is permitted by applicable law or regulation.
As added by P.L.42-1993, SEC.72. Amended by P.L.35-2010,
SEC.145.
IC 28-6.1-6-11
Acting as fiscal or transfer agent of government bodies
Sec. 11. A savings bank may act as a fiscal or transfer agent of the
United States or of any state, municipality, body politic or corporate,
and in that capacity receive and disburse money.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-6-12
Transferring, registering, and countersigning certificates of stock,
bonds, and other evidences of indebtedness
Sec. 12. A savings bank may transfer, register, and countersign
certificates of stock, bonds, or other evidence of indebtedness and
authenticate and certify the bonds and certificates of indebtedness.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-6-13
Acting as agent to buy and sell transportation
Sec. 13. A savings bank may act as an agent to buy and sell
domestic and foreign transportation.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-6-14
Soliciting and writing insurance; acting as insurance producer for
life insurance or annuity; prohibitions; authority to purchase and
hold life insurance
Sec. 14. (a) A savings bank may solicit and write insurance as an
insurance producer or a broker for any insurance company authorized
to do business in the state or states where the insurance producer or
broker operates.
(b) A savings bank or its affiliate (as defined in IC 28-6.2-1-4)
may act as an insurance producer for the sale of any life insurance
policy or annuity contract issued by a life insurance company (as
defined in IC 27-1-2-3) authorized to do business in the state or states
where the insurance producer operates.
(c) A savings bank or its affiliate that acts as an insurance
producer for the sale of a life insurance policy or an annuity contract
under subsection (b):
(1) is subject to all requirements of IC 27 with respect to the
insurance producer's activity in Indiana; and
(2) must comply with the disclosure requirements under
IC 27-1-38.
(d) A savings bank or its affiliate may not condition:
(1) an extension of credit;
(2) a lease or sale of real or personal property;
(3) the performance of a service; or
(4) the amount charged for:
(A) extending credit;
(B) leasing or selling real or personal property; or
(C) performing services;
upon a person's purchase of a life insurance policy or an annuity
contract from the savings bank or its affiliate.
(e) This section does not prohibit a savings bank or its affiliate
from requiring that a person, as a condition to a transaction, obtain
a life insurance policy from an insurance company acceptable to the
savings bank or its affiliate.
(f) Subject to any limitations or restrictions that the department or
a federal regulator may impose by regulation, rule, policy, or
guidance, a savings bank 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 bank's board.
(2) Life insurance purchased or held to recover the cost of
providing preretirement or postretirement employee benefits
approved by the savings bank's board.
(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.42-1993, SEC.72. Amended by P.L.262-1995,
SEC.67; P.L.188-1997, SEC.8; P.L.63-2001, SEC.14 and
P.L.134-2001, SEC.16; P.L.130-2002, SEC.7; P.L.178-2003,
SEC.92; P.L.10-2006, SEC.36 and P.L.57-2006, SEC.36;
P.L.27-2012, SEC.84.
IC 28-6.1-6-15
Acting as attorney
Sec. 15. A savings bank may act as an attorney in fact or agent of
any foreign or domestic person or corporation for any lawful
purpose.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-6-16
Receiving personal property for deposit
Sec. 16. (a) A savings bank may do the following:
(1) Receive upon deposit for safekeeping or in escrow, money,
bonds, mortgages, jewelry, plate, stock, securities, valuable
papers of any kind, and other personal property.
(2) Lease receptacles for safe deposits of personal property.
(b) The savings bank may prescribe terms and conditions not
inconsistent with this section for the receiving or leasing authorized
by subsection (a).
(c) A savings bank or any of the savings bank's assets are not
liable for the value of any property received by the savings bank
under the power conferred by this section or for damages for the loss,
theft, or misappropriation of the property.
(d) A savings bank may procure and carry insurance for the
benefit of the owners of property received by the savings bank under
the power conferred by this section.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-6-17
Acting under court appointment
Sec. 17. A savings bank may act under court appointment as any
of the following:
(1) Commissioner for the sale of real property.
(2) Guardian of the person or estate of an incapacitated person
(as defined in IC 29-3-1-7.5), or in other instances where a
guardian may be appointed.
(3) Trustee, receiver, conservator, or committee of the property
or estate of a person or corporation in insolvency or bankruptcy
proceedings.
(4) Depository of money paid into court, whether for the benefit
of a person or corporation.
(5) In any other fiduciary capacity.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-6-18
Acting in probate
Sec. 18. (a) A savings bank may do any of the following:
(1) Act as the personal representative of the estate of a deceased
individual.
(2) Act as the trustee under the last will and testament of a
deceased individual.
(3) Act under court appointment as personal representative or
trustee under a last will and testament, when the savings bank
is the successor to a corporation appointed in the last will and
testament.
(b) When an individual is appointed with a savings bank as
receiver, guardian, commissioner, trustee, or personal representative,
the individual's appointment may be under the limitation of powers
and upon the terms and conditions of possession and control of the
trust assets by the savings bank, or otherwise. If the individual is
required to give bond or security, the bond or security shall be as:
(1) the individual and the savings bank agree; and
(2) approved by the court or judge making the appointment.
(c) When an individual who is appointed in a fiduciary capacity
is required to give a bond or security for the faithful performance of
duties, the savings bank may guarantee or become surety for the
individual if:
(1) the savings bank takes possession and control of the assets
involved; and
(2) approved by the court having jurisdiction of the fiduciary.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-6-19
Acting as guardian, trustee, or personal representative
Sec. 19. (a) A savings bank may act under court appointment as
guardian, trustee, or personal representative on the application or
consent of a person acting or entitled to act as such and in the place
of that person.
(b) An appointment under subsection (a) may be made:
(1) upon notice required by law to the persons interested in the
estate or fund; and
(2) with the consent of the principal beneficiaries or other
persons interested in the estate or fund;
as the court making the appointment considers proper.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-6-20
Taking, accepting, and executing trusts
Sec. 20. A savings bank may do any of the following:
(1) Take, accept, and execute a legal trust, duties, and powers
in regard to:
(A) the holding, management, sale, or disposition of
property; and
(B) the rents and profits from that property;
that are granted or confided to the savings bank by any
authority.
(2) Take, accept, and execute a trust and any powers that may
be conferred upon the savings bank by any authority.
(3) Generally execute legal trusts of every description.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-6-21
Acting in fiduciary capacity
Sec. 21. (a) Except as otherwise provided in this article, a savings
bank may act:
(1) in a fiduciary capacity permitted by this article; and
(2) as commissioner for the sale of real estate;
without bond or other security.
(b) When a savings bank is acting in a fiduciary capacity, the
savings bank may administer oaths attested by the signature of the
savings bank's secretary or cashier and the savings bank's seal in the
same fashion as an individual acting in the same capacity may
administer oaths.
(c) The court having jurisdiction of the fiduciary may require a
bond or other security at any time. Upon failure of the savings bank
to give a bond or security as required, the court may remove the
savings bank and revoke the savings bank's appointment.
(d) A savings bank may not pledge or deposit any of its assets as
a condition to the exercise of any of its powers as a fiduciary.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-6-22
Receiving fees, commissions, gifts, and things of value
Sec. 22. Except as otherwise provided by law, an officer, a
trustee, an employee, an agent, or an attorney of a savings bank
commits a Class A misdemeanor if the individual stipulates for,
receives, or agrees to receive a fee, commission, gift, or thing of
value from any person for the purpose of procuring or attempting to
procure for any person:
(1) a loan from a savings bank; or
(2) the purchase or discount of any paper, note, draft, check, or
bill of exchange by a savings bank.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-6-22.5
Profit or commission on sales or purchases; necessity of specific
authorization; surcharge
Sec. 22.5. (a) Except for interest at the legal rate on a loan or
advancement, a savings bank 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 bank 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 bank 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 bank as the
fiduciary.
As added by P.L.192-2003, SEC.5.
IC 28-6.1-6-23
Requesting mergers, consolidations, and joinings
Sec. 23. Notwithstanding any other provision of this article, a
savings bank may request under IC 28-1-7-25 or IC 28-3-2-10 that
the department order its merger, consolidation, or other joining with
a bank or trust company organized under IC 28-1 or with a national
banking association.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-6-24
Request to exercise rights and privileges granted to national banks;
appeal
Sec. 24. (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;
national banks domiciled in Indiana.
(b) Subject to the conditions set forth in this section, a savings
bank may exercise the rights and privileges that are or may be
granted to national banks domiciled in Indiana.
(c) A savings bank that intends to exercise any rights and
privileges that are:
(1) granted to national banks; but
(2) not authorized for a savings bank under the Indiana Code
(except for this section) or any rule adopted under the Indiana
Code;
shall submit a letter to the department describing in detail the
requested rights and privileges granted to national banks that the
savings bank intends to exercise. If available, copies of relevant
federal law, regulations, and interpretive letters must be attached to
the letter submitted by the company.
(d) The department shall promptly notify the requesting savings
bank of the department's receipt of the letter submitted under
subsection (c). Except as provided in subsection (f), the savings bank
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) national banks domiciled in Indiana do not possess the
requested rights and privileges;
(2) the exercise of the requested rights and privileges by the
savings bank would adversely affect the safety and soundness
of the savings bank;
(3) the exercise of the requested rights and privileges by the
savings bank 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 bank.
(f) The sixty (60) day period referred to in subsection (d) may be
extended by the department based on a determination that the savings
bank's letter raised issues requiring additional information or
additional time for analysis. If the sixty (60) day period is extended
under this subsection, the savings bank may exercise the requested
rights and privileges only if the savings bank 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 bank'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 bank in
compliance with and in the manner authorized by this section is not
a violation of any provision of the Indiana Code or rules adopted
under IC 4-22-2.
(h) If a savings bank receives approval to exercise the requested
rights and privileges granted to national banks domiciled in Indiana,
the department shall determine by order whether all savings banks
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
banks 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 bank under
this section to exercise any rights and privileges that are granted to
national banks, the savings bank may appeal the decision of the
department to the circuit court with jurisdiction in the county in
which the principal office of the savings bank is located. In an appeal
under this section, the court shall determine the matter de novo.
As added by P.L.194-1997, SEC.5. Amended by P.L.213-2007,
SEC.62; P.L.217-2007, SEC.60; P.L.35-2010, SEC.146.
IC 28-6.1-6-25
Requirement to provide property tax information in certain
transactions
Sec. 25. With respect to a residential real property financing or
refinancing, a savings bank shall comply with IC 6-1.1-12-43.
As added by P.L.64-2004, SEC.31.
IC 28-6.1-6-26
Authorization for savings banks to use fiduciary funds in conflict
of interest transactions; conditions; notice; required consent
Sec. 26. (a) Unless otherwise provided in an agreement or a trust,
a savings bank that holds funds or property as a fiduciary may use
the funds or property to purchase from the savings bank or an
affiliate of the savings bank a product, service, or security, including
an insurance product or security that is underwritten by the savings
bank, an affiliate of the savings bank, or a syndicate or selling group
that includes the savings bank or an affiliate of the savings bank, if:
(1) the purchase price and any ongoing charges and costs are
fair, reasonable, and substantially equivalent to the cost of
similar products and services; and
(2) the purchase complies with IC 30-4-3.5.
The compensation for the product, service, or security received by
the savings bank or an affiliate of the savings bank or a syndicate or
selling group that includes the savings bank, or an affiliate of the
savings bank, may be in addition to the compensation that the
savings bank is otherwise entitled to from the fiduciary account.
(b) A savings bank that makes a purchase or sale described in
subsection (a) shall disclose, at least annually, to each person entitled
to receive statements of account activity from the savings bank any
purchase or sale made by the savings bank during the year. The
disclosure must be in writing or an electronic format and include the
following:
(1) Any capacity in which the savings bank or an affiliate of the
savings bank acts for:
(A) the issuer of the securities; or
(B) the provider of the products or services;
that is the subject of the purchase or sale.
(2) A statement that the savings bank or an affiliate of the
savings bank has an interest in the subject of the purchase or
sale, if applicable.
(3) The rate and method by which that compensation was
determined.
(4) The name, telephone number, street address, and mailing
address of an officer of the savings bank who may be contacted
for further information.
(5) A notice that the savings bank's ability to make transactions
described in subsection (a) ends upon receipt at any time of a
notice of objection by a majority of the persons entitled to
receive statements of account activity.
(c) The following apply to a purchase or sale under subsection (a):
(1) Except as provided in subdivisions (2) and (3), if the
fiduciary relationship is a trust or an agency, the trustee or agent
shall treat the purchase or sale under subsection (a) as if it were
a conflict of interest transaction under IC 30-4-3-5 and shall
give any notice and obtain any consent that may be required
under IC 30-4-3-5, subject to the following:
(A) IC 30-2-14-16 applies to any notice required to be given
by a trustee or an agent under this subdivision, subject to the
following:
(i) If the fiduciary relationship is a revocable trust with
one (1) or more living grantors, the trustee must give
notice only to the living grantors, who shall be considered
to have all income and principal interests in the trust at the
time the notice is given. If a grantor is incapacitated, the
trustee shall give notice to the grantor's court appointed
guardian, the principal under a durable power of attorney,
or a co-trustee of the revocable trust, unless the guardian,
principal, or co-trustee is the savings bank that seeks the
consent. If the representative of the incapacitated grantor
is the savings bank that seeks the consent to a purchase or
sale under subsection (a), the trustee shall obtain consent
from the court.
(ii) If the fiduciary relationship is a revocable trust and the
assets of the revocable trust are distributable to one (1) or
more other trusts, notice shall be given to the trustees of
the other trusts. However, if the savings bank that seeks
the consent to a purchase or sale under subsection (a) is
the trustee of another trust to which the assets of the
revocable trust are distributable, the savings bank shall
give notice to those beneficiaries of the other trust who are
entitled to receive statements of account activity from the
savings bank.
(iii) If the fiduciary relationship is an agency, the principal
must consent to the purchase or sale under subsection (a)
in writing in advance of the transaction. The principal
shall be considered to have all income and principal
interests in the account at the time the notice of the
proposed transaction is given. If the principal is
incapacitated, consent must be obtained from the
principal's court appointed guardian, unless the guardian
of the incapacitated principal is the savings bank that seeks
the consent. If the guardian of the incapacitated principal
is the savings bank that seeks the consent, consent to a
purchase or sale under subsection (a) must be obtained
from the court supervising the principal's guardianship.
(B) If the fiduciary relationship is a trust, the following
apply with respect to any consent required to be obtained
under IC 30-4-3-5(a)(2):
(i) Notwithstanding the requirement under
IC 30-4-3-5(a)(2)(A) that all interested persons provide
written consent to the proposed action, and subject to
subdivision (2), a trustee, for a proposed purchase or sale
under subsection (a), need only obtain the written consent
of a majority of the persons entitled to notice under
IC 30-2-14-16, as modified by clause (A). However, the
trustee must obtain the written consent of at least one (1)
beneficiary who is receiving income under the trust at the
time of the notice and at least one (1) individual who
would receive a distribution of principal if the trust were
terminated at the time notice is given.
(ii) Upon obtaining the written consents required under
item (i), the trustee need not wait until the period to make
written objections under IC 30-2-14-16 ends in order to
take the proposed action.
(2) Any consent granted under subdivision (1)(B)(i) may be
revoked by a writing signed by a majority of the persons
entitled to notice under IC 30-2-14-16, as modified by
subdivision (1)(A). However, the revocation must be signed by:
(A) at least one (1) beneficiary who is receiving income
under the trust at the time the revocation is signed; and
(B) at least one (1) individual who would receive a
distribution of principal if the trust were terminated at the
time the revocation is signed.
(3) The notice and consent otherwise required under
subdivision (1) are not required if the purchase or sale under
subsection (a) is specifically authorized:
(A) in the document creating the fiduciary relationship; or
(B) under IC 30-4-3-7.
As added by P.L.202-2007, SEC.2; P.L.226-2007, SEC.6. Amended
by P.L.3-2008, SEC.222.
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