2013 Indiana Code TITLE 28. FINANCIAL INSTITUTIONS ARTICLE 6.1. SAVINGS BANKS CHAPTER 7. POWERS OF A SAVINGS BANK SUBJECT TO THE RULES OF THE DEPARTMENT
Download as PDF
IC 28-6.1-7
Chapter 7. Powers of a Savings Bank Subject to the Rules of
the Department
IC 28-6.1-7-1
Application of rules
Sec. 1. (a) The powers of a savings bank set forth in this chapter
are subject to the rules of the department.
(b) A rule adopted under this chapter may apply to one (1) or
more savings banks or to one (1) or more localities in Indiana as the
department determines.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-7-2
Making FHA loans, advances of credit, and purchases of
obligations
Sec. 2. (a) A savings bank may make loans and advances of credit
and purchases of obligations representing loans and advances of
credit that are eligible for insurance by the federal housing
administrator and to obtain such insurance.
(b) An Indiana law:
(1) prescribing the nature, amount, or form of security;
(2) requiring security upon which loans or advances of credit
may be made;
(3) prescribing or limiting interest rates upon loans or advances
of credit; or
(4) prescribing or limiting the period for which loans or
advances of credit may be made;
does not apply to loans, advances of credit, or purchases made under
this section.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-7-3
Making FHA loans secured by mortgages
Sec. 3. (a) A savings bank may make loans secured by mortgages
on real property or leasehold, as the federal housing administrator
insures or makes a commitment to insure, and to obtain such
insurance.
(b) An Indiana law:
(1) prescribing the nature, amount, or form of security;
(2) requiring security upon which loans or advances of credit
may be made;
(3) prescribing or limiting interest rates upon loans or advances
of credit; or
(4) prescribing or limiting the period for which loans or
advances of credit may be made;
does not apply to loans made under this section.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-7-4
Purchasing, investing in, and disposing of FHA and national
mortgage association bonds, notes, and debentures
Sec. 4. (a) A savings bank may purchase, invest in, and dispose of
any of the following:
(1) Notes or bonds secured by mortgage or trust deed insured by
the federal housing administrator.
(2) Debentures issued by the federal housing administrator.
(3) Bonds or other securities issued by national mortgage
associations.
(b) An Indiana law:
(1) prescribing the nature, amount, or form of security;
(2) requiring security upon which loans or advances of credit
may be made;
(3) prescribing or limiting interest rates upon loans or advances
of credit; or
(4) prescribing or limiting the period for which loans or
advances of credit may be made;
does not apply to purchases, investments, or dispositions made under
this section.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-7-5
Extending credit to state agencies
Sec. 5. (a) A savings bank may extend credit to any state agency,
with the approval of the department, notwithstanding any other
provisions or limitations of IC 28-1.
(b) An Indiana law:
(1) prescribing the nature, amount, or form of security;
(2) requiring security upon which loans or advances of credit
may be made;
(3) prescribing or limiting interest rates upon loans or advances
of credit; or
(4) prescribing or limiting the period for which loans or
advances of credit may be made;
does not apply to loans or advances of credit made under this section.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-7-6
Purchasing, taking, holding, and disposing of incorporated joint
stock land bank notes and mortgages
Sec. 6. (a) A savings bank may purchase, take, hold, and dispose
of notes and mortgages securing the notes, made to any incorporated
joint stock land bank if not less than ninety-nine percent (99%) of the
stock of the joint stock land bank is owned by the savings bank at the
time the notes or mortgages are acquired by the savings bank.
(b) Upon dissolution of the joint stock land bank, or at any stage
in the process of the dissolution, a savings bank then owning not less
than ninety-nine percent (99%) of the stock of the joint stock land
bank may take, hold, and dispose of notes, mortgages, or other assets
of the joint stock land bank of any nature, including real estate,
wherever located, that the joint stock land bank assigns, transfers,
conveys, or otherwise makes over to the savings bank by way of final
or partial distribution of the joint stock land bank's assets to the joint
stock land bank's stockholders upon the dissolution or in connection
with the process of the dissolution.
(c) An Indiana law:
(1) prescribing the nature, amount, location, or form of security;
(2) requiring security upon which loans or advances of credit
may be made;
(3) prescribing or limiting interest rates upon loans or advances
of credit;
(4) prescribing or limiting the period for which loans or
advances of credit may be made;
(5) prescribing any ratio between the amount of a loan and the
appraised value of the security for the loan; or
(6) requiring periodic reductions of the principal of a loan;
does not apply to loans, notes, mortgages, real estate, or other assets
subject to this section.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-7-7
Owning and leasing property
Sec. 7. Subject to any restrictions the department may impose, a
savings bank may:
(1) become the owner or lessor of personal or real property
upon the request of and for the use of a customer; and
(2) incur additional obligations incident to becoming an owner
or a lessor of the property.
As added by P.L.42-1993, SEC.72. Amended by P.L.11-1998,
SEC.11.
IC 28-6.1-7-8
Purchasing and constructing buildings to be leased to public
authorities
Sec. 8. (a) A savings bank may purchase or construct buildings
and hold legal title to a building to be leased to a municipal
corporation or other public authority, for public purposes, having
resources sufficient to make payment of all rentals as the payments
become due.
(b) A lease agreement shall provide that upon expiration, the
lessee will become the owner of the building.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-7-9
Purchasing, holding, and conveying real property to be used as
branch savings bank and rental property; resolution
Sec. 9. (a) Subject to the prior written approval of the department,
a savings bank may purchase, hold, and convey real property that is:
(1) improved or to be improved by a single, freestanding
building; and
(2) to be used, in part, as a branch of the savings bank and, in
part, as rental property for one (1) lessee.
(b) If real estate described in subsection (a) is held by a savings
bank for at least one (1) year without being used as described in
subsection (a), the board of directors of the savings bank shall state,
by resolution, definite plans for the use of the real estate. A
resolution adopted under this subsection shall be made available for
inspection by the department.
(c) Unless a written extension of time is given by the department
under this subsection, the savings bank shall open the branch not
later than three (3) years after the acquisition date of the real estate.
The department may grant an extension of time for the savings bank
to open the branch if:
(1) the board of directors of the savings bank, by resolution:
(A) reaffirms annually that the savings bank expects to use
the real estate as described in subsection (a) in the future;
and
(B) explains the reason why the real estate has not yet been
used as described in subsection (a); and
(2) the director determines that:
(A) the continued holding of the real estate by the savings
bank does not endanger the safety and soundness of the
savings bank; and
(B) the savings bank is holding the real estate to use the real
estate in the future for one (1) of the purposes set forth in
subsection (a).
(d) If the savings bank:
(1) does not open a branch on the real estate within the period
specified in subsection (c); or
(2) removes its branch from the real estate;
the savings bank shall divest itself of all interest in the real estate not
more than ten (10) years after the acquisition date of the real estate,
if a branch was not opened, or ten (10) years after the removal date
of the branch office.
(e) Except with the written approval of the department, the sum
invested in real property and buildings used for the convenient
transaction of the savings bank's business as provided in this section
may not exceed fifty percent (50%) of the surplus and retained
earnings of the savings bank.
As added by P.L.42-1993, SEC.72. Amended by P.L.213-2007,
SEC.63; P.L.217-2007, SEC.61.
IC 28-6.1-7-10
Repealed
(Repealed by P.L.215-1999, SEC.16.)
IC 28-6.1-7-11
Equity investments in community development corporations and
community based economic development; limits; exceptions to
limits; exposure to liability
Sec. 11. (a) As used in this section, "community based economic
development" refers to activities that seek to address economic
causes of poverty within specific geographic areas, revitalizing the
economic and social base of low income communities through
activities that include:
(1) affordable housing development;
(2) small business and micro-enterprise support;
(3) commercial, industrial, and retail revitalization, retention,
and expansion;
(4) capacity development and technical assistance support for
community development corporations;
(5) employment and training efforts;
(6) human resource development; and
(7) social service enterprises.
(b) As used in this section, "community development corporation"
means a private, nonprofit corporation:
(1) whose board of directors is comprised primarily of
community representatives and business, civic, and community
leaders; and
(2) whose principal purpose includes the provision of:
(A) housing;
(B) community based economic development projects; and
(C) social services;
that primarily benefit low income individuals and communities.
(c) As used in this section, "capital and surplus" has the meaning
set forth in IC 28-1-1-3(10).
(d) Subject to the limitations of this section, other laws, and any
regulation, rule, policy, or guidance adopted by the department
concerning investments in community based economic development,
a savings bank may invest directly or indirectly in equity investments
in a corporation, a limited partnership, a limited liability company,
or another entity organized as:
(1) a community development corporation;
(2) an entity formed primarily to support community based
economic development;
(3) an entity qualifying for the new markets tax credits under 26
U.S.C. 45D; or
(4) an entity approved by the director as being formed for a
predominantly civic, community, or public purpose and that:
(A) primarily benefits low and moderate income individuals;
(B) primarily benefits low and moderate income areas;
(C) primarily benefits areas targeted for redevelopment by
a government entity; or
(D) is a qualified investment under 12 CFR 25.23 for
purposes of the Community Reinvestment Act of 1977 (12
U.S.C. 2901 et seq.).
(e) Except as provided in subsection (f), the aggregate of all
equity investments by a savings bank under subsection (d) may not
exceed:
(1) five percent (5%) of the capital and surplus of the savings
bank without the prior written approval of the director; and
(2) fifteen percent (15%) of the capital and surplus of the
savings bank under any circumstances.
(f) In determining whether to permit the aggregate of all equity
investments by a savings bank under subsection (d) to exceed five
percent (5%) of the capital and surplus of the savings bank under
subsection (e)(1), the director shall consider whether:
(1) the aggregate of all equity investments under subsection (d)
will pose a significant risk to the affected deposit insurance
fund; and
(2) the savings bank is adequately capitalized.
(g) A savings bank shall not make any investment under this
section if the investment would expose the savings bank to unlimited
liability.
As added by P.L.42-1993, SEC.72. Amended by P.L.136-1994,
SEC.5; P.L.2-1995, SEC.114; P.L.27-2012, SEC.85.
IC 28-6.1-7-12
Purchasing, holding, and conveying real estate necessary for
transaction of business
Sec. 12. (a) A savings bank may purchase, hold, and convey real
estate that is necessary for the convenient transaction of the business
of the savings bank.
(b) For the purposes of this section, real estate purchased or held
for the convenient transaction of the business of a savings bank
includes the following:
(1) Real estate on which the principal office or a branch office
of the savings bank is located.
(2) Real estate that is the location of facilities supporting the
operations of the savings bank, such as parking facilities, data
processing centers, loan production offices, automated teller
machines, night depositories, facilities necessary for the
operations of a savings bank, or other facilities that are
approved by the director.
(3) Real estate that the board of the savings bank expects, in
good faith, to use as a savings bank office or facility in the
future.
(c) If real estate referred to in subsection (b)(3) is held by a
savings bank for one (1) year without being used as a savings bank
office or facility, the board of trustees of the savings bank shall state,
by resolution, definite plans for the use of the real estate. A
resolution adopted under this subsection shall be made available for
inspection by the department.
(d) Real estate referred to in subsection (b)(3) may not be held by
a savings bank for more than three (3) years without being used as a
savings bank office or facility unless both of the following apply:
(1) The board of the savings bank, by resolution:
(A) reaffirms annually that the savings bank expects to use
the real estate as a savings bank office or facility in the
future; and
(B) explains the reason why the real estate has not yet been
used as a savings bank office or facility.
(2) The director determines that both of the following apply:
(A) The continued holding of the real estate by the savings
bank does not endanger the safety and soundness of the
savings bank.
(B) The savings bank is holding the real estate to use in the
future for one (1) of the purposes set forth in subsection
(b)(1) and (b)(2).
(e) Real estate referred to in subsection (b)(3) may not be held by
a savings bank for more than ten (10) years without being used as a
savings bank office or facility unless the department consents in
writing to the continued holding of the real estate by the savings
bank.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-7-13
Paying interest and expenses
Sec. 13. A savings bank may not pay:
(1) interest contracted for with a depositor; or
(2) other expenses incurred in operating the business of the
savings bank;
except from current earnings or undivided profits without the
approval of the department.
As added by P.L.42-1993, SEC.72.
Disclaimer: These codes may not be the most recent version. Indiana may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
