PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the word NEW will appear in that style type in the introductory clause of each SECTION that adds a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts between statutes enacted by the 2006 Regular Session of the General Assembly.

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     AN ACT to amend the Indiana Code concerning financial institutions.

SOURCE: IC 4-21.5-3-7; (07)SE0559.1.1. -->

    SECTION 1. IC 4-21.5-3-7, AS AMENDED BY P.L.222-2005, SECTION 22, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 7. (a) To qualify for review of a personnel action to which IC 4-15-2 applies, a person must comply with IC 4-15-2-35 or IC 4-15-2-35.5. To qualify for review of any other order described in section 4, 5, or 6 of this chapter, a person must petition for review in a writing that does the following:
        (1) States facts demonstrating that:
            (A) the petitioner is a person to whom the order is specifically directed;
            (B) the petitioner is aggrieved or adversely affected by the order; or
            (C) the petitioner is entitled to review under any law.
        (2) Includes, with respect to determinations of notice of program reimbursement and audit findings described in section 6(a)(3) and 6(a)(4) of this chapter, a statement of issues that includes:
            (A) the specific findings, action, or determination of the office of Medicaid policy and planning or of a contractor of the office of Medicaid policy and planning from which the provider is appealing;
            (B) the reason the provider believes that the finding, action, or determination of the office of Medicaid policy and planning or

of a contractor of the office of Medicaid policy and planning was in error; and
            (C) with respect to each finding, action, or determination of the office of Medicaid policy and planning or of a contractor of the office of Medicaid policy and planning, the statutes or rules that support the provider's contentions of error.
        Not more than thirty (30) days after filing a petition for review under this section, and upon a finding of good cause by the administrative law judge, a person may amend the statement of issues contained in a petition for review to add one (1) or more additional issues.
        (3) Is filed:
            (A) if with respect to an order described in section 4, 5, 6(a)(1), or 6(a)(2), or 6(a)(5) of this chapter, with the ultimate authority for the agency issuing the order within fifteen (15) days after the person is given notice of the order or any longer period set by statute; or
            (B) if with respect to a determination described in section 6(a)(3) or 6(a)(4) of this chapter, with the office of Medicaid policy and planning not more than one hundred eighty (180) days after the hospital is provided notice of the determination.
        The issuance of an amended notice of program reimbursement by the office of Medicaid policy and planning does not extend the time within which a hospital must file a petition for review from the original notice of program reimbursement under clause (B), except for matters that are the subject of the amended notice of program reimbursement.
If the petition for review is denied, the petition shall be treated as a petition for intervention in any review initiated under subsection (d).
    (b) If an agency denies a petition for review under subsection (a) and the petitioner is not allowed to intervene as a party in a proceeding resulting from the grant of the petition for review of another person, the agency shall serve a written notice on the petitioner that includes the following:
        (1) A statement that the petition for review is denied.
        (2) A brief explanation of the available procedures and the time limit for seeking administrative review of the denial under subsection (c).
    (c) An agency shall assign an administrative law judge to conduct a preliminary hearing on the issue of whether a person is qualified under subsection (a) to obtain review of an order when a person requests reconsideration of the denial of review in a writing that:

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        (1) states facts demonstrating that the person filed a petition for review of an order described in section 4, 5, or 6 of this chapter;
        (2) states facts demonstrating that the person was denied review without an evidentiary hearing; and
        (3) is filed with the ultimate authority for the agency denying the review within fifteen (15) days after the notice required by subsection (b) was served on the petitioner.
Notice of the preliminary hearing shall be given to the parties, each person who has a pending petition for intervention in the proceeding, and any other person described by section 5(d) of this chapter. The resulting order must be served on the persons to whom notice of the preliminary hearing must be given and include a statement of the facts and law on which it is based.
    (d) If a petition for review is granted, the petitioner becomes a party to the proceeding and the agency shall assign the matter to an administrative law judge or certify the matter to another agency for the assignment of an administrative law judge (if a statute transfers responsibility for a hearing on the matter to another agency). The agency granting the administrative review or the agency to which the matter is transferred may conduct informal proceedings to settle the matter to the extent allowed by law.

SOURCE: IC 5-11-1-9; (07)SE0559.1.2. -->     SECTION 2. IC 5-11-1-9, AS AMENDED BY P.L.4-2005, SECTION 25, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 9. (a) The state examiner, personally or through the deputy examiners, field examiners, or private examiners, shall examine all accounts and all financial affairs of every public office and officer, state office, state institution, and entity.
    (b) An examination of an entity deriving:
        (1) less than fifty percent (50%); or
        (2) at least fifty percent (50%) but less than one hundred thousand dollars ($100,000) if the entity is organized as a not-for-profit corporation;
of its disbursements during the period of time subject to an examination from appropriations, public funds, taxes, and other sources of public expense shall be limited to matters relevant to the use of the public money received by the entity.
    (c) The examination of an entity described in subsection (b) may be waived or deferred by the state examiner if the state examiner determines in writing that all disbursements of public money during the period subject to examination were made for the purposes for which the money was received. However, the:
        (1) Indiana economic development corporation created by

IC 5-28-3 and the corporation's funds, accounts, and financial affairs; and
        (2) department of financial institutions established by IC 28-11-1-1 and the department's funds, accounts, and financial affairs;
shall be examined biennially by the state board of accounts.
    (d) On every examination under this section, inquiry shall be made as to the following:
        (1) The financial condition and resources of each municipality, office, institution, or entity.
        (2) Whether the laws of the state and the uniform compliance guidelines of the state board of accounts established under section 24 of this chapter have been complied with.
        (3) The methods and accuracy of the accounts and reports of the person examined.
The examinations shall be made without notice.
    (e) If during an examination of a state office under this chapter the examiner encounters an inefficiency in the operation of the state office, the examiner may comment on the inefficiency in the examiner's report.
    (f) The state examiner, deputy examiners, any field examiner, or any private examiner, when engaged in making any examination or when engaged in any official duty devolved upon them by the state examiner, is entitled to do the following:
        (1) Enter into any state, county, city, township, or other public office in this state, or any entity, agency, or instrumentality, and examine any books, papers, documents, or electronically stored information for the purpose of making an examination.
        (2) Have access, in the presence of the custodian or the custodian's deputy, to the cash drawers and cash in the custody of the officer.
        (3) During business hours, examine the public accounts in any depository that has public funds in its custody pursuant to the laws of this state.
    (g) The state examiner, deputy examiner, or any field examiner, when engaged in making any examination authorized by law, may issue subpoenas for witnesses to appear before the examiner in person or to produce books, papers, or other records (including records stored in electronic data processing systems) for inspection and examination. The state examiner, deputy examiner, and any field examiner may administer oaths and examine witnesses under oath orally or by interrogatories concerning the matters under investigation and examination. Under the authority of the state examiner, the oral

examinations may be transcribed with the reasonable expense paid by the examined person in the same manner as the compensation of the field examiner is paid. The subpoenas shall be served by any person authorized to serve civil process from any court in this state. If a witness duly subpoenaed refuses to attend, refuses to produce information required in the subpoena, or attends and refuses to be sworn or affirmed, or to testify when called upon to do so, the examiner may apply to the circuit court having jurisdiction of the witness for the enforcement of attendance and answers to questions as provided by the law governing the taking of depositions.

SOURCE: IC 5-22-1-2; (07)SE0559.1.3. -->     SECTION 3. IC 5-22-1-2, AS AMENDED BY HEA 1281-2007, SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 2. Except as provided in this article, this article does not apply to the following:
        (1) The commission for higher education.
        (2) A state educational institution. However, IC 5-22-5-9 and IC 5-22-15 apply to a state educational institution.
        (3) Military officers and military and armory boards of the state.
        (4) An entity established by the general assembly as a body corporate and politic. However, IC 5-22-15 applies to a body corporate and politic.
        (5) A local hospital authority under IC 5-1-4.
        (6) A municipally owned utility under IC 8-1-11.1 or IC 8-1.5.
        (7) Hospitals established and operated under IC 16-22-1 through IC 16-22-5, IC 16-22-8, IC 16-23-1, or IC 16-24-1.
        (8) A library board under IC 36-12-3-16(b).
        (9) A local housing authority under IC 36-7-18.
        (10) Tax exempt Indiana nonprofit corporations leasing and operating a city market owned by a political subdivision.
        (11) A person paying for a purchase or lease with funds other than public funds.
        (12) A person that has entered into an agreement with a governmental body under IC 5-23.
        (13) A municipality for the operation of municipal facilities used for the collection, treatment, purification, and disposal in a sanitary manner of liquid and solid waste, sewage, night soil, and industrial waste.
        (14) The department of financial institutions established by IC 28-11-1-1.

SOURCE: IC 6-8.1-8-8; (07)SE0559.1.4. -->     SECTION 4. IC 6-8.1-8-8 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 8. (a) After a tax warrant becomes a judgment under section 2 of this chapter or a tax

warrant is returned uncollected to the department under section 3 of this chapter, the department may take any of the following actions without judicial proceedings:
        (1) The department may levy upon the property of the taxpayer that is held by a financial institution by sending a claim to the financial institution. Upon receipt of a claim under this subdivision, the financial institution shall surrender to the department the taxpayer's property. If the taxpayer's property exceeds the amount owed to the state by the taxpayer, the financial institution shall surrender the taxpayer's property in an amount equal to the amount owed. After receiving the department's notice of levy, the financial institution is required to place a sixty (60) day hold on or restriction on the withdrawal of funds the taxpayer has on deposit or subsequently deposits, in an amount not to exceed the amount owed.
        (2) The department may garnish the accrued earnings and wages of a taxpayer by sending a notice to the taxpayer's employer. Upon receipt of a notice under this subdivision, an employer shall garnish the accrued earnings and wages of the taxpayer in an amount equal to the full amount that is subject to garnishment under IC 24-4.5-5. The amount garnished shall be remitted to the department. The employer is entitled to a fee in an amount equal to the fee allowed under IC 24-4.5-5-105(5). However, the fee shall be borne entirely by the taxpayer.
        (3) The department may levy upon and sell property and may:
            (A) take immediate possession of the property and store it in a secure place; or
            (B) leave the property in the custody of the taxpayer;
        until the day of the sale. The department shall provide notice of the sale in one (1) newspaper, as provided in IC 5-3-1-2. If the property is left in the custody of the taxpayer, the department may require the taxpayer to provide a joint and several delivery bond, in an amount and with a surety acceptable to the department. At any time before the sale, any owner or part owner of the property may redeem the property from the judgment by paying the department the amount of the judgment. The proceeds of the sale shall be applied first to the collection expenses and second to the payment of the delinquent taxes and penalties. Any balance remaining shall be paid to the taxpayer.
    (b) A special counsel or collection agency that makes a claim to a financial institution on behalf of the department under subsection (a)(1) or on behalf of a county treasurer under IC 6-1.1-23-10(c)(1)

shall submit the following to the financial institution:
        (1) Proof of employment or contract with the department under section 4 of this chapter or county treasurer under IC 6-1.1-23-1.5.
        (2) Subject to subsection (c), a fee of ten dollars ($10) for each claim.
        (3) A notice of levy issued by the department or county treasurer.
        (4) A form approved by the department or county treasurer containing instructions for remitting funds to the special counsel or collection agency making the claim.
        (5) A stamped, self-addressed envelope for return of the form submitted under subdivision (4).
    (c) A financial institution, special counsel, or collection agency may not assess or pass along a fee under subsection (b)(2) to:
        (1) the department;
        (2) the county treasurer;
        (3) the taxpayer; or
        (4) any other individual or unit of government.

SOURCE: IC 24-4.5-1-102; (07)SE0559.1.5. -->     SECTION 5. IC 24-4.5-1-102, AS AMENDED BY P.L.57-2006, SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 102. Purposes; Rules of Construction_(1) This article shall be liberally construed and applied to promote its underlying purposes and policies.
    (2) The underlying purposes and policies of this article are:
        (a) to simplify, clarify, and modernize the law governing retail installment sales, consumer credit, small loans, and usury;
        (b) to provide rate ceilings to assure an adequate supply of credit to consumers;
        (c) to further consumer understanding of the terms of credit transactions and to foster competition among suppliers of consumer credit so that consumers may obtain credit at reasonable cost;
        (d) to protect consumer buyers, lessees, and borrowers against unfair practices by some suppliers of consumer credit, having due regard for the interests of legitimate and scrupulous creditors;
        (e) to permit and encourage the development of fair and economically sound consumer credit practices;
        (f) to conform the regulation of consumer credit transactions to the policies of the Federal Consumer Credit Protection Act; and
        (g) to make uniform the law including administrative rules among the various jurisdictions.

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    (3) A reference to a requirement imposed by this article includes reference to a related rule of the department adopted pursuant to this article.
    (4) A reference to a federal law in IC 24-4.5 is a reference to the law in effect December 31, 2005. 2006.

SOURCE: IC 24-4.5-1-201; (07)SE0559.1.6. -->     SECTION 6. IC 24-4.5-1-201, AS AMENDED BY P.L.57-2006, SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 201. (1) Except as otherwise provided in this section, this article applies to sales, leases, and loans made in this state and to modifications, including refinancings, consolidations and deferrals, made in this state, of sales, leases, and loans, wherever made. For purposes of this article, the following apply:
        (a) A sale or modification of a sale agreement is made in this state if the buyer's agreement or offer to purchase or to modify is received by the seller or a person acting on behalf of the seller in this state.
        (b) A lease or modification of a lease agreement is made in this state if the lessee's agreement or offer to lease or to modify is received by the lessor or a person acting on behalf of the lessor in this state. and
        (c) A loan or modification of a loan agreement is made in this state if a writing signed by the debtor and evidencing the debt is received by the lender or a person acting on behalf of the lender in this state.
        (d) A sale, lease, or loan transaction occurs in Indiana if a consumer who is a resident of Indiana enters into a consumer sale, lease, or loan transaction with a creditor in another state and the creditor has advertised or solicited sales, leases, or loans in Indiana by any means, including by mail, brochure, telephone, print, radio, television, the Internet, or electronic means. However, during the period beginning July 1, 2007, and ending June 30, 2009, this subdivision does not apply to an affiliate or a subsidiary of a financial corporation issued a certificate of authority to operate as an industrial loan and investment company under IC 28-5 if all of the following apply:
            (i) The industrial loan and investment company notifies the department in writing that an affiliate or a subsidiary of the industrial loan and investment company engages or plans to engage in activity involving Indiana residents at an out of state location. The notification required by this clause must list all states other than Indiana in which

consumer loans may be made and must describe the nature of the proposed transactions.
            (ii) The industrial loan and investment company provides written consent allowing the department to consult with and review information provided by other state regulators, as may be requested by the department, concerning the activities identified in clause (i) of any affiliate or subsidiary engaging in consumer lending to Indiana residents in the states identified under clause (i).
             (iii) The industrial loan and investment company provides written consent allowing the department to inspect or examine all out of state locations in which an affiliate or a subsidiary of the industrial loan and investment company engages in the activities identified under clause (i), for the purpose of investigating the affiliate's or subsidiary's consumer lending practices involving Indiana residents. An inspection or examination performed by the department under this clause is subject to the schedule of fees established by the department under IC 28-11-3-5.
For purposes of subdivisions (a) through (c), an offer is received by a creditor in Indiana if the offer is physically delivered, or otherwise transmitted or communicated, to a person who has actual or apparent authority to act for the creditor in Indiana, regardless of whether approval, acceptance, or ratification by any other agent or representative of the creditor in another state is necessary to give legal consequence to the consumer credit transaction.
    (2) With respect to sales made pursuant to a revolving charge account (IC 24-4.5-2-108), this article applies if the buyer's communication or indications of the buyer's intention to establish the account is received by the seller in this state. If no communication or indication of intention is given by the buyer before the first sale, this article applies if the seller's communication notifying the buyer of the privilege of using the account is mailed or personally delivered in this state.
    (3) With respect to loans made pursuant to a lender credit card or similar arrangement, this article applies if the debtor's communication or indication of the debtor's intention to establish the arrangement with the lender is received by the lender in this state. If no communication or indication of intention is given by the debtor before the first loan, this article applies if the lender's communication notifying the debtor of the privilege of using the arrangement is mailed or personally

delivered in this state.
    (4) (2) IC 24-4.5-5-101 through IC 24-4.5-5-108 apply to actions or other proceedings brought in this state to enforce rights arising from consumer credit sales, consumer leases, or consumer loans, or extortionate extensions of credit, wherever made.
    (5) If a consumer credit sale, consumer lease, or consumer loan, or modification thereof, is made in another state to a person who is a resident of this state when the sale, lease, loan, or modification is made, the following provisions apply as though the transaction occurred in this state:
        (a) a seller, a lessor, a lender, or an assignee of the seller's, lessor's, or assignee's rights, may not collect charges through actions or other proceedings in excess of those permitted by IC 24-4.5-2, IC 24-4.5-3, or IC 24-4.5-7; and
        (b) a seller, a lessor, a lender, or an assignee of the seller's, lessor's, or assignee's rights, may not enforce rights against the buyer, lessee, or debtor, with respect to the provisions of agreements which violate the provisions on limitations on agreements and practices of IC 24-4.5-2, IC 24-4.5-3, or IC 24-4.5-7.
    (6) (3) Except as provided in subsection (4), (2), a sale, lease, loan, or modification thereof, made in another state to a person who was not a resident of this state when the sale, lease, loan, or modification was made is valid and enforceable in this state according to its terms to the extent that it is valid and enforceable under the laws of the state applicable to the transaction.
    (7) (4) For the purposes of this article, the residence of a buyer, lessee, or debtor is the address given by the buyer, lessee, or debtor as the buyer's, lessee's, or debtor's residence in any writing signed or electronic communication made by the buyer, lessee, or debtor in connection with a credit transaction. Until the buyer, lessee, or debtor notifies the creditor of a new or different address, the given address is presumed to be unchanged.
    (7.5) With respect to a consumer credit sale, consumer lease, or consumer loan, or modification thereof, to which this article does not otherwise apply by reason of subsections (1) through (3), if pursuant to a solicitation relating to a consumer credit sale, consumer lease, or consumer loan, a person who is a resident of this state sends a signed writing evidencing the obligation or offer of the person to a creditor in another state and receives the goods or service purchased, the goods leased, or the cash proceeds of the loan in this state:
        (a) a seller, a lessor, a lender or an assignee of the seller's, lessor's,

or lender's rights may not contract for or receive charges in excess of those permitted by IC 24-4.5-2, IC 24-4.5-3, or IC 24-4.5-7;
        (b) the provisions of IC 24-4.5-2-301, IC 24-4.5-3-301, and IC 24-4.5-7-301 shall apply as though the sale, lease, or loan were made in this state; and
        (c) the provisions of IC 24-4.5-6-101 through IC 24-4.5-6-117 shall apply as though the sale, lease, or loan were made in this state.
    (7.6) For the purpose of this section, a solicitation, relating to a consumer credit sale, consumer lease, or consumer loan, includes: (a) with respect to sales and leases, an offer by a catalog, pamphlet, flier, letter, or similar written material to sell or lease goods or to sell services if the terms for the extension of credit are contained therein and regardless of whether or not the instrument of solicitation is sent or delivered at the request of the buyer or lessee; (b) with respect to loans, an offer by pamphlet, flier, letter, or similar written material to make loans if the terms for the extension of credit are contained therein and regardless of whether or not the instrument of solicitation is sent or delivered at the request of the debtor; and (c) with respect to sales, leases, and loans, an offer by telephone to extend credit if initiated by the seller, lessor, or lender.
    (8) (5) Notwithstanding other provisions of this section:
        (a) except as provided in subsection (4), (2), this article does not apply if the buyer, lessee, or debtor is not a resident of this state at the time of a credit transaction and the parties then agree that the law of the buyer's, lessee's, or debtor's residence applies; and
        (b) this article applies if the buyer, lessee, or debtor is a resident of this state at the time of a credit transaction and the parties then agree that the law of this state applies.
    (9) (6) Except as provided in subsection (8), (5), the following agreements by a buyer, lessee, or debtor are invalid with respect to consumer credit sales, consumer leases, consumer loans, or modifications thereof, to which this article applies:
        (a) that the law of another state shall apply;
        (b) that the buyer, lessee, or debtor consents to the jurisdiction of another state; and
        (c) that fixes venue.
    (10) (7) The following provisions of this article specify the applicable law governing certain cases:
        (a) applicability (IC 24-4.5-6-102) of the provisions on powers and functions of the department; and
        (b) applicability (IC 24-4.5-6-201) of the provisions on

notification and fees.
     (8) If a creditor has violated the provisions of this article that apply to the authority to make consumer loans (IC 24-4.5-3-502), the loan is void and the debtor is not obligated to pay either the principal or loan finance charge, as set forth in IC 24-4.5-5-202.

SOURCE: IC 24-4.5-2-202; (07)SE0559.1.7. -->     SECTION 7. IC 24-4.5-2-202 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 202. (1) In addition to the credit service charge permitted by IC 24-4.5-2-201 through IC 24-4.5-2-210, a seller may contract for and receive any of the following additional charges in connection with a consumer credit sale:
        (a) Official fees and taxes.
        (b) Charges for insurance as described in subsection (2).
        (c) Notwithstanding provisions of the Federal Consumer Credit Protection Act concerning disclosure, charges for other benefits, including insurance, conferred on the buyer, if the benefits are of value to him the buyer and if the charges are reasonable in relation to the benefits, are of a type which is not for credit and are excluded as permissible additional charges from the credit service charge. With respect to any additional charge not specifically provided for in this section, to be a permitted charge under this subsection the seller must submit a written explanation of the charge to the department indicating how the charge would be assessed and the value or benefit to the buyer. Supporting documents may be required by the department. The department shall determine whether the charge would be of benefit to the buyer and is reasonable in relation to the benefits.
        (d) A charge not to exceed twenty twenty-five dollars ($20) ($25) for each return by a bank or other depository institution of a dishonored check, negotiable order of withdrawal, or share draft issued by the debtor.
        (e) Annual or periodic participation fees assessed in connection with a revolving charge account. Annual participation fees must:
            (i) be reasonable in amount;
            (ii) bear a reasonable relationship to the seller's costs to maintain and monitor the charge account; and
            (iii) not be assessed for the purpose of circumvention or evasion of this article, as determined by the department.
    (2) An additional charge may be made for insurance written in connection with the sale, other than insurance protecting the seller against the buyer's default or other credit loss:
        (a) with respect to insurance against loss of or damage to

property, or against liability, if the seller furnishes a clear and specific statement in writing to the buyer, setting forth the cost of the insurance if obtained from or through the seller and stating that the buyer may choose the person, subject to the seller's reasonable approval, through whom the insurance is to be obtained; and
        (b) with respect to consumer credit insurance providing life, accident, unemployment or other loss of income, or health coverage, if the insurance coverage is not a factor in the approval by the seller of the extension of credit and is clearly disclosed in writing to the buyer, and if, in order to obtain the insurance in connection with the extension of credit, the buyer gives specific, affirmative, written indication of the desire to do so after written disclosure of the cost.
    (3) With respect to a debt secured by an interest in land, the following closing costs, if the costs are bona fide, reasonable in amount, and not for the purpose of circumvention or evasion of this article:
        (a) fees for title examination, abstract of title, title insurance, property surveys, or similar purposes;
        (b) fees for preparing deeds, mortgages, and reconveyance, settlement, and similar documents;
        (c) notary and credit report fees;
        (d) amounts required to be paid into escrow or trustee accounts if the amounts would not otherwise be included in the loan finance charge; and
        (e) appraisal fees.

SOURCE: IC 24-4.5-3-202; (07)SE0559.1.8. -->     SECTION 8. IC 24-4.5-3-202 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 202. (1) In addition to the loan finance charge permitted by IC 24-4.5-3-201 through IC 24-4.5-3-210, a lender may contract for and receive the following additional charges in connection with a consumer loan:
        (a) Official fees and taxes.
        (b) Charges for insurance as described in subsection (2).
        (c) Annual or periodic participation fees assessed in connection with a revolving loan account. Annual participation fees must:
            (i) be reasonable in amount;
            (ii) bear a reasonable relationship to the lender's costs to maintain and monitor the loan account; and
            (iii) not be assessed for the purpose of circumvention or evasion of this article, as determined by the department.
        (d) With respect to a debt secured by an interest in land, the

following closing costs, if they are bona fide, reasonable in amount, and not for the purpose of circumvention or evasion of this article:
            (i) Fees for title examination, abstract of title, title insurance, property surveys, or similar purposes.
            (ii) Fees for preparing deeds, mortgages, and reconveyance, settlement, and similar documents.
            (iii) Notary and credit report fees.
            (iv) Amounts required to be paid into escrow or trustee accounts if the amounts would not otherwise be included in the loan finance charge.
            (v) Appraisal fees.
        (e) Notwithstanding provisions of the Federal Consumer Credit Protection Act concerning disclosure, charges for other benefits, including insurance, conferred on the debtor, if the benefits are of value to the debtor and if the charges are reasonable in relation to the benefits, are of a type which is not for credit and are excluded as permissible additional charges from the loan finance charge. With respect to any other additional charge not specifically provided for in this section to be a permitted charge under this subsection, the creditor must submit a written explanation of the charge to the department indicating how the charge would be assessed and the value or benefit to the debtor. Supporting documents may be required by the department. The department shall determine whether the charge would be of benefit to the debtor and is reasonable in relation to the benefits.
        (f) A charge not to exceed twenty twenty-five dollars ($20) ($25) for each return by a bank or other depository institution of a dishonored check, negotiable order of withdrawal, or share draft issued by the debtor.
        (g) With respect to a revolving loan account, a fee not to exceed twenty twenty-five dollars ($20) ($25) in each billing cycle during which the balance due under the revolving loan account exceeds by more than one hundred dollars ($100) the maximum credit limit for the account established by the lender.
        (h) With respect to a revolving loan account, a transaction fee that may not exceed the lesser of the following:
            (i) Two percent (2%) of the amount of the transaction.
            (ii) Ten dollars ($10).
The additional charges provided for in paragraphs subdivisions (f), (g), and (h) are not subject to refund or rebate.
    (2) An additional charge may be made for insurance in connection

with the loan, other than insurance protecting the lender against the debtor's default or other credit loss:
        (a) with respect to insurance against loss of or damage to property or against liability, if the lender furnishes a clear and specific statement in writing to the debtor, setting forth the cost of the insurance if obtained from or through the lender and stating that the debtor may choose the person, subject to the lender's reasonable approval, through whom the insurance is to be obtained; and
        (b) with respect to consumer credit insurance providing life, accident, unemployment or other loss of income, or health coverage, if the insurance coverage is not a factor in the approval by the lender of the extension of credit and this fact is clearly disclosed in writing to the debtor, and if, in order to obtain the insurance in connection with the extension of credit, the debtor gives specific affirmative written indication of the desire to do so after written disclosure of the cost of the insurance.

SOURCE: IC 24-4.5-3-402; (07)SE0559.1.9. -->     SECTION 9. IC 24-4.5-3-402 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 402. (1) Except as provided in IC 24-9-4-3 with respect to a high cost home loan (as defined in IC 24-9-2-8), with respect to a consumer loan, other than one pursuant to a revolving loan account or one on which only loan finance charges are payable prior to the time that the final scheduled payment is due, if any scheduled payment is more than twice as large as the average of earlier scheduled payments, the debtor has the right to refinance the amount of that payment at the time it is due without penalty. The terms of the refinancing shall be no less favorable to the debtor than the terms of the original loan. This section does not apply to the extent that the payment schedule is adjusted to the seasonal or irregular income of the debtor.
    (2) For the purposes of this section, .terms of the refinancing. means:
        (a) in the case of a fixed-rate consumer loan, the individual payment amounts, the charges as a result of default by the debtor, and the rate of the loan finance charge; and
        (b) in the case of a variable rate consumer loan, the method used to determine the individual payment amounts, the charges as a result of default by the debtor, the method used to determine the rate of the loan finance charge, the circumstances under which the rate of the loan finance charge may increase, and any limitations on the increase in the rate of the loan finance charge.
     (3) If a consumer loan is made under the authority of the

Alternative Mortgage Transaction Parity Act (12 U.S.C. 3802 et seq.), the note evidencing the mortgage must contain a reference to the applicable federal law.

SOURCE: IC 24-4.5-3-503; (07)SE0559.1.10. -->     SECTION 10. IC 24-4.5-3-503, AS AMENDED BY P.L.57-2006, SECTION 7, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 503. License to Make Consumer Loans_(1) The department shall receive and act on all applications for licenses to make consumer loans. Applications must be as prescribed by the director of the department of financial institutions.
    (2) A license shall not be issued unless the department finds that the financial responsibility, character, and fitness of the applicant and of the members of the applicant (if the applicant is a copartnership or an association) and of the officers and directors of the applicant (if the applicant is a corporation) are such as to warrant belief that the business will be operated honestly and fairly within the purposes of this article. The director is entitled to request evidence of compliance with this section at:
        (a) the time of application;
        (b) the time of renewal of a license; or
        (c) any other time considered necessary by the director.
    (3) Evidence of compliance with this section may include:
        (a) criminal background checks, including a national criminal history check by the Federal Bureau of Investigation;
        (b) credit histories; and
        (c) other background checks considered necessary by the director.
    (4) The department may deny an application under this section if the director of the department determines that the application was submitted for the benefit of, or on behalf of, a person who does not qualify for a license.
    (5) Upon written request, the applicant is entitled to a hearing on the question of the qualifications of the applicant for a license as provided in IC 4-21.5.
    (6) The applicant shall pay the following fees at the time designated by the department:
        (a) An initial license fee as established by the department under IC 28-11-3-5.
        (b) An initial investigation fee as established by the department under IC 28-11-3-5.
        (c) An annual renewal fee as established by the department under IC 28-11-3-5.
    (d) (7) A fee as established by the department under IC 28-11-3-5 may be charged for each day the annual renewal fee under subsection

(6)(c) is delinquent.
    (7) (8) The applicant may deduct the fees required under subsection (6)(a) through (6)(c) from the filing fees paid under IC 24-4.5-6-203.
    (8) (9) A loan license issued under this section is not assignable or transferable.
     (10) Subject to subsection (11), the director may designate an automated central licensing system and repository, operated by a third party, to serve as the sole entity responsible for:
        (a) processing applications and renewals for licenses under this section; and
        (b) performing other services that the director determines are necessary for the orderly administration of the department's licensing system.
     (11) The director's authority to designate an automated central licensing system and repository under subsection (10) is subject to the following:
        (a) The director or the director's designee may not require any person exempt from licensure under this article, or any employee or agent of an exempt person, to:
            (i) submit information to; or
            (ii) participate in;
        the automated central licensing system and repository.
        (b) Information stored in the automated central licensing system and repository is subject to the confidentiality provisions of IC 28-1-2-30 and IC 5-14-3. A person may not:
            (i) obtain information from the automated central licensing system and repository, unless the person is authorized to do so by statute; or
            (ii) initiate any civil action based on information obtained from the automated central licensing system if the information is not otherwise available to the person under any other state law; or
            (iii) initiate any civil action based on information obtained from the automated central licensing system if the person could not have initiated the action based on information otherwise available to the person under any other state law.
        (c) Documents, materials, and other forms of information in the control or possession of the automated central licensing system and repository that are furnished by the director, the director's designee, or a licensee, or that are otherwise obtained by the automated central licensing system and

repository, are confidential and privileged by law and are not:
            (i) subject to inspection under IC 5-14-3;
            (ii) subject to subpoena;
            (iii) subject to discovery; or
            (iv) admissible in evidence in any civil action.
        However, the director or the director's designee may use the documents, materials, or other information available to the director or the director's designee in furtherance of any action brought in connection with the director's duties under this article.
        (d) Disclosure of documents, materials, and information:
            (i) to the director or the director's designee; or
            (ii) by the director or the director's designee;
        under this subsection does not result in a waiver of any applicable privilege or claim of confidentiality with respect to the documents, materials, or information.
        (e) Information provided to the automated central licensing system and repository is subject to IC 4-1-11.
        (f) This subsection does not limit or impair a person's right to:
            (i) obtain information;
            (ii) use information as evidence in a civil action or proceeding; or
            (iii) use information to initiate a civil action or proceeding;
        if the information may be obtained from the director or the director's designee under any law.
        (g) The director may require a licensee required to submit information to the automated central licensing system and repository to pay a processing fee considered reasonable by the director.

SOURCE: IC 24-4.5-3-504; (07)SE0559.1.11. -->     SECTION 11. IC 24-4.5-3-504 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 504. Revocation or Suspension of License_(1) The department may issue to a person licensed to make consumer loans an order to show cause why the license should not be revoked or suspended for a period determined by the department. The order shall state the place and time for a hearing and set a time for the hearing meeting with the department that is no less than ten (10) days from the date of the order. After the hearing, meeting, the department shall revoke or suspend the license if the department finds that:
        (a) the licensee has repeatedly and willfully violated this article or any rule or order lawfully made pursuant to this article; or
        (b) facts or conditions exist which would clearly have justified the

department in refusing to grant a license had these facts or conditions been known to exist at the time the application for the license was made.
    (2) Except as provided in section 503.5 of this chapter, no revocation or suspension of a license is lawful unless prior to institution of proceedings by the department notice is given to the licensee of the facts or conduct which warrant the intended action, and the licensee is given an opportunity to show compliance with all lawful requirements for retention of the license.
    (3) If the department finds that probable cause for revocation of a license exists and that enforcement of this article requires immediate suspension of the license pending investigation, the department may, after a hearing meeting with the licensee upon five (5) days written notice to the licensee, enter an order suspending the license for not more than thirty (30) days.
    (4) Whenever the department revokes or suspends a license, the department shall enter an order to that effect and forthwith notify the licensee of the revocation or suspension. Within five (5) days after the entry of the order the department shall deliver to the licensee a copy of the order and the findings supporting the order.
    (5) Any person holding a license to make consumer loans may relinquish the license by notifying the department in writing of its relinquishment, but this relinquishment shall not affect the person's liability for acts previously committed.
    (6) No revocation, suspension, or relinquishment of a license shall impair or affect the obligation of any preexisting lawful contract between the licensee and any debtor.
    (7) The department may reinstate a license, terminate a suspension, or grant a new license to a person whose license has been revoked or suspended if no fact or condition then exists which clearly would have justified the department in refusing to grant a license.
    (8) If the director:
        (a) has just cause to believe an emergency exists from which it is necessary to protect the interests of the public; or
        (b) determines that the license was obtained for the benefit of, or on behalf of, a person who does not qualify for a license;
the director may proceed with the revocation of the license under IC 4-21.5-3-6.

SOURCE: IC 24-4.5-3-505; (07)SE0559.1.12. -->     SECTION 12. IC 24-4.5-3-505 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 505. Records; Annual Reports_(1) Every licensee shall maintain records in conformity with generally accepted accounting principles and practices in a manner that

will enable the department to determine whether the licensee is complying with the provisions of this article. The record keeping system of a licensee shall be sufficient if the licensee makes the required information reasonably available. The department shall determine the sufficiency of the records and whether the licensee has made the required information reasonably available. The department shall be given free access to the records wherever located. The records pertaining to any loan shall be retained for two (2) years after making the final entry relating to the loan, but in the case of a revolving loan account the two (2) years is measured from the date of each entry.
    (2) Every licensee shall file with the department a composite report as required by the department, but not more frequently than annually, in the form prescribed by the department relating to all consumer loans made by the licensee. The department shall consult with comparable officials in other states for the purpose of making the kinds of information required in the reports uniform among the states. Information contained in the reports shall be confidential and may be published only in composite form. The department may impose a fee of five dollars ($5) in an amount fixed by the department under IC 28-11-3-5 for each day that a licensee fails to file the report required by this subsection.
    (3) Every licensee shall file notification with the department if the licensee:
        (a) has a change in name, address, or principals;
        (b) opens a new branch, closes an existing branch, or relocates an existing branch;
        (c) files for bankruptcy or reorganization; or
        (d) is subject to revocation or suspension proceedings by a state or governmental authority with regard to the licensee's activities;
not later than thirty (30) days after the date of the event described in this subsection.
    (4) Every licensee shall file notification with the department if a key officer or director of the licensee:
        (a) is under indictment for a felony indictment related to the licensee's activities; involving fraud, deceit, or misrepresentation under the laws of Indiana or any other jurisdiction; or
        (b) has been convicted of or pleaded guilty or nolo contendere to a felony related to the licensee's activities; involving fraud, deceit, or misrepresentation under the laws of Indiana or any other jurisdiction;
not later than thirty (30) days after the date of the event described in

this subsection.

SOURCE: IC 24-4.5-4-108; (07)SE0559.1.13. -->     SECTION 13. IC 24-4.5-4-108 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 108. Refund or Credit Required; Amount _ (1) Upon prepayment in full of a consumer credit sale or consumer loan by the proceeds of consumer credit insurance, the debtor or the debtor's estate is entitled to a refund of:
        (a) any portion of a separate charge for insurance which by reason of prepayment is retained by the creditor or returned to the creditor by the insurer unless the charge was computed from time to time on the basis of the balances of the debtor's account; and
        (b) any portion of an additional charge that is:
            (i) assessed in accordance with IC 24-4.5-2-202 or IC 24-4.5-3-202; and
            (ii) subject to rebate upon prepayment.
    (2) This chapter does not require a creditor to grant a refund or credit to the debtor if all refunds and credits due to the debtor under this chapter amount to less than one dollar ($1), and except as provided in subsection (1) does not require the creditor to account to the debtor for any portion of a separate charge for insurance because:
        (a) the insurance is terminated by performance of the insurer's obligation;
        (b) the creditor pays or accounts for premiums to the insurer in amounts and at times determined by the agreement between them; or
        (c) the creditor receives directly or indirectly under any policy of insurance a gain or advantage not prohibited by law.
    (3) Except as provided in subsection (2), the creditor or the creditor's assignee shall promptly make an appropriate refund or credit to the debtor for any separate charge made for insurance if:
        (a) the insurance is not provided or is provided for a term shorter than the term for which the charge to the debtor for insurance was computed; or
        (b) the insurance terminates prior to the end of the scheduled term of the insurance because of prepayment in full or otherwise.
    (4) A refund or credit required by subsection (3) is appropriate as to amount if it is computed according to a method prescribed or approved by the insurance commissioner or a formula filed by the insurer with the insurance commissioner at least thirty (30) days before the debtor's right to a refund or credit becomes determinable, unless the method or formula is used after the insurance commissioner notifies the insurer that it is disapproved.
    (5) If a refund or credit required by subsection (3) (1) is not made

to the debtor within sixty (60) days after the date the insurance debt is terminated, due to prepayment in full or otherwise, the creditor shall pay to the debtor for each day after the sixty (60) day period has expired an amount equal to the daily interest at the contracted annual percentage rate on the amount of the credit insurance premium refund required by subsection (1) due at the time of prepayment or termination. The director may impose an additional civil penalty of not greater than one thousand dollars ($1,000) per occurrence if a creditor engages in a pattern or practice of failing to comply with the subsection.

SOURCE: IC 24-4.5-6-104; (07)SE0559.1.14. -->     SECTION 14. IC 24-4.5-6-104 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 104. (1) In addition to other powers granted by this article, the department within the limitations provided by law may:
        (a) receive and act on complaints, take action designed to obtain voluntary compliance with this article, or commence proceedings on the department's own initiative;
        (b) counsel persons and groups on their rights and duties under this article;
        (c) establish programs for the education of consumers with respect to credit practices and problems;
        (d) make studies appropriate to effectuate the purposes and policies of this article and make the results available to the public;
        (e) adopt, amend, and repeal substantive rules when specifically authorized by this article, and adopt, amend, and repeal procedural rules, orders, policies, and forms to carry out the provisions of this article;
        (f) maintain more than one (1) office within Indiana; and
        (g) appoint any necessary attorneys, hearing examiners, clerks, and other employees and agents and fix their compensation, and authorize attorneys appointed under this section to appear for and represent the department in court.
    (2) No liability is imposed under this article for an act done or omitted in conformity with a rule, written notice, written opinion, written interpretation, or written directive of the department notwithstanding that after the act or omission the rule, written notice, written opinion, written interpretation, or written directive may be amended or repealed, or be determined by judicial or other authority to be invalid for any reason.

SOURCE: IC 24-4.5-6-106; (07)SE0559.1.15. -->     SECTION 15. IC 24-4.5-6-106, AS AMENDED BY P.L.57-2006, SECTION 9, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 106. Examinations_(1) In administering this

article and in order to determine whether the provisions of this article are being complied with by persons engaging in acts subject to this article, the department may examine the books and records of persons and may make investigations of persons as may be necessary to determine compliance. Records subject to examination under this section include the following:
        (a) Training, operating, and policy manuals.
        (b) Minutes of:
            (i) management meetings; and
            (ii) other meetings.
        (c) Other records that the department determines are necessary to perform its investigation or examination.
The department may also administer oaths or affirmations, subpoena witnesses, compel their attendance, adduce evidence, and require the production of any matter which is relevant to the investigation. The department shall determine the sufficiency of the records maintained and whether the person has made the required information reasonably available. The records pertaining to any transaction subject to this article shall be retained for two (2) years after making the final entry relating to the consumer credit transaction, but in the case of a revolving loan account or revolving charge account, the two (2) years is measured from the date of each entry.
    (2) If the department:
        (a) investigates; or
        (b) examines the books and records of;
a person that is subject to IC 24-4.5-6-201, IC 24-4.5-6-202, and IC 24-4.5-6-203, the person shall pay all reasonably incurred costs of the investigation or examination in accordance with the fee schedule adopted by the department under IC 28-11-3-5. However, the person is liable for the costs of an investigation or examination under this subsection only to the extent that the costs exceed the amount of the filing fees paid most recently under IC 24-4.5-6-203. Any costs required to be paid under this subsection shall be paid not later than sixty (60) days after the person receives a notice from the department of the costs being assessed. The department may impose a fee, in an amount fixed by the department under IC 28-11-3-5, for each day that the assessed costs are not paid, beginning on the first day after the sixty (60) day period described in this subsection.
    (3) The department shall be given free access to the records wherever located. If the person's records are located outside Indiana, the records shall be made available to the department at a convenient

location within Indiana, or the person shall pay the reasonable and necessary expenses for the department or its representative to examine them where they are maintained. The department may designate comparable officials of the state in which the records are located to inspect them on behalf of the department.
    (4) Upon failure without lawful excuse to obey a subpoena or to give testimony and upon reasonable notice to all persons affected thereby, the department may apply to (any civil) court for an order compelling compliance.
    (5) The department shall not make public the name or identity of a person whose acts or conduct the department investigates pursuant to this section or the facts disclosed in the investigation, but this subsection does not apply to disclosures in actions or enforcement proceedings pursuant to this article.

SOURCE: IC 24-4.5-6-113; (07)SE0559.1.16. -->     SECTION 16. IC 24-4.5-6-113 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 113. Civil Actions by Department_(1) After demand, the department may bring a civil action against a creditor for making or collecting charges in excess of those permitted by this article. An action may relate to transactions with more than one debtor. If it is found that an excess charge has been made, the court shall order the respondent to refund to the debtor or debtors the amount of the excess charge. If a creditor has made an excess charge in deliberate violation of or in reckless disregard for this article, or if a creditor has refused to refund an excess charge within a reasonable time after demand by the debtor or the department, the court may also order the respondent to pay to the debtor or debtors a civil penalty in an amount determined by the court not in excess of the greater of either the amount of the credit service or loan finance charge or ten (10) times the amount of the charge. Refunds and penalties to which the debtor is entitled pursuant to this subsection may be set off against the debtor's obligation. If a debtor brings an action against a creditor to recover an excess charge or civil penalty, an action by the department to recover for the same excess charge or civil penalty shall be stayed while the debtor's action is pending and shall be dismissed if the debtor's action is dismissed with prejudice or results in a final judgment granting or denying the debtor's claim. With respect to excess charges arising from sales made pursuant to revolving charge accounts or from loans made pursuant to revolving loan accounts, no action pursuant to this subsection may be brought more than two (2) years after the time the excess charge was made. With respect to excess charges arising from other consumer credit sales or consumer loans, no action pursuant to this subsection may be brought more than one (1)

year after the due date of the last scheduled payment of the agreement pursuant to which the charge was made. If the creditor establishes by a preponderance of evidence that a violation is unintentional or the result of a bona fide error, no liability to pay a penalty shall be imposed under this subsection.
    (2) The department may bring a civil action against a creditor or a person acting in his behalf to recover a civil penalty for willfully violating this article, and if the court finds that the defendant has engaged in a course of repeated and willful violations of this article, it may assess a civil penalty of no more than five thousand dollars ($5,000). No civil penalty pursuant to this subsection may be imposed for violations of this article occurring more than two (2) years before the action is brought or for making unconscionable agreements or engaging in a course of fraudulent or unconscionable conduct.
     (3) If the department determines, after notice and opportunity for hearing, that a person has violated this article, the department may, in addition to or instead of all other remedies available under this section, impose upon the person a civil penalty not greater than ten thousand dollars ($10,000) per violation.

SOURCE: IC 24-4.5-6-201; (07)SE0559.1.17. -->     SECTION 17. IC 24-4.5-6-201, AS AMENDED BY P.L.57-2006, SECTION 10, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 201. (1) This section, IC 24-4.5-6-202, and IC 24-4.5-6-203 apply to a person, including a supervised financial organization, but not including a collection agency licensed under IC 25-11-1, engaged in Indiana in any of the following:
        (a) Making consumer credit sales, consumer leases, or consumer loans.
        (b) Taking assignments of rights against debtors that arise from sales, leases, or loans by a person having an office or a place of business in Indiana.
        (c) Undertaking direct collection of payments from the debtors or enforcement of rights against the debtors.
        (d) Placing consumer credit insurance, receiving commissions for consumer credit insurance, or acting as a limited line credit insurance producer in the sale of consumer credit insurance.
        (e) Selling insurance or other benefits, the charges for which are approved by the department as additional charges under IC 24-4.5-2-202 or IC 24-4.5-3-202.
    (2) This section, IC 24-4.5-6-202, and IC 24-4.5-6-203 are not applicable to a seller whose credit sales consist entirely of sales made pursuant to a seller credit card issued by a person other than the seller if the issuer of the card has complied with the provisions of this

section, IC 24-4.5-6-202, and IC 24-4.5-6-203.
    (3) This section, IC 24-4.5-6-202, and IC 24-4.5-6-203 apply to a seller whose credit sales are made using credit cards that:
        (a) are issued by a lender;
        (b) are in the name of the seller; and
        (c) can be used by the buyer or lessee only for purchases or leases at locations of the named seller.

SOURCE: IC 24-4.5-6-202; (07)SE0559.1.18. -->     SECTION 18. IC 24-4.5-6-202 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 202. (1) Persons, other than applicants for a license under IC 24-4.5-3-502(3), that are subject to IC 24-4.5-6-201, this section, and IC 24-4.5-6-203 shall file notification with the department within thirty (30) days after commencing business in this state, Indiana and thereafter on or before January 31 of each year an annual basis, on the date set forth in subsection (2). The notification shall state the:
        (a) name of the person;
        (b) name in which business is transacted if different from subdivision (a);
        (c) address of principal office, which may be outside this state; Indiana; and
        (d) address of all offices or retail stores, if any, in this state Indiana at which consumer credit sales, consumer leases, or consumer loans are made, or in the case of a person taking assignments of obligations, the offices or places of business within this state Indiana at which business is transacted.
    (2) If information in a notification becomes inaccurate after filing, no further notification is required until the following
    (2) A person required to be licensed under this article shall file the notification required by subsection (1) not later than December 31 of each year. All other persons subject to this section shall file the notification required by subsection (1) not later than January 31 of each year.
    (3) Persons subject to IC 24-4.5-6-201, IC 24-4.5-6-203, and this section shall notify the department not later than thirty (30) days after the person:
        (a) has a change in name, address, or principals;
        (b) opens a new branch, closes an existing branch, or relocates an existing branch;
        (c) files for bankruptcy or reorganization;
        (d) is notified that the person is subject to revocation or suspension proceedings by a state or governmental authority with regard to the person's activities;

---

        (e) is under indictment for a felony indictment related to the person's activities; involving fraud, deceit, or misrepresentation under the laws of Indiana or any other jurisdiction; or
        (f) has been convicted of or pleaded guilty or nolo contendere to a felony related to the person's activities. involving fraud, deceit, or misrepresentation under the laws of Indiana or any other jurisdiction.

SOURCE: IC 24-4.5-6-203; (07)SE0559.1.19. -->     SECTION 19. IC 24-4.5-6-203 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 203. (1) Persons required to file notification who are sellers, lessors, or lenders shall pay a fee in an amount and at intervals to be prescribed by the department. director under IC 28-11-3-5. The fee shall be a uniform amount for each one hundred thousand dollars ($100,000), or part thereof, in excess of one hundred thousand dollars ($100,000), of the original unpaid balances arising from consumer credit sales, consumer leases, and consumer loans made in this state within the preceding calendar year Indiana and held either by the seller, lessor, or lender for more than thirty (30) days after the inception of the sale, lease, or loan giving rise to the obligations, or by an assignee who has not filed notification. A refinancing of a sale, lease, or loan resulting in an increase in the amount of an obligation is a new sale, lease, or loan to the extent of the increase. In prescribing the fee, the department shall consider the costs and expense incurred or estimated to be incurred by the department in the administration of this article, including, but not limited to, the supervision, regulation, and examination of persons subject to the provisions of the article.
    (2) Persons required to file notification who are assignees shall pay a fee as prescribed and fixed by the department under subsection (1) on the unpaid balances at the time of the assignment of obligations arising from consumer credit sales, consumer leases, and consumer loans made in this state Indiana taken by assignment during the preceding calendar year, but an assignee need not pay a fee with respect to an obligation on which the assignor or other person has already paid a fee.
    (3) Persons required to file notification who are assignors shall pay a fee as prescribed by the department under subsection (1) on the unpaid balances at the time of the assignment of obligations arising from consumer credit sales, consumer leases, and consumer loans made in Indiana during the preceding calendar year unless the assignee has already paid the fees.
    (4) Persons required to renew a license by under IC 24-4.5-3-503 may deduct the fees paid under IC 24-4.5-3-503(4)(a)

IC 24-4.5-3-503(6)(a) through IC 24-4.5-3-503(4)(c) IC 24-4.5-3-503(6)(c) from fees paid under this section.
    (5) A person that is required to file notification under IC 24-4.5-6-202 shall pay a fee at the same rate as prescribed and fixed by the department under subsection (1) on the original unpaid balances of all closed end credit obligations originating from the person's place of business during the calendar year time preceding the notification as specified under subsection (1), unless the fees for the obligations have been paid by another person.

SOURCE: IC 24-4.5-6-204; (07)SE0559.1.20. -->     SECTION 20. IC 24-4.5-6-204 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 204. IC 24-4.5-3-502, IC 24-4.5-6-201, IC 24-4.5-6-202, and IC 24-4.5-6-203 are not applicable to payment for services performed by attorneys.

SOURCE: IC 24-4.5-7-102; (07)SE0559.1.21. -->     SECTION 21. IC 24-4.5-7-102, AS AMENDED BY P.L.57-2006, SECTION 11, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 102. (1) Except as otherwise provided, all provisions of this article applying to consumer loans apply to small loans, as defined in this chapter.
    (2) This chapter applies to:
        (a) a lender or to any person who facilitates, enables, or acts as a conduit for any person who is or may be exempt from licensing under IC 24-4.5-3-502;
        (b) a bank, savings association, credit union, or other state or federally regulated financial institution except those that are specifically exempt regarding limitations on interest rates and fees; or
        (c) a person, if the department determines that a transaction is:
            (i) in substance a disguised loan; or
            (ii) the application of subterfuge for the purpose of avoiding this chapter.
     (3) A loan that:
        (a) does not qualify as a small loan under IC 24-4.5-7-104;
        (b) is for a term shorter than that specified in IC 24-4.5-7-401(1); or
        (c) is made in violation of IC 24-4.5-7-402;
is subject to this article. The department may conform the finance charge for a loan described in this subsection to the limitations set forth in IC 24-4.5-3-508.

SOURCE: IC 24-4.5-7-104. -->     SECTION 22. IC 24-4.5-7-104 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 104. (1) .Small loan. means a loan:
        (a) with a principal loan amount that is at least fifty dollars ($50)

and not more than five hundred fifty dollars ($500); ($550); and
        (b) in which the lender holds the borrower's check or receives the borrower's written authorization to debit the borrower's account under an agreement, either express or implied, for a specific period before the lender:
            (i) offers the check for deposit or presentment; or
            (ii) exercises the authorization to debit the borrower's account.
     (2) The amount of five hundred fifty dollars ($550) in subsection (1)(a) is subject to change under the provisions on adjustment of dollar amounts (IC 24-4.5-1-106). However, notwithstanding IC 24-4.5-1-106(1), the Reference Base Index to be used under this subsection is the Index for October 2006.

SOURCE: IC 24-4.5-7-201; (07)SE0559.1.23. -->     SECTION 23. IC 24-4.5-7-201, AS AMENDED BY P.L.141-2005, SECTION 3, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 201. (1) Finance charges on the first two hundred fifty dollars ($250) of a small loan are limited to fifteen percent (15%) of the principal.
    (2) Finance charges on the amount of a small loan greater than two hundred fifty dollars ($250) and less than or equal to four hundred dollars ($400) are limited to thirteen percent (13%) of the amount over two hundred fifty dollars ($250) and less than or equal to four hundred dollars ($400).
    (3) Finance charges on the amount of the small loan greater than four hundred dollars ($400) and less than or equal to five hundred fifty dollars ($500) ($550) are limited to ten percent (10%) of the amount over four hundred dollars ($400) and less than or equal to five hundred fifty dollars ($500). ($550).
     (4) The amount of five hundred fifty dollars ($550) in subsection (3) is subject to change under the provisions on adjustment of dollar amounts (IC 24-4.5-1-106). However, notwithstanding IC 24-4.5-1-106(1), the Reference Base Index to be used under this subsection is the Index for October 2006.

SOURCE: IC 24-4.5-7-202; (07)SE0559.1.24. -->     SECTION 24. IC 24-4.5-7-202 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 202. (1) Notwithstanding any other law, the only fee that may be contracted for and received by the lender on a small loan is a charge, not to exceed twenty twenty-five dollars ($20), ($25), for each:
        (a) return by a bank or other depository institution of a:
            (i) dishonored check;
            (ii) negotiable order of withdrawal; or
            (iii) share draft issued by the borrower; or
        (b) time an authorization to debit the borrower's account is

dishonored.
This additional charge may be assessed one (1) time regardless of how many times a check or an authorization to debit the borrower's account may be submitted by the lender and dishonored.
     (2) A lender may:
        (a) present a borrower's check for payment; or
        (b) exercise a borrower's authorization to debit the borrower's account;
not more than three (3) times.

SOURCE: IC 24-4.5-7-401; (07)SE0559.1.25. -->     SECTION 25. IC 24-4.5-7-401, AS AMENDED BY P.L.57-2006, SECTION 16, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 401. (1) A small loan may not be made for a term of less than fourteen (14) days.
    (2) After the borrower's fifth If five (5) consecutive small loan, loans have been made to a borrower after the borrower's initial small loan, another small loan may not be made to that borrower within seven (7) days after the fifth consecutive small loan is paid in full. After the borrower's fifth consecutive small loan, the balance must be paid in full. However, the borrower and lender may agree to enter into a simple interest loan, payable in installments, under IC 24-4.5-3 within seven (7) days after the due date of the fifth consecutive small loan.
     (3) Subject to subsection (4), whenever a borrower has entered into an initial small loan followed by three (3) consecutive small loans, the lender shall offer the borrower the option to repay:
        (a) the third consecutive small loan; and
        (b) subject to subsection (2), any small loan entered into after the third consecutive small loan;
under an extended payment plan. At the time of execution of a small loan described in subdivision (a) or (b), the lender shall disclose to the borrower the extended payment plan option by providing the borrower a written description of the extended payment plan option in a separate disclosure document approved by the director.
    (4) A lender shall offer an extended payment plan under subsection (3) under the following terms and conditions:
        (a) A borrower shall be permitted to request an extended payment plan at any time during the term of a third or subsequent consecutive small loan if the borrower has not defaulted on the outstanding small loan.
        (b) An extended payment plan must allow the outstanding small loan to be paid in at least four (4) equal installments

over a period of not less than sixty (60) days.
        (c) The lender may not assess any fee or charge on a borrower for entering into an extended payment plan.
        (d) An agreement for an extended payment plan must be in writing and acknowledged by both the borrower and the lender.
        (e) A borrower may not enter into another small loan transaction while engaged in an extended payment plan.
    (5) An agreement for an extended payment plan under subsection (3):
        (a) shall be considered an extension of the outstanding small loan; and
        (b) may not be considered a new loan.

SOURCE: IC 24-4.5-7-402; (07)SE0559.1.26. -->     SECTION 26. IC 24-4.5-7-402 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 402. (1) A lender is prohibited from making a small loan to a borrower if the total of:
        (a) the payable principal amount and finance charges of the small loan to be issued; plus
        (b) any other small loan balances that the borrower has outstanding with any lender;
exceeds fifteen twenty percent (15%) (20%) of the borrower's monthly gross income.
    (2) A small loan may be secured by only one (1) check or authorization to debit the borrower's account per small loan. The check or electronic debit may not exceed the amount advanced to or on behalf of the borrower plus loan finance charges contracted for and permitted.
    (3) A borrower may make partial payments in any amount on the small loan without charge at any time before the due date of the small loan. After each payment is made on a small loan, whether the payment is in part or in full, the lender shall give a signed and dated receipt to the borrower making a payment showing the amount paid and the balance due on the small loan.
    (4) The lender shall provide to each borrower a copy of the required loan documents before the disbursement of the loan proceeds.
    (5) A borrower may rescind a small loan without cost not later than the end of the business day immediately following the day on which the small loan was made. To rescind a small loan, a borrower must:
        (a) inform the lender that the borrower wants to rescind the small loan; and
        (b) return the cash amount of the principal of the small loan to the lender.
    (6) A lender shall not enter into a renewal with a borrower. If a loan

is paid in full, a subsequent loan is not a renewal.

SOURCE: IC 24-4.5-7-404; (07)SE0559.1.27. -->     SECTION 27. IC 24-4.5-7-404, AS AMENDED BY P.L.57-2006, SECTION 17, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 404. (1) As used in this section, .commercially reasonable method of verification. means one (1) or more private consumer credit reporting services that the department determines to be capable of providing a lender with adequate verification information necessary to ensure compliance with subsection (4).
    (2) With respect to a small loan, no lender may permit a person to become obligated under more than one (1) loan agreement with the lender at any time.
    (3) A lender shall not make a small loan that, when combined with the outstanding balance on another outstanding small loan owed to another lender, exceeds a total of five hundred fifty dollars ($500), when the face amounts of the checks written or debits authorized in connection with each loan are combined into a single sum. ($550), excluding finance charges. A lender shall not make a small loan to a borrower who has two (2) or more small loans outstanding, regardless of the total value of the small loans. The amount of five hundred fifty dollars ($550) in this subsection is subject to change under the provisions on adjustment of dollar amounts (IC 24-4.5-1-106). However, notwithstanding IC 24-4.5-1-106(1), the Reference Base Index to be used under this subsection is the Index for October 2006.
    (4) A lender complies with subsection (3) if the borrower represents in writing that the borrower does not have any outstanding small loans with the lender, another lender, an affiliate of the lender or another lender, or a separate entity involved in a business association with the lender or another lender in making small loans, and the lender independently verifies the accuracy of the borrower's written representation through a commercially reasonable method of verification. A lender's method of verifying whether a borrower has any outstanding small loans will be considered commercially reasonable if the method includes a manual investigation or an electronic query of:
        (a) the lender's own records, including both records maintained at the location where the borrower is applying for the transaction and records maintained at other locations within the state that are owned and operated by the lender; and
        (b) available third party databases provided by private consumer reporting services.
    (5) The department shall monitor the effectiveness of private consumer credit reporting services in providing the verification

information required under subsection (4). If the department determines that one (1) or more commercially reasonable methods of verification are available, the department shall:
        (a) provide reasonable notice to all lenders identifying the commercially reasonable methods of verification that are available; and
        (b) require each lender to use, consistent with the policies of the department, one (1) of the identified commercially reasonable methods of verification as a means of complying with subsection (4).
     (6) If a borrower presents evidence to a lender that a loan has been discharged in bankruptcy, the lender shall cause the record of the borrower's loan to be updated in the database described in subsection (4)(b) to reflect the bankruptcy discharge.
    (7) A lender shall cause the record of a borrower's loan to be updated in the database described in subsection (4)(b) to reflect:
        (a) presentment of the borrower's check for payment; or
        (b) exercise of the borrower's authorization to debit the borrower's account.
If a check is returned or an authorization is dishonored because of insufficient funds in the borrower's account, the lender shall reenter the record of the loan in the database.
    (8) A lender shall update information in a database described in subsection (4)(b) to reflect partial payments made on an outstanding loan, the record of which is maintained in the database.
    (9) If a lender ceases doing business in Indiana, the director may require one (1) or more operators of databases described in subsection (4)(b) to remove records of the lender's loans from the operator's database.
    (10) The director may impose a civil penalty not to exceed one hundred dollars ($100) for each violation of:
        (a) this section; or
        (b) any rule or policy adopted by the director to implement this section.
    (6) (11) The excess amount of loan finance charge provided for in agreements in violation of this section is an excess charge for purposes of the provisions concerning effect of violations on rights of parties (IC 24-4.5-5-202) and the provisions concerning civil actions by the department (IC 24-4.5-6-113).

SOURCE: IC 24-7-1-5; (07)SE0559.1.28. -->     SECTION 28. IC 24-7-1-5 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 5. Rental purchase

agreements involving:
        (1) motor vehicles (as defined in IC 9-13-2-105(a)); or
        (2) other titled property;
are prohibited under this article.

SOURCE: IC 24-7-2-9; (07)SE0559.1.29. -->     SECTION 29. IC 24-7-2-9 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 9. (a) .Rental purchase agreement. means an agreement between a lessor and a lessee that:
        (1) provides for the use of personal property by an individual primarily for personal, family, or household purposes;
        (2) has an initial period of four (4) months or less;
        (3) is automatically renewable with each rental payment; and
        (4) permits the lessee to become the owner of the property.
     (b) The term includes:
        (1) an agreement; or
        (2) a transaction;
that the director determines to be a rental purchase agreement, despite efforts by a person to structure the transaction in a manner that the director determines is being used to avoid application of this article.

SOURCE: IC 24-7-5-5. -->     SECTION 30. IC 24-7-5-5 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 5. (a) The parties may contract for late charges or delinquency fees as follows:
        (1) For rental purchase agreements with monthly renewal dates, a late charge not exceeding five eight dollars ($5) ($8) may be assessed on any rental payment not made within five (5) days after:
            (A) the renewal date for the agreement; or
            (B) the return of the property is required under the rental purchase agreement.
        (2) For rental purchase agreements with weekly or biweekly renewal dates, a late charge not exceeding the amount specified in subsection (e) may be assessed on any rental payments not made within three (3) two (2) days after:
            (A) the renewal date for the agreement; or
            (B) the return of the property is required under the rental purchase agreement.
    (b) A late charge on a rental purchase agreement may be collected only once on any accrued rental payment, no matter how long it remains unpaid.
    (c) A late charge may be collected at any time after it accrues.
    (d) A late charge may not be assessed against a rental payment that is timely made, even though an earlier late charge has not been paid in

full.
    (e) The amount that may be assessed under subsection (a)(2) is as follows:
        (1) One dollar ($1) Three dollars ($3) for any payment not greater than nine dollars and fifty cents ($9.50). twenty dollars ($20).
        (2) Two dollars ($2) for any payment greater than nine dollars and fifty cents ($9.50) but not greater than nineteen dollars and fifty cents ($19.50).
        (3) Three (2) Five dollars ($3) ($5) for any payment greater than nineteen dollars and fifty cents ($19.50). twenty dollars ($20).

SOURCE: IC 24-7-5-5.5; (07)SE0559.1.31. -->     SECTION 31. IC 24-7-5-5.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 5.5. A lessor may contract for and receive a charge not to exceed twenty-five dollars ($25) for each return by a bank or other depository institution of a dishonored check, negotiable order of withdrawal, or share draft issued by the lessee.

SOURCE: IC 26-1-3.1-502.5; (07)SE0559.1.32. -->     SECTION 32. IC 26-