February 22, 2008



ENGROSSED

SENATE BILL No. 89

_____


DIGEST OF SB 89 (Updated February 20, 2008 4:42 pm - DI 101)


Citations Affected: IC 4-6; IC 5-20; IC 6-1.1; IC 20-24; IC 20-30; IC 23-2; IC 24-4.4; IC 24-4.5; IC 24-5; IC 24-9; IC 25-34.1; IC 27-7; IC 34-30; noncode.

Synopsis: Requires the homeowner protection unit (unit) within the attorney general's office to establish a toll free telephone number to receive calls from persons having information about suspected fraudulent transactions and practices concerning residential real estate transactions. Requires the unit to share information reported by callers to the telephone number with appropriate law enforcement and regulatory agencies. Allows the Indiana housing and community development authority (authority) to make or participate in the making of: (1) construction loans; and (2) mortgage loans; for multiple family residential housing under terms approved by the authority. Requires the authority to ensure that a mortgage loan: (1) acquired by the authority; or (2) made by a mortgage lender with funds provided by the authority; may not know knowingly be made to a person whose adjusted family income exceeds 125% of the median income for the geographic area involved. For purposes of allocating federal low income housing credits, provides that a "qualified building" is a building that is used or
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Effective: Upon passage; July 1, 2008; January 1, 2009.



Lawson C , Lanane , Young R Michael, Paul, Zakas, Steele, Drozda
(HOUSE SPONSORS _ GRUBB, AUSTIN, HARRIS T, BORROR)


    January 8, 2008, read first time and referred to Committee on Corrections, Criminal, and Civil Matters.
    January 15, 2008, amended, reported favorably _ Do Pass.
    January 22, 2008, read second time, amended, ordered engrossed.
    January 23, 2008, engrossed.
    January 24, 2008, read third time, passed. Yeas 48, nays 0.

HOUSE ACTION

    January 30, 2008, read first time and referred to Committee on Financial Institutions.
    February 21, 2008, amended, reported _ Do Pass.


Digest Continued

will be used to provide residential housing for special needs populations. (Current law provides that a "qualified building" is a building that is used or will be used to provide residential housing for persons with disabilities.) Provides that the authority's authority to issue bonds is subject to the approval of the public finance director. (Current law provides that the authority's bonding authority is subject to the approval of the governor.) Repeals provisions concerning job and contract awarding preferences for the authority's program for making or participating in the making of mortgage loans for multiple family residential housing. Repeals provisions concerning the articles of incorporation of sponsors, builders, or developers of multiple family residential housing. Beginning with the school year that begins in 2010, requires school corporations and accredited nonpublic schools to include in their curricula for grades 9 through 12 instruction designed to: (1) increase students' awareness of consumer transactions, including mortgage transactions; and (2) foster personal financial responsibility. Provides that a school corporation or an accredited nonpublic school may provide the instruction by integrating it into its mathematics curriculum. Requires the department of education and the department of financial institutions to develop guidelines to assist teachers assigned to provide the instruction. Increases the amount of the bond that a licensed loan broker must maintain with the commissioner from $50,000 to $100,000. Eliminates the exemption from the loan broker statute for: (1) persons authorized to make loans on behalf of, or insured by, certain federal agencies; and (2) licensed real estate brokers and salespersons who render loan related services in a real estate transaction. Specifies that evidence of compliance with the licensing and registration requirements for loan brokers, originators, and principal managers may include a national criminal history background check by the Federal Bureau of Investigation (FBI). Specifies that the securities commissioner (commissioner) shall require each: (1) equitable owner of a loan brokerage business; and (2) applicant for registration as an originator or a principal manager; to submit fingerprints for a national criminal history background check by the FBI. Prohibits the commissioner from releasing the results of a national criminal history background check to a private entity. Allows the commissioner to designate a multistate automated licensing system and repository (system) as the sole entity responsible for processing applications for: (1) licenses for loan brokers; and (2) certificates of registration for originators and principal managers. Allows the commissioner to check the qualifications and background of each: (1) equitable owner of a loan brokerage business; and (2) applicant for registration as an originator or a principal manager; by accessing the system. Specifies that a loan broker is subject to the state statute requiring disclosure of a breach of the security of any records: (1) maintained by the broker; and (2) containing the personal information of a borrower or prospective borrower. Prohibits loan brokers, originators, and principal managers from disposing of unencrypted, unredacted personal information with respect to borrowers or prospective borrowers without first taking certain actions to render the personal information illegible or unusable. Prohibits a person from performing specified acts in connection with a contract for the services of a loan broker. Provides that: (1) first lien mortgage transactions are subject to regulation by; and (2) creditors making first lien mortgage transactions must be licensed by; the department of financial institutions. Requires a creditor, a mortgage servicer, or an agent of a creditor to acknowledge a written offer made in connection with a proposed short sale of property that is subject to a mortgage transaction that is at least 10 days delinquent. Provides that the acknowledgment must be provided not later than 10 business days after the date of the offer. Requires the creditor, servicer, or agent to accept or reject the short sale offer not later than 20 business days after receipt of the offer.
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Digest Continued

Requires the department of insurance to establish an electronic system for the collection and storage of the: (1) names; and (2) license, registration, or certificate numbers; of certain professionals that participate in or assist with residential mortgage transactions. Provides that the system must allow closing agents to: (1) input the required information with respect to each professional involved in the transaction; and (2) submit the form electronically to a data base maintained by the department of insurance. Requires the department of insurance to make the data base accessible to: (1) the state agencies responsible for regulating the specified professionals; and (2) the homeowner protection unit in the attorney general's office. Specifies that a violation of the home loan practices act is a deceptive act subject to action by the attorney general. For a deceptive act involving home loan practices, increases: (1) the damages that may be awarded to an aggrieved consumer; and (2) the amount of the civil penalties that may be imposed on a violator. Provides that any civil penalties collected by the attorney general shall be deposited in the home owner protection unit account in the general fund. Prohibits a creditor from recommending or issuing to a prospective borrower: (1) a stated income or no documentation loan; or (2) a home loan if the creditor does not first conduct a reasonable inquiry concerning the prospective borrower's ability to repay the loan. Provides that if a creditor conducts a reasonable inquiry, the creditor is not liable if the borrower later defaults on a home loan issued by the creditor. Requires a settlement service provider to make closing documents available to a borrower at least 48 hours before the closing, subject to the settlement service provider's ability to obtain the closing documents from the creditor making the home loan, after the settlement service provider's good faith effort to obtain the closing documents from the creditor. Provides that if: (1) the borrower does not receive the closing documents within the time required; or (2) the terms of the home loan set forth in the documents provided differ from the terms presented to the borrower at the time of closing; the borrower is entitled to delay or reschedule the closing without penalty and without forfeiting the right to enter into the loan or the purchase contract. Increases the statutory damages that may be recovered by a person aggrieved by a violation of the home loan practices act (act) from: (1) two times; to (2) four times; the amount of the finance charges under the contract. Enhances the crime involving a knowing or intentional violation of the act from a Class A misdemeanor to a Class D felony. Increases the civil penalty for the violation of: (1) the act; or (2) an injunction issued to enjoin a violation of the act; from $10,000 to $20,000. Requires the real estate appraiser licensure and certification board to require each initial applicant for licensure or certification as a real estate appraiser to submit fingerprints for a national criminal history background check by the FBI. Prohibits the board from releasing the results of a national criminal history background check to a private entity. Requires various state agencies to form the mortgage lending and fraud prevention task force to coordinate the state's efforts to: (1) regulate the various participants involved in originating, issuing, and closing home loans; (2) enforce state laws and rules concerning mortgage lending practices and mortgage fraud; and (3) prevent fraudulent practices in the home loan industry and investigate and prosecute cases involving mortgage fraud. Requires the Indiana housing and community development authority to provide, not later than November 1, 2008, a report to the legislative council that includes the following: (1) An identification of new and existing funding sources that can be used to assist Indiana homeowners in refinancing their existing mortgage transactions, in order to prevent the foreclosure of the homes secured by the mortgages. (2) A plan for the rehabilitation of areas in Indiana that have been adversely or disproportionately affected by mortgage foreclosures. Requires the securities commissioner and the director of the department of financial
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Digest Continued

institutions to cooperate to determine the appropriate state agency or department to regulate a person subject to regulation, licensure, or registration under both the loan broker statute and the UCCC. Makes
technical changes. (The introduced version of this bill was prepared by the interim study committee on mortgage practices and home loan foreclosures.)

February 22, 2008

Second Regular Session 115th General Assembly (2008)


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 2007 Regular Session of the General Assembly.


ENGROSSED

SENATE BILL No. 89


    A BILL FOR AN ACT to amend the Indiana Code concerning business and other associations.

Be it enacted by the General Assembly of the State of Indiana:

SOURCE: IC 4-6-12-3.5; (08)ES0089.1.1. -->     SECTION 1. IC 4-6-12-3.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 3.5. (a) Not later than July 1, 2008, the unit shall establish a toll free telephone number to receive calls from persons having information about suspected fraudulent:
        (1) mortgage lending practices;
        (2) real estate appraisals; or
        (3) other practices;
involving residential real estate transactions.
    (b) The toll free telephone number required by this section shall be staffed by:
        (1) employees or investigators of the unit who have knowledge of the laws concerning:
            (A) mortgage lending practices;
            (B) real estate appraisals; or
            (C) other practices;
        involving residential real estate transactions;
        (2) representatives of any of the entities described in section 4(a)(8) through 4(a)(10) of this chapter who have knowledge of the laws concerning:
            (A) mortgage lending practices;
            (B) real estate appraisals; or
            (C) other practices;
        involving residential real estate transactions; or
        (3) a combination of persons described in subdivisions (1) and (2).
The attorney general shall designate persons to staff the toll free telephone number as required by this subsection.
    (c) The persons designated by the attorney general under subsection (b) to staff the toll free telephone number required by this section shall ensure that any information received from callers to the telephone number is shared with any entity described in section 4 of this chapter that has jurisdiction over the matter reported. The unit shall establish uniform procedures for:
        (1) responding to calls received;
        (2) protecting:
            (A) the anonymity of callers who wish to report information anonymously; or
            (B) the identity of callers who request that their identity not be disclosed;
        (3) documenting and verifying information reported by callers; and
        (4) transmitting reported information to the appropriate entities described in section 4 of this chapter.
    (d) The unit shall publicize the availability of the toll free telephone number established under this section in a manner reasonably designed to reach members of the public.
SOURCE: IC 4-6-12-8; (08)ES0089.1.2. -->     SECTION 2. IC 4-6-12-8, AS AMENDED BY P.L.181-2006, SECTION 14, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 8. The unit shall cooperate with the Indiana housing and community development authority in the development and implementation of the home ownership education programs established under IC 5-20-1-4(f). IC 5-20-1-4(d).
SOURCE: IC 4-6-12-9; (08)ES0089.1.3. -->     SECTION 3. IC 4-6-12-9, AS AMENDED BY P.L.64-2007, SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 9. (a) The homeowner protection unit account within the general fund is established to support the operations of the unit. The account is administered by the attorney general.
    (b) The homeowner protection unit account consists of:
         (1) fees collected under IC 24-9-9; and
        (2) civil penalties collected under IC 24-5-0.5-4(l)(3).
    (c) The expenses of administering the homeowner protection unit account shall be paid from money in the account.
    (d) The treasurer of state shall invest the money in the homeowner protection unit account not currently needed to meet the obligations of the account in the same manner as other public money may be invested.
    (e) Money in the homeowner protection unit account at the end of a state fiscal year does not revert to the state general fund.
SOURCE: IC 5-20-1-4; (08)ES0089.1.4. -->     SECTION 4. IC 5-20-1-4, AS AMENDED BY P.L.99-2007, SECTION 20, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 4. (a) The authority has all of the powers necessary or convenient to carry out and effectuate the purposes and provisions of this chapter, including the power:
        (1) to make or participate in the making of construction loans to sponsors of for multiple family residential housing that is federally assisted or assisted by a government sponsored enterprise, such as the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, or the Federal Agricultural Mortgage Corporation, the Federal Home Loan Bank, and other similar entities under terms that are approved by the authority;
        (2) to make or participate in the making of mortgage loans to sponsors of for multiple family residential housing that is federally assisted or assisted by a government sponsored enterprise, such as the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, or the Federal Agricultural Mortgage Corporation, the Federal Home Loan Bank, and other similar entities under terms that are approved by the authority;
        (3) to purchase or participate in the purchase from mortgage lenders of mortgage loans made to persons of low and moderate income for residential housing;
        (4) to make loans to mortgage lenders for the purpose of furnishing funds to such mortgage lenders to be used for making mortgage loans for persons and families of low and moderate income. However, the obligation to repay loans to mortgage lenders shall be general obligations of the respective mortgage lenders and shall bear such date or dates, shall mature at such time or times, shall be evidenced by such note, bond, or other certificate of indebtedness, shall be subject to prepayment, and shall contain such other provisions consistent with the purposes

of this chapter as the authority shall by rule or resolution determine;
        (5) to collect and pay reasonable fees and charges in connection with making, purchasing, and servicing of its loans, notes, bonds, commitments, and other evidences of indebtedness;
        (6) to acquire real property, or any interest in real property, by conveyance, including purchase in lieu of foreclosure, or foreclosure, to own, manage, operate, hold, clear, improve, and rehabilitate such real property and sell, assign, exchange, transfer, convey, lease, mortgage, or otherwise dispose of or encumber such real property where such use of real property is necessary or appropriate to the purposes of the authority;
        (7) to sell, at public or private sale, all or any part of any mortgage or other instrument or document securing a construction loan, a land development loan, a mortgage loan, or a loan of any type permitted by this chapter;
        (8) to procure insurance against any loss in connection with its operations in such amounts and from such insurers as it may deem necessary or desirable;
        (9) to consent, subject to the provisions of any contract with noteholders or bondholders which may then exist, whenever it deems it necessary or desirable in the fulfillment of its purposes to the modification of the rate of interest, time of payment of any installment of principal or interest, or any other terms of any mortgage loan, mortgage loan commitment, construction loan, loan to lender, or contract or agreement of any kind to which the authority is a party;
        (10) to enter into agreements or other transactions with any federal, state, or local governmental agency for the purpose of providing adequate living quarters for such persons and families in cities and counties where a need has been found for such housing;
        (11) to include in any borrowing such amounts as may be deemed necessary by the authority to pay financing charges, interest on the obligations (for a period not exceeding the period of construction and a reasonable time thereafter or if the housing is completed, two (2) years from the date of issue of the obligations), consultant, advisory, and legal fees and such other expenses as are necessary or incident to such borrowing;
        (12) to make and publish rules respecting its lending programs and such other rules as are necessary to effectuate the purposes of this chapter;

        (13) to provide technical and advisory services to sponsors, builders, and developers of residential housing and to residents and potential residents, including housing selection and purchase procedures, family budgeting, property use and maintenance, household management, and utilization of community resources;
        (14) to promote research and development in scientific methods of constructing low cost residential housing of high durability;
        (15) to encourage community organizations to participate in residential housing development;
        (16) to make, execute, and effectuate any and all agreements or other documents with any governmental agency or any person, corporation, association, partnership, limited liability company, or other organization or entity necessary or convenient to accomplish the purposes of this chapter;
        (17) to accept gifts, devises, bequests, grants, loans, appropriations, revenue sharing, other financing and assistance and any other aid from any source whatsoever and to agree to, and to comply with, conditions attached thereto;
        (18) to sue and be sued in its own name, plead and be impleaded;
        (19) to maintain an office in the city of Indianapolis and at such other place or places as it may determine;
        (20) to adopt an official seal and alter the same at pleasure;
        (21) to adopt and from time to time amend and repeal bylaws for the regulation of its affairs and the conduct of its business and to prescribe rules and policies in connection with the performance of its functions and duties;
        (22) to employ fiscal consultants, engineers, attorneys, real estate counselors, appraisers, and such other consultants and employees as may be required in the judgment of the authority and to fix and pay their compensation from funds available to the authority therefor;
        (23) notwithstanding IC 5-13, but subject to the requirements of any trust agreement entered into by the authority, to invest:
            (A) the authority's money, funds, and accounts;
            (B) any money, funds, and accounts in the authority's custody; and
            (C) proceeds of bonds or notes;
        in the manner provided by an investment policy established by resolution of the authority;
        (24) to make or participate in the making of construction loans, mortgage loans, or both, to individuals, partnerships, limited liability companies, corporations, and organizations for the

construction of residential facilities for individuals with a developmental disability or for individuals with a mental illness or for the acquisition or renovation, or both, of a facility to make it suitable for use as a new residential facility for individuals with a developmental disability or for individuals with a mental illness;
        (25) to make or participate in the making of construction and mortgage loans to individuals, partnerships, corporations, limited liability companies, and organizations for the construction, rehabilitation, or acquisition of residential facilities for children;
        (26) to purchase or participate in the purchase of mortgage loans from:
            (A) public utilities (as defined in IC 8-1-2-1); or
            (B) municipally owned gas utility systems organized under IC 8-1.5;
        if those mortgage loans were made for the purpose of insulating and otherwise weatherizing single family residences in order to conserve energy used to heat and cool those residences;
        (27) to provide financial assistance to mutual housing associations (IC 5-20-3) in the form of grants, loans, or a combination of grants and loans for the development of housing for low and moderate income families;
        (28) to service mortgage loans made or acquired by the authority and to impose and collect reasonable fees and charges in connection with such servicing;
        (29) subject to the authority's investment policy, to enter into swap agreements (as defined in IC 8-9.5-9-4) in accordance with IC 8-9.5-9-5 and IC 8-9.5-9-7;
        (30) to promote and foster community revitalization through community services and real estate development;
        (31) to coordinate and establish linkages between governmental and other social services programs to ensure the effective delivery of services to low income individuals;
        (32) to cooperate with local housing officials and plan commissions in the development of projects that the officials or commissions have under consideration;
        (33) to take actions necessary to implement its powers that the authority determines to be appropriate and necessary to ensure the availability of state or federal financial assistance; and
        (34) to administer any program or money designated by the state or available from the federal government or other sources that is consistent with the authority's powers and duties.
The omission of a power from the list in this subsection does not imply

that the authority lacks that power. The authority may exercise any power that is not listed in this subsection but is consistent with the powers listed in this subsection to the extent that the power is not expressly denied by the Constitution of the State of Indiana or by another statute.
    (b) The authority shall structure and administer any program conducted ensure that a mortgage loan acquired by the authority under subsection (a)(3) or made by a mortgage lender with funds provided by the authority under subsection (a)(4) in order to assure that no mortgage loan shall is not knowingly be made to a person whose adjusted family income, shall exceed as determined by the authority, exceeds one hundred twenty-five percent (125%) of the median income for the geographic area within which the person resides and at least forty percent (40%) of the mortgage loans so financed shall be for persons whose adjusted family income shall be below eighty percent (80%) of the median income for such area. involved. However, if the authority determines that additional encouragement is needed for the development of the geographic area involved, a mortgage loan acquired or made under subsection (a)(3) or (a)(4) may be made to a person whose adjusted family income, as determined by the authority, does not exceed one hundred forty percent (140%) of the median income for the geographic area involved. The authority shall establish procedures that the authority determines are appropriate to structure and administer any program conducted under subsection (a)(3) or (a)(4) for the purpose of acquiring or making mortgage loans to persons of low or moderate income. In determining what constitutes low income, moderate income, or median income for purposes of any program conducted under subsection (a)(3) or (a)(4), the authority shall consider:
        (1) the appropriate geographic area in which to measure income levels; and
        (2) the appropriate method of calculating low income, moderate income, or median income levels including:
            (A) sources of;
            (B) exclusions from; and
            (C) adjustments to;
        income.
    (c) In addition to the powers set forth in subsection (a), the authority may, with the proceeds of bonds and notes sold to retirement plans covered by IC 5-10-1.7, structure and administer a program of purchasing or participating in the purchasing from mortgage lenders of

mortgage loans made to qualified members of retirement plans and other individuals. The authority shall structure and administer any program conducted under this subsection to assure that:
        (1) each mortgage loan is made as a first mortgage loan for real property:
            (A) that is a single family dwelling, including a condominium or townhouse, located in Indiana;
            (B) for a purchase price of not more than ninety-five thousand dollars ($95,000);
            (C) to be used as the purchaser's principal residence; and
            (D) for which the purchaser has made a down payment in an amount determined by the authority;
        (2) no mortgage loan exceeds seventy-five thousand dollars ($75,000);
        (3) any bonds or notes issued which are backed by mortgage loans purchased by the authority under this subsection shall be offered for sale to the retirement plans covered by IC 5-10-1.7; and
        (4) qualified members of a retirement plan shall be given preference with respect to the mortgage loans that in the aggregate do not exceed the amount invested by their retirement plan in bonds and notes issued by the authority that are backed by mortgage loans purchased by the authority under this subsection.
    (d) As used in this section, "a qualified member of a retirement plan" means an active or retired member:
        (1) of a retirement plan covered by IC 5-10-1.7 that has invested in bonds and notes issued by the authority that are backed by mortgage loans purchased by the authority under subsection (c); and
        (2) who for a minimum of two (2) years preceding the member's application for a mortgage loan has:
            (A) been a full-time state employee, teacher, judge, police officer, or firefighter;
            (B) been a full-time employee of a political subdivision participating in the public employees' retirement fund;
            (C) been receiving retirement benefits from the retirement plan; or
            (D) a combination of employment and receipt of retirement benefits equaling at least two (2) years.
    (e) (c) The authority, when directed by the governor, shall administer programs and funds under 42 U.S.C. 1437 et seq.
    (f) (d) The authority shall identify, promote, assist, and fund home ownership education programs conducted throughout Indiana by

nonprofit counseling agencies certified by the authority using funds appropriated under section 27 of this chapter. The attorney general and the entities listed in IC 4-6-12-4(a)(1) through IC 4-6-12-4(a)(10) shall cooperate with the authority in implementing this subsection.

SOURCE: IC 5-20-1-4.5; (08)ES0089.1.5. -->     SECTION 5. IC 5-20-1-4.5 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 4.5. (a) As used in this section, "person with a disability" means a person who, by reason of physical, mental, or emotional defect or infirmity, whether congenital or acquired by accident, injury, or disease, is totally or partially prevented from achieving the fullest attainable physical, social, economic, mental, and vocational participation in the normal process of living. "special needs populations" include the following:
        (1) Persons with physical or developmental disabilities.
        (2) Persons with mental impairments.
        (3) Single parent households.
        (4) Victims of domestic violence.
        (5) Abused children.
        (6) Persons with chemical addictions.
        (7) Homeless persons.
        (8) The elderly.
    (b) As used in this section, "qualified building" means a building:
        (1) that is used or will be used to provide residential housing for persons with disabilities; special needs populations; and
        (2) for which a taxpayer is eligible to claim a low income housing credit under 26 U.S.C. 42.
    (c) Subject to subsection (d), the authority shall allocate to qualified buildings at least ten percent (10%) of the total dollar amount of federal low income housing credits allocated to the authority under 26 U.S.C. 42. The authority shall allocate credits under this section based on the proportionate amount of a qualified building that is used to provide residential housing for persons with disabilities, special needs populations, as determined by the authority.
    (d) The authority shall hold available the allocation made under subsection (c) for qualified buildings through October 31 of each calendar year. Beginning November 1 of each calendar year, any part of the allocation that remains unassigned shall be available for any appropriate use under 26 U.S.C. 42.
SOURCE: IC 5-20-1-8; (08)ES0089.1.6. -->     SECTION 6. IC 5-20-1-8, AS AMENDED BY P.L.235-2005, SECTION 89, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 8. (a) Subject to the approval of the governor, public finance director appointed under IC 4-4-11-9, the authority is hereby authorized to issue bonds or notes, or a combination thereof,

to carry out and effectuate its purposes and powers. The principal of, and the interest on, such bonds or notes shall be payable solely from the funds provided for such payment in this chapter. The authority may secure the repayment of such bonds and notes by the pledge of mortgages and notes of others, revenues derived from operations and loan repayments, the proceeds of its bonds, and any available revenues or assets of the authority. The bonds or notes of each issue shall be dated and may be made redeemable before maturity at the option of the authority, at such price or prices and under such terms and conditions as may be determined by the authority. Any such bonds or notes shall bear interest at such rate or rates as may be determined by the authority. Notes shall mature at such time or times not exceeding ten (10) years from their date or dates, and bonds shall mature at such time or times not exceeding forty-five (45) years from their date or dates, as may be determined by the authority. The authority shall determine the form and manner of execution of the bonds or notes, including any interest coupons to be attached thereto, and shall fix the denomination or denominations and the place or places of payment of principal and interest, which may be any bank or trust company within or outside the state. In case any officer whose signature, or a facsimile of whose signature, shall appear on any bonds or notes or coupons attached thereto shall cease to be such officer before the delivery thereof, such signature or such facsimile shall nevertheless be valid and sufficient for all purposes the same as if he the person had remained in office until such delivery. The authority may also provide for the authentication of the bonds or notes by a trustee or fiscal agent. The bonds or notes may be issued in coupon or registered form, or both, as the authority may determine, and provision may be made for the registration of any coupon bonds or notes as to principal alone and also as to both principal and interest, and for the reconversion into coupon bonds or notes of any bonds or notes registered as to both principal and interest, and for the interchange of registered and coupon bonds or notes. Upon the approval of a resolution of the authority authorizing the sale of its bonds or notes, such bonds or notes may be sold in such manner, either at public or private sale, and for such price as the authority shall determine to be for the best interest of the authority and to best effectuate the purposes of this chapter.
    (b) The proceeds of any bonds or notes shall be used solely for the purposes for which they are issued. The proceeds shall be disbursed in such manner and under such restrictions, if any, as the authority may provide in the resolution authorizing the issuance of such bonds or notes or in the trust agreement securing the same.

    (c) Prior to the preparation of definitive bonds, the authority may, under like restrictions and subject to the approval of the governor, public finance director appointed under IC 4-4-11-9, issue interim receipts or temporary bonds, with or without coupons, exchangeable for definitive bonds when such bonds shall have been executed and are available for delivery. The authority may also provide for the replacement of any bonds or notes which shall become mutilated or shall be destroyed or lost.
    (d) The authority shall cooperate with and use the assistance of the Indiana finance authority established under IC 4-4-11 in the issuance of the bonds or notes.
SOURCE: IC 5-20-1-18; (08)ES0089.1.7. -->     SECTION 7. IC 5-20-1-18, AS AMENDED BY P.L.235-2005, SECTION 90, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 18. The authority shall, promptly following the close of each fiscal year, submit an annual report of its activities for the preceding year to the governor, public finance director appointed under IC 4-4-11-9, the budget committee, and the general assembly. An annual report submitted under this section to the general assembly must be in an electronic format under IC 5-14-6. The report shall set forth a complete operating and financial statement of the authority during such year, and a copy of such report shall be available to inspection by the public at the Indianapolis office of the authority. The authority shall cause an audit of its books and accounts to be made at least once in each year by an independent certified public accountant and the cost thereof may be paid from any available money of the authority.
SOURCE: IC 5-20-1-27; (08)ES0089.1.8. -->     SECTION 8. IC 5-20-1-27, AS AMENDED BY P.L.181-2006, SECTION 20, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 27. (a) The home ownership education account within the state general fund is established to support the home ownership education programs established under section 4(f) 4(d) of this chapter. The account is administered by the authority.
    (b) The home ownership education account consists of fees collected under IC 24-9-9.
    (c) The expenses of administering the home ownership education account shall be paid from money in the fund. account.
    (d) The treasurer of state shall invest the money in the home ownership education account not currently needed to meet the obligations of the account in the same manner as other public money may be invested.
SOURCE: IC 5-20-3-4; (08)ES0089.1.9. -->     SECTION 9. IC 5-20-3-4, AS AMENDED BY P.L.181-2006, SECTION 23, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE

JULY 1, 2008]: Sec. 4. (a) A mutual housing association may be established as a nonprofit corporation incorporated under IC 23-7-1.1 (before its repeal on August 1, 1991) or IC 23-17 to prevent and eliminate neighborhood deterioration and to preserve neighborhood stability by:
        (1) providing high quality, long term housing for families of low and moderate income; and
        (2) affording community and residential involvement in the provision of that housing.
    (b) The articles of incorporation of a mutual housing association must meet the requirements of the Indiana housing and community development authority under IC 5-20-1-6 and must be approved by the authority.
    (c) The articles of incorporation of a mutual housing association must include a provision that provides that if the mutual housing association dissolves, is involved in a bankruptcy proceeding, or otherwise disposes of its physical properties, the association may only transfer the assets to another entity that provides high quality long term housing for families of low and moderate income.".

SOURCE: IC 6-1.1-12-43; (08)ES0089.1.10. -->     SECTION 10. IC 6-1.1-12-43 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 43. (a) For purposes of this section:
        (1) "benefit" refers to:
            (A) a deduction under section 1, 9, 11, 13, 14, 16, 17.4, 26, 29, 31, 33, or 34 of this chapter; or
            (B) the homestead credit under IC 6-1.1-20.9-2;
        (2) "closing agent" means a person that closes a transaction;
        (3) "customer" means an individual who obtains a loan in a transaction; and
        (4) "transaction" means a single family residential:
            (A) first lien purchase money mortgage transaction; or
            (B) refinancing transaction.
    (b) Before closing a transaction after December 31, 2004, a closing agent must provide to the customer the form referred to in subsection (c).
    (c) Before June 1, 2004, the department of local government finance shall prescribe the form to be provided by closing agents to customers under subsection (b). The department shall make the form available to closing agents, county assessors, county auditors, and county treasurers in hard copy and electronic form. County assessors, county auditors, and county treasurers shall make the form available to the general public. The form must:
        (1) on one (1) side:
            (A) list each benefit;
            (B) list the eligibility criteria for each benefit; and
            (C) indicate that a new application for a deduction under section 1 of this chapter is required when residential real property is refinanced;
        (2) on the other side indicate:
            (A) each action by; and
            (B) each type of documentation from;
        the customer required to file for each benefit; and
        (3) be printed in one (1) of two (2) or more colors prescribed by the department of local government finance that distinguish the form from other documents typically used in a closing referred to in subsection (b).
    (d) A closing agent:
        (1) may reproduce the form referred to in subsection (c);
        (2) in reproducing the form, must use a print color prescribed by the department of local government finance; and
        (3) is not responsible for the content of the form referred to in subsection (c) and shall be held harmless by the department of local government finance from any liability for the content of the form.
     (e) This subsection applies to a transaction that is closed after December 31, 2009. In addition to providing the customer the form described in subsection (c) before closing the transaction, a closing agent shall do the following as soon as possible after the closing, and within the time prescribed by the department of insurance under IC 27-7-3-15.5:
        (1) Input the information described in IC 27-7-3-15.5(b) into the system maintained by the department of insurance under IC 27-7-3-15.5.
        (2) Submit the form described in IC 27-7-3-15.5(c) to the data base described in IC 27-7-3-15.5(c)(2)(B).
    (e) (f) A closing agent to which this section applies shall document its the closing agent's compliance with this section with respect to each transaction in the form of verification of compliance signed by the customer.
    (f) (g) A closing agent is subject to a civil penalty of twenty-five dollars ($25) for each instance in which the closing agent fails to comply with this section with respect to a customer. The penalty:
        (1) may be enforced by the state agency that has administrative jurisdiction over the closing agent in the same manner that the

agency enforces the payment of fees or other penalties payable to the agency; and
        (2) shall be paid into the property tax replacement fund.
     (h) A closing agent is not liable for any other damages claimed by a customer because of:
         (1) the closing agent's mere failure to provide the appropriate document to the customer under subsection (b); or
        (2) with respect to a transaction that is closed after December 31, 2009, the closing agent's failure to input the information or submit the form described in subsection (e).
    (g) (i) The state agency that has administrative jurisdiction over a closing agent shall:
        (1) examine the closing agent to determine compliance with this section; and
        (2) impose and collect penalties under subsection (f). (g).

SOURCE: IC 20-24-8-5; (08)ES0089.1.11. -->     SECTION 11. IC 20-24-8-5, AS AMENDED BY P.L.2-2006, SECTION 111, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 5. The following statutes and rules and guidelines adopted under the following statutes apply to a charter school:
        (1) IC 5-11-1-9 (required audits by the state board of accounts).
        (2) IC 20-39-1-1 (unified accounting system).
        (3) IC 20-35 (special education).
        (4) IC 20-26-5-10 and IC 20-28-5-9 (criminal history).
        (5) IC 20-26-5-6 (subject to laws requiring regulation by state agencies).
        (6) IC 20-28-7-14 (void teacher contract when two (2) contracts are signed).
        (7) IC 20-28-10-12 (nondiscrimination for teacher marital status).
        (8) IC 20-28-10-14 (teacher freedom of association).
        (9) IC 20-28-10-17 (school counselor immunity).
        (10) For conversion charter schools only, IC 20-28-6, IC 20-28-7, IC 20-28-8, IC 20-28-9, and IC 20-28-10.
        (11) IC 20-33-2 (compulsory school attendance).
        (12) IC 20-33-3 (limitations on employment of children).
        (13) IC 20-33-8-19, IC 20-33-8-21, and IC 20-33-8-22 (student due process and judicial review).
        (14) IC 20-33-8-16 (firearms and deadly weapons).
        (15) IC 20-34-3 (health and safety measures).
        (16) IC 20-33-9 (reporting of student violations of law).
        (17) IC 20-30-3-2 and IC 20-30-3-4 (patriotic commemorative observances).
        (18) IC 20-31-3, IC 20-32-4, IC 20-32-5, IC 20-32-6, IC 20-32-8, or any other statute, rule, or guideline related to standardized testing (assessment programs, including remediation under the assessment programs).
        (19) IC 20-33-7 (parental access to education records).
        (20) IC 20-31 (accountability for school performance and improvement).
         (21) Beginning with the school year that begins in the calendar year beginning January 1, 2010, IC 20-30-5-19 (instruction concerning consumer transactions and personal financial responsibility).
SOURCE: IC 20-30-5-19; (08)ES0089.1.12. -->     SECTION 12. IC 20-30-5-19 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 19. (a) Beginning with the school year that begins in the calendar year beginning January 1, 2010, each school corporation (including each charter school) and each nonpublic school that voluntarily has become accredited under IC 20-19-2-8 shall include in its curriculum for all students in grades 9 through 12 instruction designed to:
        (1) increase students' awareness of certain consumer transactions, including mortgage transactions; and
        (2) foster personal financial responsibility.
    (b) A school corporation (including a charter school) and a nonpublic school that voluntarily has become accredited under IC 20-19-2-8 may meet the requirements of subsection (a) by:
        (1) integrating the instruction described in subsection (a) in its required mathematics curriculum; or
        (2) conducting a separate class or seminar that includes the instruction described in subsection (a).
    (c) A person may not receive a high school diploma from a school subject to this section unless the person has received the instruction required by this section.
    (d) The department, in collaboration with the department of financial institutions established by IC 28-11-1-1, shall develop guidelines and the state board shall adopt rules under IC 4-22-2 to assist teachers assigned to provide the instruction required by this section.
SOURCE: IC 23-2-5-3; (08)ES0089.1.13. -->     SECTION 13. IC 23-2-5-3, AS AMENDED BY P.L.230-2007, SECTION 6, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 3. (a) As used in this chapter, "certificate of registration" means a certificate issued by the commissioner authorizing an individual to:
         (1) engage in origination activities on behalf of a licensee; or
        (2) act as a principal manager on behalf of a licensee.
    (b) As used in this chapter, "creditor" means a person:
        (1) that loans funds of the person in connection with a loan; and
        (2) to whom the loan is initially payable on the face of the note or contract evidencing the loan.
    (c) (b) As used in this chapter, "license" means a license issued by the commissioner authorizing a person to engage in the loan brokerage business.
    (d) (c) As used in this chapter, "licensee" means a person that is issued a license under this chapter.
    (e) (d) As used in this chapter, "loan broker" means any person who, in return for any consideration from any source procures, attempts to procure, or assists in procuring, a loan from a third party or any other person, whether or not the person seeking the loan actually obtains the loan. "Loan broker" does not include:
        (1) any supervised financial organization (as defined in IC 24-4.5-1-301(20)), including a bank, savings bank, trust company, savings association, or credit union;
        (2) any other financial institution that is:
            (A) regulated by any agency of the United States or any state; and
            (B) regularly actively engaged in the business of making consumer loans that are not secured by real estate or taking assignment of consumer sales contracts that are not secured by real estate;
        (3) any insurance company; or
        (4) any person arranging financing for the sale of the person's product; or
        (5) a creditor that is licensed under IC 24-4.4-2-402.
    (f) (e) As used in this chapter, "loan brokerage business" means a person acting as a loan broker.
    (g) (f) As used in this chapter, "origination activities" means communication with or assistance of a borrower or prospective borrower in the selection of loan products or terms.
    (h) (g) As used in this chapter, "originator" means a person engaged in origination activities. The term "originator" does not include a person who performs origination activities for any entity that is not a loan broker under subsection (e). (d).
    (i) (h) As used in this chapter, "person" means an individual, a partnership, a trust, a corporation, a limited liability company, a limited liability partnership, a sole proprietorship, a joint venture, a joint stock

company, or another group or entity, however organized.

    (j) (i) As used in this chapter, "registrant" means an individual who is registered:
        (1) to engage in origination activities under this chapter; or
        (2) as a principal manager.
    (k) (j) As used in this chapter, "ultimate equitable owner" means a person who, directly or indirectly, owns or controls ten percent (10%) or more of the equity interest in a loan broker licensed or required to be licensed under this chapter, regardless of whether the person owns or controls the equity interest through one (1) or more other persons or one (1) or more proxies, powers of attorney, or variances.
    (l) (k) As used in this chapter, "principal manager" means an individual who:
        (1) has at least three (3) years of experience:
            (A) as a loan broker; or
            (B) in financial services;
        that is acceptable to the commissioner; and
        (2) is principally responsible for the supervision and management of the employees and business affairs of a licensee.
    (l) As used in this chapter, "personal information" includes any of the following:
        (1) An individual's first and last names or first initial and last name.
        (2) Any of the following data elements:
            (A) A Social Security number.
            (B) A driver's license number.
            (C) A state identification card number.
            (D) A credit card number.
            (E) A financial account number or debit card number in combination with a security code, password, or access code that would permit access to the person's account.
        (3) With respect to an individual, any of the following:
            (A) Address.
            (B) Telephone number.
            (C) Information concerning the individual's:
                (i) income or other compensation;
                (ii) credit history;
                (iii) credit score;
                (iv) assets;
                (v) liabilities; or
                (vi) employment history.
    (m) As used in this chapter, personal information is "encrypted"

if the personal information:
        (1) has been transformed through the use of an algorithmic process into a form in which there is a low probability of assigning meaning without use of a confidential process or key; or
        (2) is secured by another method that renders the personal information unreadable or unusable.
    (n) As used in this chapter, personal information is "redacted" if the personal information has been altered or truncated so that not more than the last four (4) digits of:
        (1) a Social Security number;
        (2) a driver's license number;
        (3) a state identification number; or
        (4) an account number;
are accessible as part of the personal information.

SOURCE: IC 23-2-5-4; (08)ES0089.1.14. -->     SECTION 14. IC 23-2-5-4, AS AMENDED BY P.L.230-2007, SECTION 7, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 4. (a) A person may not engage in the loan brokerage business in Indiana unless the person first obtains a license from the commissioner. Any person desiring to engage or continue in the loan brokerage business shall apply to the commissioner for a license under this chapter.
    (b) An individual may not perform origination activities in Indiana on behalf of a person licensed or required to be licensed under this chapter unless the individual first obtains a certificate of registration from the commissioner. An individual desiring to be employed by a licensee to engage in origination activities on behalf of a person licensed or required to be licensed under this chapter shall apply to the commissioner for registration under this chapter.
    (c) An individual may not act as a principal manager on behalf of a person licensed or required to be licensed under this chapter unless the individual first obtains a certificate of registration from the commissioner. Any individual desiring to be employed by a licensee act as a principal manager on behalf of a person licensed or required to be licensed under this chapter shall apply to the commissioner for registration under this chapter.
     (d) The commissioner may request evidence of compliance with this section at any of the following times:
        (1) The time of application for an initial:
            (A) license; or
            (B) certificate of registration.
        (2) The time of renewal of a license or certificate of

registration.
        (3) Any other time considered necessary by the commissioner.
    (e) For purposes of subsection (d), evidence of compliance with this section shall include a criminal background check, including a national criminal history background check (as defined in IC 10-13-3-12) by the Federal Bureau of Investigation.

SOURCE: IC 23-2-5-5; (08)ES0089.1.15. -->     SECTION 15. IC 23-2-5-5, AS AMENDED BY P.L.230-2007, SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 5. (a) An application for license or renewal of a license must contain:
        (1) consent to service of process under subsection (h);
        (2) evidence of the bond required in subsection (e);
        (3) an application fee of four hundred dollars ($400), plus two hundred dollars ($200) for each ultimate equitable owner;
        (4) an affidavit affirming that none of the applicant's ultimate equitable owners, directors, managers, or officers have been convicted, in any jurisdiction, of an offense involving fraud or deception that is punishable by at least one (1) year of imprisonment, unless waived by the commissioner under subsection (f); (i);
        (5) evidence that the applicant, if the applicant is an individual, has completed the education requirements under section 21 of this chapter;
        (6) the name and registration number for each originator to be employed by the licensee;
        (7) the name and registration number for each principal manager; and
        (8) for each ultimate equitable owner, the following information:
            (1) (A) The name of the ultimate equitable owner.
            (2) (B) The address of the ultimate equitable owner, including the home address of the ultimate equitable owner if the ultimate equitable owner is an individual.
            (3) (C) The telephone number of the ultimate equitable owner, including the home telephone number if the ultimate equitable owner is an individual.
            (4) (D) The ultimate equitable owner's Social Security number and date of birth, if the ultimate equitable owner is an individual.
    (b) An application for registration as an originator shall be made on a registration form prescribed by the commissioner. The application must include the following information for the individual that seeks to be registered as an originator:
        (1) The name of the individual.
        (2) The home address of the individual.
        (3) The home telephone number of the individual.
        (4) The individual's Social Security number and date of birth.
        (5) The name of the:
            (A) licensee; or
            (B) applicant for licensure;
        for whom the individual seeks to be employed as an originator.
        (6) Consent to service of process under subsection (h).
        (7) Evidence that the individual has completed the education requirements described in section 21 of this chapter.
        (8) An application fee of one hundred dollars ($100).
        (9) All registration numbers previously issued to the individual under this chapter, if applicable.
    (c) An application for registration as a principal manager shall be made on a registration form prescribed by the commissioner. The application must include the following information for the individual who seeks to be registered as a principal manager:
        (1) The name of the individual.
        (2) The home address of the individual.
        (3) The home telephone number of the individual.
        (4) The individual's Social Security number and date of birth.
        (5) The name of the:
            (A) licensee; or
            (B) applicant for licensure;
        for whom the individual seeks to be employed as a principal manager.
        (6) Consent to service of process under subsection (h).
        (7) Evidence that the individual has completed the education requirements described in section 21 of this chapter.
        (8) Evidence that the individual has at least three (3) years of experience in the:
            (A) loan brokerage; or
            (B) financial services;
        business.
        (9) An application fee of two hundred dollars ($200).
        (10) All registration numbers previously issued to the individual, if applicable.
    (d) The commissioner shall require an applicant for registration as:
        (1) an originator under subsection (b); or
        (2) a principal manager under subsection (c);
to pass a written examination prepared and administered by the

commissioner or an agent appointed by the commissioner.
    (e) A licensee must maintain a bond satisfactory to the commissioner in the amount of fifty one hundred thousand dollars ($50,000), ($100,000), which shall be in favor of the state and shall secure payment of damages to any person aggrieved by any violation of this chapter by the licensee.
    (f) The commissioner shall issue a license and license number to an applicant that meets the licensure requirements of this chapter. Whenever the registration provisions of this chapter have been complied with, the commissioner shall issue a certificate of registration and registration number authorizing the registrant to:
        (1) engage in origination activities; or
        (2) act as a principal manager;
whichever applies.
    (g) Licenses and initial certificates of registration issued by the commissioner are valid until January 1 of the second year after issuance.
    (h) Every applicant for licensure or registration or for renewal of a license or a registration shall file with the commissioner, in such form as the commissioner by rule or order prescribes, an irrevocable consent appointing the secretary of state to be the applicant's agent to receive service of any lawful process in any noncriminal suit, action, or proceeding against the applicant arising from the violation of any provision of this chapter. Service shall be made in accordance with the Indiana Rules of Trial Procedure.
    (i) Upon good cause shown, the commissioner may waive the requirements of subsection (a)(4) for one (1) or more of an applicant's ultimate equitable owners, directors, managers, or officers.
    (j) Whenever an initial or a renewal application for a license or registration is denied or withdrawn, the commissioner shall retain the initial or renewal application fee paid.
    (k) The commissioner shall require each:
        (1) equitable owner; and
         (2) individual described in subsection (a)(4); and
        (2) (3) applicant for registration as:
            (A) an originator; or
            (B) a principal manager;
to undergo submit fingerprints for a national criminal history background check at the expense of the (as defined in IC 10-13-3-12) by the Federal Bureau of Investigation, for use by the commissioner in determining whether the equitable owner, the individual described in subsection (a)(4), or the applicant should be

denied licensure or registration under this chapter for any reason set forth in section 10(c) of this chapter. The equitable owner, individual described in subsection (a)(4), or applicant shall pay any fees or costs associated with the fingerprints and background check required under this subsection. The commissioner may not release the results of a background check described in this subsection to any private entity.
    (l) The commissioner may check the qualifications, background, licensing status, and service history of each:
        (1) equitable owner; and
         (2) individual described in subsection (a)(4); and
        (2) (3) applicant for registration as:
            (A) an originator; or
            (B) a principal manager;
by accessing, upon availability, a multistate automated licensing system for mortgage brokers and originators, including the National Mortgage Licensing Database proposed by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators. and repository described in section 11(a)(16) of this chapter. The equitable owner, the individual described in subsection (a)(4), or the applicant shall pay any fees or costs associated with a check conducted under this subsection.

SOURCE: IC 23-2-5-6; (08)ES0089.1.16. -->     SECTION 16. IC 23-2-5-6 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 6. A licensee may not continue engaging in the loan brokerage business unless the licensee's license is renewed biennially. A registrant may not continue:
         (1) engaging in origination activities; or
        (2) acting as a principal manager;
unless the registrant's certificate of registration is renewed biennially. A licensee shall renew its license and the certificates of registration of its registrant employees by filing with the commissioner, at least thirty (30) days before the expiration of the registration, license, an application containing any information the commissioner may require to indicate any material change from the information contained in the applicant's original application or any previous application. A registrant may renew the registrant's certificate of registration by filing with the commissioner, at least thirty (30) days before the expiration of the registration, an application containing any information the commissioner may require to indicate any material change from the information contained in the applicant's original application or any previous application.
SOURCE: IC 23-2-5-10; (08)ES0089.1.17. -->     SECTION 17. IC 23-2-5-10, AS AMENDED BY P.L.230-2007,

SECTION 11, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 10. (a) Whenever it appears to the commissioner that a person has engaged in or is about to engage in an act or a practice constituting a violation of this chapter or a rule or an order under this chapter, the commissioner may investigate and may issue, with a prior hearing if there exists no substantial threat of immediate irreparable harm or without a prior hearing, if there exists a substantial threat of immediate irreparable harm, orders and notices as the commissioner determines to be in the public interest, including cease and desist orders, orders to show cause, and notices. After notice and hearing, the commissioner may enter an order of rescission, restitution, or disgorgement, including interest at the rate of eight percent (8%) per year, directed to a person who has violated this chapter or a rule or order under this chapter.
    (b) Upon the issuance of an order or notice without a prior hearing by the commissioner under subsection (a), the commissioner shall promptly notify the respondent and, if the subject of the order or notice is a registrant, the licensee for whom the registrant is employed:
        (1) that the order or notice has been issued;
        (2) of the reasons the order or notice has been issued; and
        (3) that upon the receipt of a written request the matter will be set down for a hearing to commence within fifteen (15) business days after receipt of the request unless the respondent consents to a later date.
If a hearing is not requested and not ordered by the commissioner, an order remains in effect until it is modified or vacated by the commissioner. If a hearing is requested or ordered, the commissioner, after notice of an opportunity for hearing, may modify or vacate the order or extend it until final determination.
    (c) The commissioner may deny an application for an initial or a renewal license or registration, and may suspend or revoke the license of a licensee or the registration of a registrant if the applicant, the licensee, the registrant, or an ultimate equitable owner of an applicant or of a licensee:
        (1) fails to maintain the bond required under section 5 of this chapter;
        (2) has, within the most recent ten (10) years:
            (A) been the subject of an adjudication or a determination by:
                (i) a court with jurisdiction; or
                (ii) an agency or administrator that regulates securities, commodities, banking, financial services, insurance, real estate, or the real estate appraisal industry;

            in Indiana or in any other jurisdiction; and
            (B) been found, after notice and opportunity for hearing, to have violated the securities, commodities, banking, financial services, insurance, real estate, or real estate appraisal laws of Indiana or any other jurisdiction;
        (3) has:
            (A) been denied the right to do business in the securities, commodities, banking, financial services, insurance, real estate, or real estate appraisal industry; or
            (B) had the person's authority to do business in the securities, commodities, banking, financial services, insurance, real estate, or real estate appraisal industry revoked or suspended;
        by Indiana or by any other state, federal, or foreign governmental agency or self regulatory organization;
        (4) is insolvent;
        (5) has violated any provision of this chapter;
        (6) has knowingly filed with the commissioner any document or statement that:
            (A) contains a false representation of a material fact;
            (B) fails to state a material fact; or
            (C) contains a representation that becomes false after the filing but during the term of a license or certificate of registration as provided in subsection (i);
        (7) has:
            (A) been convicted, within ten (10) years before the date of the application, renewal, or review, of any crime involving fraud or deceit; or
            (B) had a felony conviction (as defined in IC 35-50-2-1(b)) within five (5) years before the date of the application, renewal, or review;
        (8) if the person is a licensee or principal manager, has failed to reasonably supervise the person's originators or employees to ensure their compliance with this chapter;
        (9) is on the most recent tax warrant list supplied to the commissioner by the department of state revenue; or
        (10) has engaged in dishonest or unethical practices in the loan broker business, as determined by the commissioner.
    (d) The commissioner may do either of the following:
        (1) Censure:
            (A) a licensee;
            (B) an officer, a director, or an ultimate equitable owner of a licensee;
            (C) a registrant; or
            (D) any other person;
        who violates or causes a violation of this chapter.
        (2) Permanently bar any person described in subdivision (1) from being:
            (A) licensed or registered under this chapter; or
            (B) employed by or affiliated with a person licensed or registered under this chapter;
        if the person violates or causes a violation of this chapter.
    (e) The commissioner may not enter a final order:
        (1) denying, suspending, or revoking the license of a licensee or the registration of a registrant; or
        (2) imposing other sanctions;
without prior notice to all interested parties, opportunity for a hearing, and written findings of fact and conclusions of law. However, the commissioner may by summary order deny, suspend, or revoke a license or certificate of registration pending final determination of any proceeding under this section or before any proceeding is initiated under this section. Upon the entry of a summary order, the commissioner shall promptly notify all interested parties that the summary order has been entered, of the reasons for the summary order, and that upon receipt by the commissioner of a written request from a party, the matter will be set for hearing to commence within fifteen (15) business days after receipt of the request. If no hearing is requested and none is ordered by the commissioner, the order remains in effect until it is modified or vacated by the commissioner. If a hearing is requested or ordered, the commissioner, after notice of the hearing has been given to all interested persons and the hearing has been held, may modify or vacate the order or extend it until final determination.
    (f) IC 4-21.5 does not apply to a proceeding under this section.
    (g) If a registrant seeks to transfer the registrant's registration to another licensee who desires to have the registrant engage in origination activities or serve as a principal manager, whichever applies, the registrant shall, before the registrant conducts origination activities or serves as a principal manager for the new employer, submit to the commissioner, on a form prescribed by the commissioner, a registration application, as required by section 5 of this chapter.
    (h) If the employment of a registrant is terminated, whether:
        (1) voluntarily by the registrant; or
        (2) by the licensee employing the registrant;
the licensee that employed the registrant shall, not later than five (5)

days after the termination, notify the commissioner of the termination and the reasons for the termination.
    (i) If a material fact or statement included in an application under this chapter changes after the application has been submitted, the applicant shall provide written notice to the commissioner of the change. The commissioner may revoke or refuse to renew the license or registration of any person who:
        (1) is required to submit a written notice under this subsection and fails to provide the required notice within two (2) business days after the person discovers or should have discovered the change; or
        (2) would not qualify for licensure or registration under this chapter as a result of the change in a material fact or statement.

SOURCE: IC 23-2-5-11; (08)ES0089.1.18. -->     SECTION 18. IC 23-2-5-11, AS AMENDED BY P.L.48-2006, SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 11. (a) The commissioner may do the following:
        (1) Adopt rules under IC 4-22-2 to implement this chapter.
        (2) Make investigations and examinations:
            (A) in connection with any application for licensure or for registration of a licensee or registrant or with any license or certificate of registration already granted; or
            (B) whenever it appears to the commissioner, upon the basis of a complaint or information, that reasonable grounds exist for the belief that an investigation or examination is necessary or advisable for the more complete protection of the interests of the public.
        (3) Charge as costs of investigation or examination all reasonable expenses, including a per diem prorated upon the salary of the commissioner or employee and actual traveling and hotel expenses. All reasonable expenses are to be paid by the party or parties under investigation or examination if the party has violated this chapter.
        (4) Issue notices and orders, including cease and desist notices and orders, after making an investigation or examination under subdivision (2). The commissioner may also bring an action on behalf of the state to enjoin a person from violating this chapter. The commissioner shall notify the person that an order or notice has been issued, the reasons for it, and that a hearing will be set within fifteen (15) days after the commissioner receives a written request from the person requesting a hearing.
        (5) Sign all orders, official certifications, documents, or papers issued under this chapter or delegate the authority to sign any of

those items to a deputy.
        (6) Hold and conduct hearings.
        (7) Hear evidence.
        (8) Conduct inquiries with or without hearings.
        (9) Receive reports of investigators or other officers or employees of the state of Indiana or of any municipal corporation or governmental subdivision within the state.
        (10) Administer oaths, or cause them to be administered.
        (11) Subpoena witnesses, and compel them to attend and testify.
        (12) Compel the production of books, records, and other documents.
        (13) Order depositions to be taken of any witness residing within or without the state. The depositions shall be taken in the manner prescribed by law for depositions in civil actions and made returnable to the commissioner.
        (14) Order that each witness appearing under the commissioner's order to testify before the commissioner shall receive the fees and mileage allowances provided for witnesses in civil cases.
        (15) Provide interpretive opinions or issue determinations that the commissioner will not institute a proceeding or an action under this chapter against a specified person for engaging in a specified act, practice, or course of business if the determination is consistent with this chapter. The commissioner may adopt rules to establish fees for individuals requesting an interpretive opinion or a determination under this subdivision. A person may not request an interpretive opinion or a determination concerning an activity that:
            (A) occurred before; or
            (B) is occurring on;
        the date the opinion or determination is requested.
         (16) Subject to subsection (f), designate a multistate automated licensing system and repository, established and operated by a third party, to serve as the sole entity responsible for:
            (A) processing applications for:
                (i) licenses and certificates of registration under this chapter; and
                (ii) renewals of licenses and certificates of registration under this chapter; and
            (B) performing other services that the commissioner determines are necessary for the orderly administration of the division's licensing and registration system.

        A multistate automated licensing system and repository described in this subdivision may include the National Mortgage Licensing System established by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators. The commissioner may take any action necessary to allow the division to participate in a multistate automated licensing system and repository.
    (b) If a witness, in any hearing, inquiry, or investigation conducted under this chapter, refuses to answer any question or produce any item, the commissioner may file a written petition with the circuit or superior court in the county where the hearing, investigation, or inquiry in question is being conducted requesting a hearing on the refusal. The court shall hold a hearing to determine if the witness may refuse to answer the question or produce the item. If the court determines that the witness, based upon the witness's privilege against self-incrimination, may properly refuse to answer or produce an item, the commissioner may make a written request that the court grant use immunity to the witness. Upon written request of the commissioner, the court shall grant use immunity to a witness. The court shall instruct the witness, by written order or in open court, that:
        (1) any evidence the witness gives, or evidence derived from that evidence, may not be used in any criminal proceedings against that witness, unless the evidence is volunteered by the witness or is not responsive to a question; and
        (2) the witness must answer the questions asked and produce the items requested.
A grant of use immunity does not prohibit evidence that the witness gives in a hearing, investigation, or inquiry from being used in a prosecution for perjury under IC 35-44-2-1. If a witness refuses to give the evidence after the witness has been granted use immunity, the court may find the witness in contempt.
    (c) In any prosecution, action, suit, or proceeding based upon or arising out of this chapter, the commissioner may sign a certificate showing compliance or noncompliance with this chapter by any person. This shall constitute prima facie evidence of compliance or noncompliance with this chapter and shall be admissible in evidence in any action at law or in equity to enforce this chapter.
    (d) If:
        (1) a person disobeys any lawful:
            (A) subpoena issued under this chapter; or
            (B) order or demand requiring the production of any books, accounts, papers, records, documents, or other evidence or

information as provided in this chapter; or
        (2) a witness refuses to:
            (A) appear when subpoenaed;
            (B) testify to any matter about which the witness may be lawfully interrogated; or
            (C) take or subscribe to any oath required by this chapter;
the circuit or superior court of the county in which the hearing, inquiry, or investigation in question is held, if demand is made or if, upon written petition, the production is ordered to be made, or the commissioner or a hearing officer appointed by the commissioner, shall compel compliance with the lawful requirements of the subpoena, order, or demand, compel the production of the necessary or required books, papers, records, documents, and other evidence and information, and compel any witness to attend in any Indiana county and to testify to any matter about which the witness may lawfully be interrogated, and to take or subscribe to any oath required.
    (e) If a person fails, refuses, or neglects to comply with a court order under this section, the person shall be punished for contempt of court.
     (f) The commissioner's authority to designate a multistate automated licensing system and repository under subsection (a)(16) is subject to the following:
        (1) The commissioner may not require any person exempt from licensure or registration under this chapter, or any employee or agent of an exempt person, to:
            (A) submit information to; or
            (B) participate in;
        the multistate automated licensing system and repository.
        (2) The commissioner may require a person required under this chapter to submit information to the multistate automated licensing system and repository to pay a processing fee considered reasonable by the commissioner.

SOURCE: IC 23-2-5-18; (08)ES0089.1.19. -->     SECTION 19. IC 23-2-5-18 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 18. (a) Each loan broker agreement shall be given an account number. Each licensee person licensed or required to be licensed under this chapter shall keep and maintain the following records or their electronic equivalent:
        (1) A file for each borrower or proposed borrower that contains the following:
            (A) The name and address of the borrower or any proposed borrower.
            (B) A copy of the signed loan broker agreement.
            (C) A copy of any other papers or instruments used in

connection with the loan broker agreement and signed by the borrower or any proposed borrower.
            (D) If a loan was obtained for the borrower, the name and address of the creditor.
            (E) If a loan is accepted by the borrower, a copy of the loan agreement.
            (F) The amount of the loan broker's fee that the borrower has paid. If there is an unpaid balance, the status of any collection efforts.
        (2) All receipts from or for the account of borrowers or any proposed borrowers and all disbursements to or for the account of borrowers or any proposed borrowers, recorded so that the transactions are readily identifiable.
        (3) A general ledger that shall be posted at least monthly, and a trial balance sheet and profit and loss statement prepared within thirty (30) days of the commissioner's request for the information.
        (4) A sample of:
            (A) all advertisements, pamphlets, circulars, letters, articles, or communications published in any newspaper, magazine, or periodical;
            (B) scripts of any recording, radio, or television announcement; and
            (C) any sales kits or literature;
        to be used in solicitation of borrowers.
    (b) The records listed in subsection (a) shall be kept for a period of two (2) years in the licensee's loan broker's principal office and must be separate or readily identifiable from the records of any other business that is conducted in the office of the loan broker.
     (c) If a breach of the security of any records:
        (1) maintained by a loan broker under this section; and
        (2) containing the unencrypted, unredacted personal information of one (1) or more borrowers or prospective borrowers;
occurs, the loan broker is subject to the disclosure requirements under IC 24-4.9-3, unless the loan broker is exempt from the disclosure requirements under IC 24-4.9-3-4.
    (d) A person who is:
        (1) licensed or required to be licensed under this chapter; or
        (2) registered or required to be registered under this chapter;
may not dispose of the unencrypted, unredacted personal information of one (1) or more borrowers or prospective borrowers without first shredding, incinerating, mutilating,

erasing, or otherwise rendering the information illegible or unusable.

SOURCE: IC 23-2-5-19; (08)ES0089.1.20. -->     SECTION 20. IC 23-2-5-19, AS AMENDED BY P.L.230-2007, SECTION 15, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 19. (a) The following persons are exempt from the requirements of sections 4, 5, 6, 9, 17, 18, and 21 of this chapter:
        (1) Any attorney while engaging in the practice of law.
        (2) Any certified public accountant, public accountant, or accountant practitioner holding a certificate or registered under IC 25-2.1 while performing the practice of accountancy (as defined by IC 25-2.1-1-10).
        (3) Any person licensed as a real estate broker or salesperson under IC 25-34.1 to the extent that the person is rendering loan related services in the ordinary course of a transaction in which a license as a real estate broker or salesperson is required.
        (4) (3) Any broker-dealer, agent, or investment advisor registered under IC 23-19.
        (5) (4) Any person that:
            (A) procures;
            (B) promises to procure; or
            (C) assists in procuring;
        a loan that is not subject to the Truth in Lending Act (15 U.S.C. 1601 through 1667e).
        (6) (5) Any community development corporation (as defined in IC 4-4-28-2) acting as a subrecipient of funds from the Indiana housing and community development authority established by IC 5-20-1-3.
        (7) (6) The Indiana housing and community development authority.
        (8) Subject to subsection (e), and except as provided in subsection (f), any person authorized to:
            (A) sell and service a loan for