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.
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.
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;
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.
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.
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.".
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).
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.
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.
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.
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;
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.
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.
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.
person closes at least twenty-five (25) such insured loans in
Indiana during each calendar year
(9) Any person who is a creditor, or proposed to be a creditor, for
any loan.
(b) As used in this chapter, "bona fide third party fee" includes fees
for the following:
(1) Credit reports, investigations, and appraisals performed by a
person who holds a license or certificate as a real estate appraiser
under IC 25-34.1-8.
(2) If the loan is to be secured by real property, title examinations,
an abstract of title, title insurance, a property survey, and similar
purposes.
(3) The services provided by a loan broker in procuring possible
business for a lending institution if the fees are paid by the
lending institution.
(c) As used in this section, "successful procurement of a loan"
means that a binding commitment from a creditor to advance money
has been received and accepted by the borrower.
(d) The burden of proof of any exemption or classification provided
in this chapter is on the party claiming the exemption or classification.
(e) A person claiming an exemption under subsection (a)(8) shall,
as a condition to receiving or maintaining the exemption, file a notice
every twenty-four (24) months on a form acceptable to the
commissioner. The notice required under this subsection must:
(1) provide the name and business address of each originator
employed by the person to originate loans in Indiana;
(2) include all other information required by the commissioner;
and
(3) be accompanied by a fee of four hundred dollars ($400),
If any information included in a notice under this subsection changes
after the notice has been submitted, the person shall provide written
notice to the commissioner of the change. The commissioner's receipt
of a notice under this subsection shall not be considered to be a
determination or confirmation by the commissioner of the validity of
the claimed exemption.
(f) An exemption described in subsection (a)(8) does not extend to:
(1) a subsidiary of the exempt person; or
(2) an unaffiliated third party.
An exemption that applies to a person under subsection (a)(8)(D) does
not extend to a registered United States Department of Veterans Affairs
agent.
FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 20. (a) A person shall
not, in connection with a contract for the services of a loan broker,
either directly or indirectly, do any of the following:
(1) Employ any device, scheme, or artifice to defraud.
(2) Make any untrue statements of a material fact or omit to state
a material fact necessary in order to make the statements made, in
the light of circumstances under which they are made, not
misleading.
(3) Engage in any act, practice, or course of business that operates
or would operate as a fraud or deceit upon any person.
(4) Collect or solicit any consideration, except a bona fide third
party fee, in connection with a loan until the loan has been closed.
(5) Receive any funds if the person knows that the funds were
generated as a result of a fraudulent act.
(6) File or cause to be filed with a county recorder any
document that the person knows:
(A) contains:
(i) a misstatement; or
(ii) an untrue statement;
of a material fact; or
(B) omits a statement of a material fact that is necessary to
make the statements that are made, in the light of
circumstances under which they are made, not misleading.
(7) Knowingly release or disclose the unencrypted, unredacted
personal information of one (1) or more borrowers or
prospective borrowers, unless the personal information is:
(A) included as part of:
(i) an application form; or
(ii) a document that is used in connection with an
application process or an enrollment process;
(B) used to obtain a consumer report (as defined in
IC 24-5-24-2) for an applicant for credit; or
(C) used to establish, amend, or terminate an account, a
contract, or a policy, or to confirm the accuracy of the
personal information.
However, personal information allowed to be disclosed under
this subdivision may not be printed in whole or in part on a
postcard or other mailer that does not require an envelope, or
in a manner that makes the personal information visible on an
envelope or a mailer without the envelope or mailer being
opened.
(8) Engage in any reckless or negligent activity allowing the
release or disclosure of the unencrypted, unredacted personal
information of one (1) or more borrowers or prospective
borrowers. An activity described in this subdivision includes
an action prohibited by section 18(d) of this chapter.
(9) Recommend a loan to, or procure a loan on behalf of, a
prospective borrower without first conducting a reasonable
inquiry concerning the prospective borrower's ability to
repay the loan. For purposes of this subdivision, a person
conducts a reasonable inquiry concerning a borrower's ability
to repay a loan if the person:
(A) obtains a consumer report (as defined in IC 24-5-24-2)
or other information maintained by a consumer reporting
agency (as defined in IC 24-5-24-3) with respect to the
prospective borrower; and
(B) obtains information about the prospective borrower
through:
(i) a current or past employer of the prospective
borrower;
(ii) public records; or
(ii) any other legal or commercially reasonable means.
(b) A person who commits an act described in subsection (a) is
subject to sections 10, 14, 15, and 16 of this chapter.
commissioner shall be served with:
(1) a written notice of the appeal stating the court to which the
appeal will be taken and the grounds upon which a reversal of the
final order is sought;
(2) a demand in writing from the appellant for a certified
transcript of the record and of all papers on file in the
commissioner's office affecting or relating to the order; and
(3) a bond in the penal sum of five hundred dollars ($500) to the
state of Indiana with sufficient surety to be approved by the
commissioner, conditioned upon the faithful prosecution of the
appeal to final judgment and the payment of all costs that are
adjudged against the appellant.
(c) Not later than ten (10) days after the commissioner is served
with the items listed in subsection (b), the commissioner shall make,
certify, and deliver to the appellant the transcript, and the appellant
shall, not later than five (5) days after the date the appellant receives
the transcript, file the transcript and a copy of the notice of appeal with
the clerk of the court. The notice of appeal serves as the appellant's
complaint. The commissioner may appear and file any motion or
pleading and form the issue. The cause shall be entered on the trial
calendar for trial de novo and given precedence over all matters
pending in the court.
(d) The court shall receive and consider any pertinent oral or written
evidence concerning the order of the commissioner from which the
appeal is taken. If the order of the commissioner is reversed, the court
shall in its mandate specifically direct the commissioner as to the
commissioner's further action in the matter. The commissioner is not
barred from revoking or altering the order for any proper cause that
accrues or is discovered after the order is entered. If the order is
affirmed, the appellant is not barred after thirty (30) days from the date
the order is affirmed from filing a new application if the application is
not otherwise barred or limited. During the pendency of the appeal, the
order from which the appeal is taken is not suspended but remains in
effect unless otherwise ordered by the court. An appeal may be taken
from the judgment of the court on the same terms and conditions as an
appeal is taken in civil actions.
First Lien Mortgage Lending Act.
Sec. 102. (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 permit and encourage the development of fair and
economically sound first lien mortgage lending practices; and
(b) to conform the regulation of first lien mortgage lending
practices to applicable state and federal laws, rules, and
regulations.
(3) A reference to a requirement imposed by this article includes
reference to a related rule of the department adopted under this
article.
(4) A reference to a federal law in this article is a reference to
the law in effect December 31, 2008.
Sec. 103. This article:
(1) is a general act intended as a unified coverage of its subject
matter; and
(2) any part of this article may not be considered to be
impliedly repealed by subsequent legislation if such
construction can reasonably be avoided.
Sec. 104. The provisions of this article are severable, so that if:
(1) any provisions of this article; or
(2) the application of this article to any person or
circumstances;
is held invalid, the invalidity does not affect other provisions or
applications of this article that can be given effect without the
invalid provision or application.
Sec. 201. (1) Except as provided in subsection (2), this article
applies to a first lien mortgage transaction:
(a) that is secured by an interest in land in Indiana; and
(b) the closing for which takes place after December 31, 2008.
(2) This article does not apply to a first lien mortgage
transaction if:
(a) the debtor is not a resident of Indiana at the time the
transaction is entered into; and
(b) the laws of the debtor's state of residence requires that the
transaction be made under the laws of the state of the debtor's
residence.
Sec. 202. This article does not apply to the following:
(1) Extensions of credit to government or governmental
agencies or instrumentalities.
(2) A first lien mortgage transaction in which the debt is
incurred primarily for a purpose other than a personal,
family, or household purpose
(3) An extension of credit primarily for a business, a
commercial, or an agricultural purpose.
(4) A first lien mortgage transaction made:
(a) in compliance with the requirements of; and
(b) by a 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.
(5) A supervised financial organization.
(6) An operating subsidiary that is majority owned, directly
or indirectly, by a supervised financial organization to the
extent the operating subsidiary is regulated by the chartering
authority of the supervised financial organization.
(7) A credit union service organization that is majority owned,
directly or indirectly, by one (1) or more credit unions.
(8) Agencies, instrumentalities, and government owned
corporations of the United States, including United States
government sponsored enterprises.
Sec. 203. Any civil court in Indiana may exercise jurisdiction
over any creditor with respect to any conduct in Indiana governed
by this article or with respect to any claim arising from a
transaction subject to this article. In addition to any other method
provided by rule or by statute, personal jurisdiction over a creditor
may be acquired in a civil action or proceeding instituted in any
civil court by the service of process.
Sec. 301. In addition to definitions appearing in subsequent
chapters of this article, the following definitions apply throughout
this article:
(1) "Credit" means the right granted by a creditor to a debtor
to defer payment of debt or to incur debt and defer its
payment.
(2) "Creditor" means a person:
(a) that regularly engages in the extension of first lien
mortgage transactions that are subject to a credit service
charge or loan finance charge, as applicable, or are
payable by written agreement in more than four (4)
installments (not including a down payment); and
(b) to which the obligation is initially payable, either on the
face of the note or contract, or by agreement if there is not
a note or contract.
forth in subdivision (a) in the preceding calendar year, but
has or will meet the numerical standards set forth in
subdivision (a) in the current calendar year.
(11) "Revolving first lien mortgage transaction" means an
arrangement between a creditor and a debtor in which:
(a) the creditor permits the debtor to obtain advances from
time to time;
(b) the unpaid balances of principal, credit service charges
or loan finance charges, and other appropriate charges are
debited to an account; and
(c) the debtor has the privilege of paying the balances in
installments.
(12) "Supervised financial organization" means a person that
is:
(a) organized, chartered, or holding an authorization
certificate under the laws of a state or of the United States
which authorizes the person to make loans and to receive
deposits, including deposits into a savings, share,
certificate, or deposit account; and
(b) subject to supervision by an official or agency of a state
or of the United States.
(13) "Tablefunded" means a transaction in which:
(a) a person closes a first lien mortgage transaction in the
person's own name as a mortgagee with funds provided by
one (1) or more other persons; and
(b) the transaction is assigned simultaneously to the
mortgage creditor providing the funding not later than one
(1) business day after the funding of the transaction.
Chapter 2. Miscellaneous
Sec. 101. This chapter shall be known and may be cited as the
First Lien Mortgage Lending Act - Miscellaneous.
Sec. 201. (1) A creditor or mortgage servicer shall provide an
accurate payoff amount for a first lien mortgage transaction to the
debtor not later than ten (10) calendar days after the creditor or
mortgage servicer receives the debtor's written request for the
accurate payoff amount. A creditor or mortgage servicer who fails
to provide an accurate payoff amount is liable for:
(a) one hundred dollars ($100) if an accurate payoff amount
is not provided by the creditor or mortgage servicer not later
than ten (10) calendar days after the creditor or mortgage
servicer receives the debtor's first written request; and
(b) the greater of:
(i) one hundred dollars ($100); or
(ii) the loan finance charge that accrues on the first lien
mortgage transaction from the date the creditor or
mortgage servicer receives the first written request until
the date on which the accurate payoff amount is provided;
if an accurate payoff amount is not provided by the creditor
or mortgage servicer not later than ten (10) calendar days
after the creditor or mortgage servicer receives the debtor's
second written request, and the creditor or mortgage servicer
fails to comply with subdivision (a).
(2) This subsection applies to a first lien mortgage transaction
with respect to which any installment or minimum payment due is
delinquent for at least ten (10) days. The creditor, servicer, or the
creditor's agent shall acknowledge a written offer made in
connection with a proposed short sale not later than ten (10)
business days after the date of the offer if the offer complies with
the requirements for a qualified written request set forth in 12
U.S.C. 2605(e)(1)(B). The creditor, servicer, or creditor's agent is
required to acknowledge a written offer made in connection with
a proposed short sale from a third party acting on behalf of the
debtor only if the debtor has provided written authorization for the
creditor, servicer, or creditor's agent to do so. Not later than
twenty (20) business days after receipt of an offer under this
subsection, the creditor, servicer, or creditor's agent shall respond
to the offer with an acceptance or a rejection of the offer. As used
in this subsection, "short sale" means a transaction in which the
property that is the subject of a first lien mortgage transaction is
sold for an amount that is less than the amount of the debtor's
outstanding obligation under the first lien mortgage transaction.
A creditor or mortgage servicer that fails to respond to an offer
within the time prescribed by this subsection is liable:
(a) under the terms set forth in subsection (1), as if the
creditor or mortgage servicer had failed to provide a first lien
mortgage transaction payoff amount; and
(b) in accordance with 12 U.S.C. 2605(f) in any action brought
under that section.
Sec. 301. (1) A violation of a state or federal law, regulation, or
rule applicable to first lien mortgage transactions is a violation of
this article.
(2) The department may enforce penalty provisions set forth in
15 U.S.C. 1640 for violations of disclosure requirements applicable
to first lien mortgage transactions.
Sec. 401. Unless a person subject to this article has first obtained
a license from the department, the person shall not regularly
engage in Indiana as a creditor in first lien mortgage transactions.
However, this article does not require an employee of a person that
is licensed under this article to obtain a license to make a first lien
mortgage loan.
Sec. 402. (1) The department shall receive and act on all
applications for licenses to engage in first lien mortgage
transactions. Applications must be made as prescribed by the
director.
(2) A license may not be issued unless the department finds that
the financial responsibility, character, and fitness of:
(a) the applicant and
any significant affiliate of the applicant;
(b) each executive officer, director, or manager of the
applicant, or any other individual having a similar status or
performing a similar function for the applicant; and
(c) if known, each person directly or indirectly owning of
record or owning beneficially at least ten percent (10%) of the
outstanding shares of any class of equity security of the
applicant;
are such as to warrant belief that the business will be operated
honestly and fairly within the purposes of this article.
(3) 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.
(4) Evidence of compliance with this section may include:
(a) criminal background checks, including a national criminal
history background check (as defined in IC 10-13-3-12) by the
Federal Bureau of Investigation, for any individual described
in subsection (2);
(b) credit histories; and
(c) other background checks considered necessary by the
director.
If the director requests a national criminal history background
check under subdivision (a) for an individual described in
subsection (2), the director shall require the individual to submit
fingerprints to the department or to the state police department, as
appropriate, at the time evidence of compliance is requested under
subsection (3). The individual to whom the request is made shall
pay any fees or costs associated with the fingerprints and the
national criminal history background check. The national criminal
history background check may be used by the director to
determine the individual's compliance with this section. The
director or the department may not release the results of the
national criminal history background check to any private entity.
(5) 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.
(6) Upon written request, the applicant is entitled to a hearing
on the question of the qualifications of the applicant for a license
in the manner provided in IC 4-21.5.
(7) 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 annual renewal fee as established by the department
under IC 28-11-3-5.
(c) Examination fees as established by the department under
IC 28-11-3-5.
(8) 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 (7)(b) is delinquent.
(9) A 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 under this article.
(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.
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.
Sec. 403. (1) A license issued by the department authorizing a
person to engage in first lien mortgage transactions under this
article may be revoked by the department if the person fails to:
(a) file any renewal form required by the department; or
(b) pay any license renewal fee described under section 402 of
this chapter;
not later than sixty (60) days after the due date.
(2) A person whose license is revoked under this section may do
either of the following:
(a) Pay all delinquent fees and apply for a new license.
(b) Appeal the revocation to the department for an
administrative review under IC 4-21.5-3. Pending the decision
resulting from the hearing under IC 4-21.5-3 concerning the
license revocation, the license remains in force.
Sec. 404. (1) The department may issue to a person licensed to
engage in first lien mortgage transactions an order to show cause
why the person's license should not be revoked or suspended for a
period determined by the department. The order must state the
place and time for a meeting with the department that is not less
than ten (10) days from the date of the order. After the meeting,
the department shall revoke or suspend the license if the
department finds that:
(a) the licensee has repeatedly and willfully violated:
(i) this article or any rule or order lawfully adopted or
issued under this article; or
(ii) any other state or federal law, regulation, or rule
applicable to first lien mortgage transactions; or
(b) facts or conditions exist which would clearly have justified
the department in refusing to grant a license had the facts or
conditions been known to exist at the time the application for
the license was made.
(2) Except as provided in section 403 of this chapter, a
revocation or suspension of a license is not authorized under this
article unless before instituting proceedings to suspend or revoke
the license, the department gives notice to the licensee of the
conduct or facts that 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 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 notify the
licensee of the revocation or suspension. Not later than 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 engage in first lien mortgage
transactions may relinquish the license by notifying the
department in writing of the relinquishment. However, a
relinquishment under this paragraph does not affect the person's
liability for acts previously committed and coming within the scope
of this article.
(6) A revocation, suspension, or relinquishment of a license does
not impair or affect the obligation of any preexisting lawful
contract between:
(a) the person whose license has been revoked, suspended, or
relinquished; and
(b) 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 the director determines that, at the
time the determination is made, there is no fact or condition that
exists that clearly would justify 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 a 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.
Sec. 405. (1) Every licensee shall maintain records in a manner
that will enable the department to determine whether the licensee
is complying with this Article. The record keeping system of a
licensee is 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 the records are
located. Records concerning any first lien mortgage transaction
shall be retained for two (2) years after the making of the final
entry relating to the transaction, but in the case of a revolving first
lien mortgage transaction, the two (2) years required under this
subsection is measured from the date of each entry relating to the
transaction.
(2) A licensee shall file with the department financial statements
relating to all first lien mortgage transactions originated by the
licensee. The licensee shall file the financial statements as required
by the department, but not more frequently than annually, in the
form prescribed by the department.
(3) A licensee shall file notification with the department if the
licensee:
(a) has a change in name, address, or any of its 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) A licensee shall file notification with the department if a key
officer or director of the licensee:
(a) is under indictment for a felony 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 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.
Sec. 501. A creditor in a first lien mortgage transaction shall
comply with IC 6-1.1-12-43, to the extent applicable.
Sec. 502. (1) A violation by a creditor in a first lien mortgage
transaction of Section 125 of the Federal Consumer Credit
Protection Act (15 U.S.C. 1635) (concerning a debtor's right to
rescind a transaction) constitutes a violation of this article. A
creditor may not accrue interest during the period when a first lien
mortgage transaction may be rescinded under Section 125 of the
Federal Consumer Protection Act (15 U.S.C. 1635).
(2) A creditor must make available for disbursement the
proceeds of a transaction subject to subsection (1) on the later of:
(a) the date the creditor is reasonably satisfied that the debtor
has not rescinded the transaction; or
(b) the first business day after the expiration of the rescission
period under subsection (1).
Chapter 3. Administration
Sec. 101. This chapter shall be known and may be cited as the
First Lien Mortgage Lending Act - Administration.
Sec. 102. This chapter applies to a person that regularly engages
as a creditor in first lien mortgage transactions in Indiana.
Sec. 103. (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 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) Liability may not be 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 the fact that after the act is done or
omitted the rule, written notice, written opinion, written
interpretation, or written directive may be:
(a) amended or repealed; or
records where they are maintained. The department may designate
comparable officials of the state in which the records are located
to inspect the records on behalf of the department.
(4) Upon a person's failure without lawful excuse to obey a
subpoena or to give testimony and upon reasonable notice by the
department to all affected persons, the department may apply to
any civil court with jurisdiction for an order compelling
compliance.
(5) The department shall not make public:
(a) the name or identity of a person whose acts or conduct the
department investigates under this section; or
(b) the facts discovered in the investigation.
However, this subsection does not apply to civil actions or
enforcement proceedings under this article.
Sec. 105. Except as otherwise provided, IC 4-21.5-3 governs any
action taken by the department under this chapter or
IC 24-4.4-2-401 through IC 24-4.4-2-405. IC 4-22-2 applies to the
adoption of rules by the department under this article. However,
if the department determines that an emergency exists, the
department may adopt any rules authorized by this article under
IC 4-22-2-37.1.
Sec. 106. (1) After notice and hearing, the department may
order a creditor or a person acting on the creditor's behalf to cease
and desist from engaging in violations of this article. In any civil
court with jurisdiction:
(a) a respondent aggrieved by an order of the department
may obtain judicial review of the order; and
(b) the department may obtain an order of the court for the
enforcement of the department's order.
A proceeding for review or enforcement under this subsection shall
be initiated by the filing of a petition in the court. Copies of the
petition shall be served upon all parties of record.
(2) Not later than thirty (30) days after service of a petition for
review upon the department under subsection (1), or within such
further time as the court may allow, the department shall transmit
to the court the original or a certified copy of the entire record
upon which the order that is the subject of the review is based,
including any transcript of testimony, which need not be printed.
By stipulation of all parties to the review proceeding, the record
may be shortened. After conducting a hearing on the matter, the
court may:
(a) reverse or modify the order if the findings of fact of the
department are clearly erroneous in view of the reliable,
probative, and substantial evidence in the whole record;
(b) grant any temporary relief or restraining order the court
considers just; and
(c) enter an order:
(i) enforcing;
(ii) modifying;
(iii) enforcing as modified; or
(iv) setting aside;
in whole or in part, the order of the department; or
(d) enter an order remanding the case to the department for
further proceedings.
(3) An objection not urged at the hearing shall not be considered
by the court unless the failure to urge the objection is excused for
good cause shown. A party may move the court to remand the case
to the department in the interest of justice for the purpose of:
(a) adducing additional specified and material evidence; and
(b) seeking a finding upon such evidence;
upon good cause shown for the failure to previously adduce this
evidence before the department.
(4) The jurisdiction of the court is exclusive and the court's final
judgment or decree is subject to review on appeal in the same
manner and form and with the same effect as in appeals from a
final judgment or decree. The department's copy of the testimony
shall be available at reasonable times to all parties for examination
without cost.
(5) A proceeding for review under this section must be initiated
not later than thirty (30) days after a copy of the order of the
department is received. If a proceeding is not initiated within the
time set forth in this subsection, the department may obtain a
decree of a civil court with jurisdiction for enforcement of the
department's order upon a showing that:
(a) the order was issued in compliance with this section;
(b) a proceeding for review was not initiated within the thirty
(30) day period prescribed by this subsection; and
(c) the respondent is subject to the jurisdiction of the court.
(6) With respect to unconscionable agreements or fraudulent or
unconscionable conduct by a respondent, the department may not
issue an order under this section but may bring a civil action for an
injunction under section 111 of this chapter.
Sec. 107. If it is claimed that a person has engaged in conduct
subject to an order by:
course of fraudulent or unconscionable conduct.
(2) 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.
Sec. 112. In an action brought by the department under this
article, the defendant does not have a right to trial by a jury.
Sec. 113. The grant of powers to the department under this
article does not affect remedies available to debtors under this
article or under other principles of law or equity.
Sec. 114. The department may bring an action or a proceeding
in a court in a county:
(1) in which an act on which the action or proceeding is based
occurred;
(2) in which the respondent resides or transacts business; or
(3) in which the action or proceeding is otherwise authorized
by rule or venue laws.
Sec. 115. As used in this article, "civil court" means any court
in Indiana having jurisdiction of civil cases.
similar purposes, including surveys;
(b) fees for preparation of a deed, settlement statement, or other
documents;
(c) escrows for future payments of taxes and insurance;
(d) fees for notarizing deeds and other documents;
(e) appraisal fees; and
(f) credit reports.
(5) "Conspicuous": A term or clause is conspicuous when it is so
written that a reasonable person against whom it is to operate ought to
have noticed it.
(6) "Consumer credit" means credit offered or extended to a
consumer primarily for a personal, family, or household purpose.
(7) "Credit" means the right granted by a creditor to a debtor to
defer payment of debt or to incur debt and defer its payment.
(8) "Creditor" means a person:
(a) who regularly engages in the extension of consumer credit that
is subject to a credit service charge or loan finance charge, as
applicable, or is payable by written agreement in more than
four (4) installments (not including a down payment); and
(b) to whom the obligation is initially payable, either on the face
of the note or contract, or by agreement when there is not a note
or contract.
(9) "Earnings" means compensation paid or payable for personal
services, whether denominated as wages, salary, commission, bonus,
or otherwise, and includes periodic payments under a pension or
retirement program.
(10) "Lender credit card or similar arrangement" means an
arrangement or loan agreement, other than a seller credit card, pursuant
to which a lender gives a debtor the privilege of using a credit card,
letter of credit, or other credit confirmation or identification in
transactions out of which debt arises:
(a) by the lender's honoring a draft or similar order for the
payment of money drawn or accepted by the debtor;
(b) by the lender's payment or agreement to pay the debtor's
obligations; or
(c) by the lender's purchase from the obligee of the debtor's
obligations.
(11) "Official fees" means:
(a) fees and charges prescribed by law which actually are or will
be paid to public officials for determining the existence of or for
perfecting, releasing, or satisfying a security interest related to a
consumer credit sale, consumer lease, or consumer loan; or
standards in the preceding calendar year, the numerical standards shall
be applied to the current calendar year.
(19) "Seller credit card" means an arrangement which gives to a
buyer or lessee the privilege of using a credit card, letter of credit, or
other credit confirmation or identification for the purpose of purchasing
or leasing goods or services from that person, a person related to that
person, or from that person and any other person. The term includes a
card that is issued by a person, that is in the name of the seller, and that
can be used by the buyer or lessee only for purchases or leases at
locations of the named seller.
(20) "Supervised financial organization" means a person, other than
an insurance company or other organization primarily engaged in an
insurance business:
(a) organized, chartered, or holding an authorization certificate
under the laws of a state or of the United States which authorizes
the person to make loans and to receive deposits, including a
savings, share, certificate, or deposit account; and
(b) subject to supervision by an official or agency of a state or of
the United States.
(21) "Mortgage servicer" means the last person to whom a
mortgagor or the mortgagor's successor in interest has been instructed
by a mortgagee to send payments on a loan secured by a mortgage.
(22) "Affiliate", with respect to any person subject to this article,
means a person that, directly or indirectly, through one (1) or more
intermediaries:
(a) controls;
(b) is controlled by; or
(c) is under common control with;
the person subject to this article.
charge not exceeding that permitted by this section.
(2) The credit service charge, calculated according to the actuarial
method, may not exceed the equivalent of the greater of either of the
following:
(a) the total of:
(i) thirty-six percent (36%) per year on that part of the unpaid
balances of the amount financed which is three hundred
dollars ($300) or less;
(ii) twenty-one percent (21%) per year on that part of the
unpaid balances of the amount financed which is more than
three hundred dollars ($300) but does not exceed one thousand
dollars ($1,000); and
(iii) fifteen percent (15%) per year on that part of the unpaid
balances of the amount financed which is more than one
thousand dollars ($1,000); or
(b) twenty-one percent (21%) per year on the unpaid balances of
the amount financed.
(3) This section does not limit or restrict the manner of contracting
for the credit service charge, whether by way of add-on, discount, or
otherwise, so long as the rate of the credit service charge does not
exceed that permitted by this section. If the sale is precomputed:
(a) the credit service charge may be calculated on the assumption
that all scheduled payments will be made when due; and
(b) the effect of prepayment is governed by the provisions on
rebate upon prepayment (IC 24-4.5-2-210).
(4) For the purposes of this section, the term of a sale agreement
commences with the date the credit is granted or, if goods are delivered
or services performed more than thirty (30) days after that date, with
the date of commencement of delivery or performance except as set
forth below:
(a) Delays attributable to the customer. Where the customer
requests delivery after the thirty (30) day period or where delivery
occurs after the thirty (30) day period for a reason attributable to
the customer (including but not limited to failure to close on a
residence or failure to obtain lease approval), the term of the sale
agreement shall commence with the date credit is granted.
(b) Partial Deliveries. Where any portion of the order has been
delivered within the thirty (30) day period, the term of the sale
agreement shall commence with the date credit is granted.
Differences in the lengths of months are disregarded and a day may be
counted as one-thirtieth (1/30) of a month. Subject to classifications
and differentiations the seller may reasonably establish, a part of a
month in excess of fifteen (15) days may be treated as a full month if
periods of fifteen (15) days or less are disregarded and that procedure
is not consistently used to obtain a greater yield than would otherwise
be permitted.
(5) Subject to classifications and differentiations the seller may
reasonably establish, the seller may make the same credit service
charge on all amounts financed within a specified range. A credit
service charge so made does not violate subsection (2) if:
(a) when applied to the median amount within each range, it does
not exceed the maximum permitted by subsection (2); and
(b) when applied to the lowest amount within each range, it does
not produce a rate of credit service charge exceeding the rate
calculated according to paragraph (a) by more than eight percent
(8%) of the rate calculated according to paragraph (a).
(6) Notwithstanding subsection (2), the seller may contract for and
receive a minimum credit service charge of not more than thirty dollars
($30). The minimum credit service charge allowed under this
subsection may be imposed only if:
(a) the borrower debtor prepays in full a consumer credit sale,
refinancing, or consolidation, regardless of whether the sale,
refinancing, or consolidation is precomputed;
(b) the sale, refinancing, or consolidation prepaid by the borrower
debtor is subject to a credit service charge that:
(i) is contracted for by the parties; and
(ii) does not exceed the rate prescribed in subsection (2); and
(c) the credit service charge earned at the time of prepayment is
less than the minimum credit service charge contracted for under
this subsection.
(7) The amounts of three hundred dollars ($300) and one thousand
dollars ($1,000) in subsection (2) are subject to change pursuant to the
provisions on adjustment of dollar amounts (IC 24-4.5-1-106).
(8) The amount of thirty dollars ($30) in subsection (6) 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 1992.
offer made in connection with a proposed short sale from a third
party acting on behalf of the debtor only if the debtor has provided
written authorization for the creditor, servicer, or creditor's agent
to do so. Not later than twenty (20) business days after receipt of
an offer under this subsection, the creditor, servicer, or creditor's
agent shall respond to the offer with an acceptance or a rejection
of the offer. As used in this subsection, "short sale" means a
transaction in which the property that is the subject of a mortgage
transaction is sold for an amount that is less than the amount of the
debtor's outstanding obligation under the mortgage transaction. A
creditor or mortgage servicer that fails to respond to an offer
within the time prescribed by this subsection is liable:
(a) under the terms set forth in subsection (3), as if the
creditor or mortgage servicer had failed to provide a
consumer credit sale payoff amount; and
(b) in accordance with 12 U.S.C. 2605(f) in any action brought
under that section.
Loans other than Supervised Loans_(1) Except as provided in
subsections (6) and (8), with respect to a consumer loan other than a
supervised loan (IC 24-4.5-3-501), a lender may contract for a loan
finance charge, calculated according to the actuarial method, not
exceeding twenty-one percent (21%) per year on the unpaid balances
of the principal.
(2) This section does not limit or restrict the manner of contracting
for the loan finance charge, whether by way of add-on, discount, or
otherwise, so long as the rate of the loan finance charge does not
exceed that permitted by this section. If the loan is precomputed:
(a) the loan finance charge may be calculated on the assumption
that all scheduled payments will be made when due; and
(b) the effect of prepayment is governed by the provisions on
rebate upon prepayment (IC 24-4.5-3-210).
(3) For the purposes of this section, the term of a loan commences
with the date the loan is made. Differences in the lengths of months are
disregarded, and a day may be counted as one-thirtieth (1/30) of a
month. Subject to classifications and differentiations the lender may
reasonably establish, a part of a month in excess of fifteen (15) days
may be treated as a full month if periods of fifteen (15) days or less are
disregarded and if that procedure is not consistently used to obtain a
greater yield than would otherwise be permitted. For purposes of
computing average daily balances, the creditor may elect to treat all
months as consisting of thirty (30) days.
(4) With respect to a consumer loan made pursuant to a revolving
loan account:
(a) the loan finance charge shall be deemed not to exceed the
maximum annual percentage rate if the loan finance charge
contracted for and received does not exceed a charge in each
monthly billing cycle which is one and three-fourths percent (1
3/4%) of an amount no greater than:
(i) the average daily balance of the debt;
(ii) the unpaid balance of the debt on the same day of the
billing cycle; or
(iii) subject to subsection (5), the median amount within a
specified range within which the average daily balance or the
unpaid balance of the debt, on the same day of the billing
cycle, is included; for the purposes of this subparagraph and
subparagraph (ii), a variation of not more than four (4) days
from month to month is "the same day of the billing cycle";
(b) if the billing cycle is not monthly, the loan finance charge
shall be deemed not to exceed the maximum annual percentage
rate if the loan finance charge contracted for and received does
not exceed a percentage which bears the same relation to
one-twelfth (1/12) the maximum annual percentage rate as the
number of days in the billing cycle bears to thirty (30); and
(c) notwithstanding subsection (1), if there is an unpaid balance
on the date as of which the loan finance charge is applied, the
lender may contract for and receive a charge not exceeding fifty
cents ($0.50) if the billing cycle is monthly or longer, or the pro
rata part of fifty cents ($0.50) which bears the same relation to
fifty cents ($0.50) as the number of days in the billing cycle bears
to thirty (30) if the billing cycle is shorter than monthly, but no
charge may be made pursuant to this paragraph if the lender has
made an annual charge for the same period as permitted by the
provisions on additional charges (paragraph (c) of subsection (1)
of IC 24-4.5-3-202).
(5) Subject to classifications and differentiations, the lender may
reasonably establish and make the same loan finance charge on all
amounts financed within a specified range. A loan finance charge does
not violate subsection (1) if:
(a) when applied to the median amount within each range, it does
not exceed the maximum permitted by subsection (1); and
(b) when applied to the lowest amount within each range, it does
not produce a rate of loan finance charge exceeding the rate
calculated according to paragraph (a) by more than eight percent
(8%) of the rate calculated according to paragraph (a).
(6) With respect to a consumer loan not made pursuant to a
revolving loan account, the lender may contract for and receive a
minimum loan finance charge of not more than thirty dollars ($30). The
minimum loan finance charge allowed under this subsection may be
imposed only if:
(a) the borrower debtor prepays in full a consumer loan,
refinancing, or consolidation, regardless of whether the loan,
refinancing, or consolidation is precomputed;
(b) the loan, refinancing, or consolidation prepaid by the borrower
debtor is subject to a loan finance charge that:
(i) is contracted for by the parties; and
(ii) does not exceed the rate prescribed in subsection (1); and
(c) the loan finance charge earned at the time of prepayment is
less than the minimum loan finance charge contracted for under
this subsection.
(7) The amount of thirty dollars ($30) in subsection (6) 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 1992.
(8) In addition to the loan finance charge provided for in this
section, a lender may contract for the following:
(a) With respect to a consumer loan that is not made under a
revolving loan account, a loan origination fee of not more than
two percent (2%) of the loan amount.
(b) With respect to a consumer loan that is made under a
revolving loan account, a loan origination fee of not more than
two percent (2%) of the line of credit that was contracted for.
(9) The charges provided for in subsection (8):
(a) are not subject to refund or rebate;
(b) are not permitted if a lender makes a settlement charge under
IC 24-4.5-3-202(d)(ii); and
(c) are limited to two percent (2%) of the part of the loan that
does not exceed two thousand dollars ($2,000), if the loan is not
primarily secured by an interest in land.
Notwithstanding subdivision (a), if a lender retains any part of a loan
origination fee charged on a loan that is paid in full by a new loan from
the same lender within three (3) months after the date of the prior loan,
the lender may charge a loan origination fee only on that part of the
new loan not used to pay the amount due on the prior loan, or in the
case of a revolving loan, the lender may charge a loan origination fee
only on the difference between the amount of the existing credit line
and the increased credit line. This subsection does not prohibit a lender
from contracting for and receiving a fee for preparing deeds,
mortgages, reconveyance, and similar documents under
IC 24-4.5-3-202(d)(ii), in addition to the charges provided for in
subsection (8).
creditor;
(b) for prepayment by proceeds of any insurance or acceleration
after default; or
(c) after three (3) years from the contract date.
(2) At the time of prepayment of a consumer loan not subject to the
provisions of rebate upon prepayment (IC 24-4.5-3-210), the total
finance charge, including the prepaid finance charge but excluding the
loan origination fee allowed under IC 24-4.5-3-201, may not exceed the
maximum charge allowed under this chapter for the period the loan was
in effect. For the purposes of determining compliance with this
subsection, the total finance charge does not include the following:
(a) The loan origination fee allowed under IC 24-4.5-3-201.
(b) The borrower debtor paid mortgage broker fee, if any, paid to
a person who does not control, is not controlled by, or is not under
common control with, the creditor holding the loan at the time a
consumer loan is prepaid.
(3) The creditor or mortgage servicer shall provide an accurate
payoff of the consumer loan to the debtor within ten (10) calendar days
after the creditor or mortgage servicer receives the debtor's written
request for the accurate consumer loan payoff amount. A creditor or
mortgage servicer who fails to provide the accurate consumer loan
payoff amount is liable for:
(a) one hundred dollars ($100) if an accurate consumer loan
payoff amount is not provided by the creditor or mortgage
servicer within ten (10) calendar days after the creditor or
mortgage servicer receives the debtor's first written request; and
(b) the greater of:
(i) one hundred dollars ($100); or
(ii) the loan finance charge that accrues on the loan from the
date the creditor or mortgage servicer receives the first written
request until the date on which the accurate consumer loan
payoff amount is provided;
if an accurate consumer loan payoff amount is not provided by the
creditor or mortgage servicer within ten (10) calendar days after
the creditor or mortgage servicer receives the debtor's second
written request, and the creditor or mortgage servicer failed to
comply with subdivision (a).
A liability under this subsection is an excess charge under
IC 24-4.5-5-202.
(4) As used in this subsection, "mortgage transaction" means a
consumer credit loan in which a mortgage, deed of trust, or a land
contract that constitutes a lien is created or retained against land
upon which there is a dwelling that is or will be used by the debtor
primarily for personal, family, or household purposes. This
subsection applies to a mortgage transaction with respect to which
any installment or minimum payment due is delinquent for at least
ten (10) days. The creditor, servicer, or the creditor's agent shall
acknowledge a written offer made in connection with a proposed
short sale not later than ten (10) business days after the date of the
offer if the offer complies with the requirements for a qualified
written request set forth in 12 U.S.C. 2605(e)(1)(B). The creditor,
servicer, or creditor's agent is required to acknowledge a written
offer made in connection with a proposed short sale from a third
party acting on behalf of the debtor only if the debtor has provided
written authorization for the creditor, servicer, or creditor's agent
to do so. Not later than twenty (20) business days after receipt of
an offer under this subsection, the creditor, servicer, or creditor's
agent shall respond to the offer with an acceptance or a rejection
of the offer. As used in this subsection, "short sale" means a
transaction in which the property that is the subject of a mortgage
transaction is sold for an amount that is less than the amount of the
debtor's outstanding obligation under the mortgage transaction. A
creditor or mortgage servicer that fails to respond to an offer
within the time prescribed by this subsection is liable:
(a) under the terms set forth in subsection (3), as if the
creditor or mortgage servicer had failed to provide a
consumer credit loan payoff amount; and
(b) in accordance with 12 U.S.C. 2605(f) in any action brought
under that section.
unpaid balances of the principal which is more than three
hundred dollars ($300) but does not exceed one thousand
dollars ($1,000); and
(iii) fifteen percent (15%) per year on that part of the unpaid
balances of the principal which is more than one thousand
dollars ($1000); or
(b) twenty-one percent (21%) per year on the unpaid balances of
the principal.
(3) This section does not limit or restrict the manner of contracting
for the loan finance charge, whether by way of add-on, discount, or
otherwise, so long as the rate of the loan finance charge does not
exceed that permitted by this section. If the loan is precomputed:
(a) the loan finance charge may be calculated on the assumption
that all scheduled payments will be made when due; and
(b) the effect of prepayment is governed by the provisions on
rebate upon prepayment (IC 24-4.5-3-210).
(4) The term of a loan for the purposes of this section commences
on the date the loan is made. Differences in the lengths of months are
disregarded, and a day may be counted as one-thirtieth (1/30) of a
month. Subject to classifications and differentiations the lender may
reasonably establish, a part of a month in excess of fifteen (15) days
may be treated as a full month if periods of fifteen (15) days or less are
disregarded and that procedure is not consistently used to obtain a
greater yield than would otherwise be permitted.
(5) Subject to classifications and differentiations, the lender may
reasonably establish and make the same loan finance charge on all
principal amounts within a specified range. A loan finance charge does
not violate subsection (2) if:
(a) when applied to the median amount within each range, it does
not exceed the maximum permitted in subsection (2); and
(b) when applied to the lowest amount within each range, it does
not produce a rate of loan finance charge exceeding the rate
calculated according to paragraph (a) by more than eight percent
(8%) of the rate calculated according to paragraph (a).
(6) The amounts of three hundred dollars ($300) and one thousand
dollars ($1,000) in subsection (2) and thirty dollars ($30) in subsection
(7) are subject to change pursuant to the provisions on adjustment of
dollar amounts (IC 24-4.5-1-106). For the adjustment of the amount of
thirty dollars ($30), the Reference Base Index to be used is the Index
for October 1992.
(7) With respect to a supervised loan not made pursuant to a
revolving loan account, the lender may contract for and receive a
minimum loan finance charge of not more than thirty dollars ($30). The
minimum loan finance charge allowed under this subsection may be
imposed only if:
(a) the borrower debtor prepays in full a consumer loan,
refinancing, or consolidation, regardless of whether the loan,
refinancing, or consolidation is precomputed;
(b) the loan, refinancing, or consolidation prepaid by the borrower
debtor is subject to a loan finance charge that:
(i) is contracted for by the parties; and
(ii) does not exceed the rate prescribed in subsection (2); and
(c) the loan finance charge earned at the time of prepayment is
less than the minimum loan finance charge contracted for under
this subsection.
whether or not the person deals directly with the consumer.
(B) A person who contrives, prepares, sets up, operates,
publicizes by means of advertisements, or promotes a pyramid
promotional scheme.
(C) With respect to a deceptive act described in section
3(h) of this chapter, a creditor (as defined in IC 24-9-2-6).
(4) "Subject of a consumer transaction" means the personal
property, real property, services, or intangibles offered or
furnished in a consumer transaction.
(5) "Cure" as applied to a deceptive act, means either:
(A) to offer in writing to adjust or modify the consumer
transaction to which the act relates to conform to the
reasonable expectations of the consumer generated by such
deceptive act and to perform such offer if accepted by the
consumer; or
(B) to offer in writing to rescind such consumer transaction
and to perform such offer if accepted by the consumer.
The term includes an offer in writing of one (1) or more items of
value, including monetary compensation, that the supplier
delivers to a consumer or a representative of the consumer if
accepted by the consumer.
(6) "Offer to cure" as applied to a deceptive act is a cure that:
(A) is reasonably calculated to remedy a loss claimed by the
consumer; and
(B) includes a minimum additional amount that is the greater
of:
(i) ten percent (10%) of the value of the remedy under
clause (A), but not more than four thousand dollars
($4,000); or
(ii) five hundred dollars ($500);
as compensation for attorney's fees, expenses, and other costs
that a consumer may incur in relation to the deceptive act.
(7) "Uncured deceptive act" means a deceptive act:
(A) with respect to which a consumer who has been damaged
by such act has given notice to the supplier under section 5(a)
of this chapter; and
(B) either:
(i) no offer to cure has been made to such consumer within
thirty (30) days after such notice; or
(ii) the act has not been cured as to such consumer within a
reasonable time after the consumer's acceptance of the offer
to cure.
or obligations, if the representation is false and if the supplier
knows or should reasonably know that the representation is false.
(9) That the consumer will receive a rebate, discount, or other
benefit as an inducement for entering into a sale or lease in return
for giving the supplier the names of prospective consumers or
otherwise helping the supplier to enter into other consumer
transactions, if earning the benefit, rebate, or discount is
contingent upon the occurrence of an event subsequent to the time
the consumer agrees to the purchase or lease.
(10) That the supplier is able to deliver or complete the subject of
the consumer transaction within a stated period of time, when the
supplier knows or should reasonably know the supplier could not.
If no time period has been stated by the supplier, there is a
presumption that the supplier has represented that the supplier
will deliver or complete the subject of the consumer transaction
within a reasonable time, according to the course of dealing or the
usage of the trade.
(11) That the consumer will be able to purchase the subject of the
consumer transaction as advertised by the supplier, if the supplier
does not intend to sell it.
(12) That the replacement or repair constituting the subject of a
consumer transaction can be made by the supplier for the estimate
the supplier gives a customer for the replacement or repair, if the
specified work is completed and:
(A) the cost exceeds the estimate by an amount equal to or
greater than ten percent (10%) of the estimate;
(B) the supplier did not obtain written permission from the
customer to authorize the supplier to complete the work even
if the cost would exceed the amounts specified in clause (A);
(C) the total cost for services and parts for a single transaction
is more than seven hundred fifty dollars ($750); and
(D) the supplier knew or reasonably should have known that
the cost would exceed the estimate in the amounts specified in
clause (A).
(13) That the replacement or repair constituting the subject of a
consumer transaction is needed, and that the supplier disposes of
the part repaired or replaced earlier than seventy-two (72) hours
after both:
(A) the customer has been notified that the work has been
completed; and
(B) the part repaired or replaced has been made available for
examination upon the request of the customer.
representation is true if such other supplier shall know or have reason
to know that such representation was false.
(c) If a supplier shows by a preponderance of the evidence that an
act resulted from a bona fide error notwithstanding the maintenance of
procedures reasonably adopted to avoid the error, such act shall not be
deceptive within the meaning of this chapter.
(d) It shall be a defense to any action brought under this chapter that
the representation constituting an alleged deceptive act was one made
in good faith by the supplier without knowledge of its falsity and in
reliance upon the oral or written representations of the manufacturer,
the person from whom the supplier acquired the product, any testing
organization, or any other person provided that the source thereof is
disclosed to the consumer.
(e) For purposes of subsection (a)(12), a supplier that provides
estimates before performing repair or replacement work for a customer
shall give the customer a written estimate itemizing as closely as
possible the price for labor and parts necessary for the specific job
before commencing the work.
(f) For purposes of subsection (a)(15), a telephone company or other
provider of a telephone directory or directory assistance service or its
officer or agent is immune from liability for publishing the listing of a
fictitious business name or assumed business name of a supplier in its
directory or directory assistance data base unless the telephone
company or other provider of a telephone directory or directory
assistance service is the same person as the supplier who has
committed the deceptive act.
(g) For purposes of subsection (a)(18), it is an affirmative defense
to any action brought under this chapter that the product has been
altered by a person other than the defendant to render the product
completely incapable of serving its original purpose.
(h) In addition to the acts set forth in subsection (a), a violation
of IC 24-9 (concerning home loans) is a deceptive act under this
chapter.
the loss; or
(2) one thousand dollars ($1,000).
Except as provided in subsection (j), the court may award reasonable
attorney fees to the party that prevails in an action under this
subsection. Except for a deceptive act described in section 3(h) of
this chapter, and except for purchases of time shares and camping
club memberships, this subsection does not apply to a consumer
transaction in real property, including a claim or action involving a
construction defect (as defined in IC 32-27-3-1(5)) brought against a
construction professional (as defined in IC 32-27-3-1(4)). except for
purchases of time shares and camping club memberships. This
subsection also does not apply to a violation of IC 24-4.7, IC 24-5-12,
or IC 24-5-14. Actual damages awarded to a person under this section
have priority over any civil penalty imposed under this chapter.
(b) Any person who is entitled to bring an action under subsection
(a) on the person's own behalf against a supplier for damages for a
deceptive act may bring a class action against such supplier on behalf
of any class of persons of which that person is a member and which has
been damaged by such deceptive act, subject to and under the Indiana
Rules of Trial Procedure governing class actions, except as herein
expressly provided. Except as provided in subsection (j), the court may
award reasonable attorney fees to the party that prevails in a class
action under this subsection, provided that such fee shall be determined
by the amount of time reasonably expended by the attorney and not by
the amount of the judgment, although the contingency of the fee may
be considered. Any money or other property recovered in a class action
under this subsection which cannot, with due diligence, be restored to
consumers within one (1) year after the judgment becomes final shall
be returned to the party depositing the same. Except for a deceptive
act described in section 3(h) of this chapter, and except for
purchases of time shares and camping club memberships, this
subsection does not apply to a consumer transaction in real property.
except for purchases of time shares and camping club memberships.
Actual damages awarded to a class have priority over any civil penalty
imposed under this chapter.
(c) The attorney general may bring an action to enjoin a deceptive
act, including a deceptive act described in section 3(h) of this
chapter. However, with respect to all other consumer transactions
involving real property, the attorney general may seek to enjoin
patterns of incurable deceptive acts. with respect to consumer
transactions in real property. In addition, the court may:
(1) issue an injunction;
established by IC 24-4.7-3-6 to be used for the administration and
enforcement of section 3(a)(19) of this chapter.
(i) An elderly person relying upon an uncured or incurable
deceptive act, including an act related to hypnotism, may bring an
action to recover treble damages, if appropriate.
(j) An offer to cure is:
(1) not admissible as evidence in a proceeding initiated under this
section unless the offer to cure is delivered by a supplier to the
consumer or a representative of the consumer before the supplier
files the supplier's initial response to a complaint; and
(2) only admissible as evidence in a proceeding initiated under
this section to prove that a supplier is not liable for attorney's fees
under subsection (k).
If the offer to cure is timely delivered by the supplier, the supplier may
submit the offer to cure as evidence to prove in the proceeding in
accordance with the Indiana Rules of Trial Procedure that the supplier
made an offer to cure.
(k) A supplier may not be held liable for the attorney's fees and
court costs of the consumer that are incurred following the timely
delivery of an offer to cure as described in subsection (j) unless the
actual damages awarded, not including attorney's fees and costs, exceed
the value of the offer to cure.
(l) The following apply to a deceptive act described in section
3(h) of this chapter:
(1) A person aggrieved by an uncured or incurable deceptive
act described in section 3(h) of this chapter may bring an
action under subsection (a) for the damages actually suffered
as a consumer as a result of the deceptive act. The court may
increase damages for a willful deceptive act in an amount that
does not exceed three (3) times the actual damages of the
consumer suffering the loss.
(2) For a violation of an injunction issued under subsection
(c), a civil penalty of not more than thirty thousand dollars
($30,000) may be imposed under subsection (f).
(3) If a court finds any person has knowingly violated section
3(h) of this chapter, the attorney general, in an action under
subsection (c), may recover from the person on behalf of the
state a civil penalty of a fine not exceeding ten thousand
dollars ($10,000) per violation. A civil penalty recovered
under this subdivision shall be deposited in the homeowner
protection unit account established by IC 4-6-12-9.
FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 8. (a) Except as
provided in subsection (b), a person who commits an incurable
deceptive act is subject to a civil penalty of a fine of not more than five
hundred dollars ($500) for each violation. The attorney general, acting
in the name of the state, has the exclusive right to petition for recovery
of such a fine, and this fine may be recovered only in an action brought
under section 4(c) of this chapter.
(b) A person who commits an incurable deceptive act described
in section 3(h) of this chapter is subject to a civil penalty of a fine
of not more than one thousand dollars ($1,000) for each violation.
The attorney general, acting in the name of the state, has the
exclusive right to petition for recovery of the fine, and the fine may
be recovered only in an action brought under section 4(c) of this
chapter.
borrower without first conducting a reasonable inquiry
concerning the prospective borrower's ability to repay the
home loan. A creditor, or any officer, agent, or employee of a
creditor, that conducts a reasonable inquiry under this section
is not liable to:
(A) a borrower or prospective borrower;
(B) a subsequent purchaser of a home that was the subject
of a home loan on which a borrower has defaulted; or
(C) any other person;
if a borrower later defaults on a home loan issued by the
creditor.
creditor, servicer, or agent had failed to provide a consumer
loan payoff amount; and
(2) in accordance with 12 U.S.C. 2605(f) in any action brought
under that section.
borrower is entitled to delay or reschedule the closing without
penalty and without forfeiting the right to enter into the loan or, in
the case of a purchase money home loan, into the purchase
contract.
(e) If the terms of the home loan set forth in the closing
documents made available to the borrower under subsection (a)
differ from the terms of the home loan presented to the borrower
at the time of the closing, the borrower is entitled to delay or
reschedule the closing without penalty and without forfeiting the
right to enter into the loan or, in the case of a purchase money
home loan, into the purchase contract. For purposes of this
subsection, "terms", with respect to a home loan, include any of the
following:
(1) The total loan amount.
(2) The loan's rate, including the trigger rate.
(3) Points and fees.
(4) Payment amounts and schedules.
(5) The term or duration of the loan.
(6) Prepayment penalties, if any.
(7) Acceleration provisions.
(8) Servicing of the loan.
(9) Other provisions concerning the rights and responsibilities
of the parties to the home loan.
Sec. 6. (a) A settlement service provider is subject to a civil
penalty of twenty-five dollars ($25) for each instance in which the
settlement service provider fails to make closing documents
available to a borrower as required by section 5 of this chapter,
unless:
(1) the creditor making the home loan fails to provide the
closing documents despite the settlement service provider's
good faith efforts to obtain the closing documents, as required
under section 5(b) of this chapter; or
(2) the borrower has waived the borrower's right to receive
the closing documents under section 5(c) of this chapter.
(b) A penalty described in subsection (a):
(1) may be enforced by the state agency that has
administrative jurisdiction over the settlement service
provider 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.
(c) A settlement service provider is not liable for any other
damages claimed by a customer because of the settlement service
provider's failure to comply with this chapter.
be denied licensure or certification under this chapter for any
reason set forth in subsection (a)(1). The applicant shall pay any
fees or costs associated with the fingerprints and background check
required under this subsection. The board may not release the
results of a background check described in this subsection to any
private entity.
(c) The board may request evidence of compliance with this
section in accordance with subsection (d). Evidence of compliance
with this section may include any of the following:
(1) Subject to subsections (b) and (d)(2), criminal background
checks, including a national criminal history background
check (as defined in IC 10-13-3-12) by the Federal Bureau of
Investigation.
(2) Credit histories.
(3) Other background checks considered necessary by the
board.
(d) The board may request evidence of compliance with this
section at any of the following times:
(1) The time of application for an initial license or certificate.
(2) The time of renewal of a license or certificate.
(3) Any other time considered necessary by the board.
(e) The commission, upon recommendation of the board, shall
adopt rules under IC 4-22-2 to implement this section.
(c)(2)(B);
except to the extent required or authorized by state or federal law.
in the meeting; or
(2) the meeting may be conducted in its entirety;
by means of a conference telephone or similar communications
equipment by which all persons participating in the meeting can
communicate with each other. Participation by the means
described in this subsection constitutes presence in person at the
meeting.
(f) Beginning in 2008, not later than November 1 of each year,
the task force shall report to the legislative council on the activities
of the task force during the most recent state fiscal year. The
report required under this subsection must include:
(1) information on the regulatory activities of each agency
described in subsection (b), including a description of any:
(A) investigations conducted; or
(B) disciplinary actions taken or criminal prosecutions
pursued;
with respect to the professions involved in originating, issuing,
and closing home loans;
(2) a description of any challenges:
(A) encountered by the task force during the most recent
state fiscal year; or
(B) anticipated by the task force in the current state fiscal
year;
in carrying out the duties set forth in subsection (d);
(3) any additional information required by the legislative
council; and
(4) any recommendations by the task force for legislation
necessary to assist the task force in carrying out the duties set
forth in subsection (d).
A report to the legislative council under this subsection must be in
an electronic format under IC 5-14-6.
recommendations for legislation needed to implement the
appropriate regulation of a person described in subsection (c), as
determined by the commissioner and the director.
(e) This SECTION expires January 1, 2010.