Introduced Version






HOUSE BILL No. 1410

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DIGEST OF INTRODUCED BILL



Citations Affected: IC 24-4.5-7-301.

Synopsis: Information about credit counseling services. Provides that after December 31, 2011, a payday lender doing business in Indiana shall: (1) conspicuously display at its business locations and include on its loan documents a toll free telephone number that borrowers may call to receive information about credit counseling services; and (2) maintain a toll free number that borrowers may call to receive such information. Defines "credit counseling service" as: (1) a nonprofit budget and credit counseling agency approved by the United States Trustee or a bankruptcy administrator; or (2) a nonprofit agency approved by the director of the department of financial institutions (director); to provide credit counseling services in Indiana. Requires a lender to provide through the required toll free telephone number the name, street address, telephone number, and Internet web site address for at least three approved credit counseling services. Allows a lender to print on its displays or loan documents an Internet web site address that the borrower may access to receive information about credit counseling services. Provides that the web site address may be for: (1) a web page maintained by the lender to allow borrowers to access information for at least three approved credit counseling services; or (2) the United States Trustee's web page through which the borrower may directly access information on credit counseling services in Indiana. Requires a lender to update, at least annually and by a date specified by the director, the information provided through the lender's toll free telephone number (and web address, if applicable) to ensure that the information is consistent with that available from: (1) the United States Trustee or a bankruptcy administrator; or (2) the director.

(Continued next page)

Effective: Upon passage.





Goodin




    January 18, 2011, read first time and referred to Committee on Financial Institutions.





Digest Continued

Provides that the toll free telephone number required to be maintained: (1) may connect a borrower to an automated system, such as an interactive voice response system; and (2) may be a telephone number designed to receive customer service calls generally, if the option to receive the required information is in the first menu of options given to the borrower. Requires the director to adopt, not later than September 1, 2011, rules or policies to implement these requirements.



Introduced

First Regular Session 117th General Assembly (2011)


PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in this style type.
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HOUSE BILL No. 1410



    A BILL FOR AN ACT to amend the Indiana Code concerning trade regulation.

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

SOURCE: IC 24-4.5-7-301; (11)IN1410.1.1. -->     SECTION 1. IC 24-4.5-7-301, AS AMENDED BY P.L.35-2010, SECTION 83, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 301. (1) For purposes of this section, the lender shall disclose to the borrower to whom credit is extended with respect to a small loan the information required by the Federal Consumer Credit Protection Act.
    (2) In addition to the requirements of subsection (1), the lender must conspicuously display in bold type a notice to the public both in the lending area of each business location and in the loan documents the following statement:
        "WARNING: A small loan is not intended to meet long term financial needs. A small loan should be used only to meet short term cash needs. The cost of your small loan may be higher than loans offered by other lending institutions. Small loans are regulated by the State of Indiana Department of Financial

Institutions.
        A borrower may rescind a small loan without cost by paying the cash amount of the principal of the small loan to the lender not later than the end of the business day immediately following the day on which the small loan was made.".
    (3) The statement required in subsection (2) must be in:
        (a) 14 point bold face type in the loan documents; and
        (b) not less than one (1) inch bold print in the lending area of the business location.
     (4) After December 31, 2011, a lender shall do the following:
        (a) Subject to subsection (5), conspicuously:
            (i) display, using the print size and type specified in subsection (3)(b), in the lending area of each business location of the lender; and
            (ii) include,
using the print size and type specified in subsection (3)(a), in loan documents issued by the lender after December 31, 2011;
        a toll free telephone number that the borrower may call to receive information about accessing credit counseling services.
        (b) Maintain the toll free telephone number described in subdivision (a) in the manner prescribed by subsection (5).
    (5) The following apply with respect to the requirements set forth in subsection (4):
        (a) For purposes of subsection (4), "credit counseling service" means either of the following:
            (i) A nonprofit budget and credit counseling agency approved by the United States Trustee or a bankruptcy administrator under 11 U.S.C. 111(a)(1) to provide credit counseling services in Indiana.
            (ii) A nonprofit agency that:
                (A) provides credit counseling services in Indiana;
                (B) is approved by the director in a rule or policy adopted under subdivision (g); and
                (C) may also be a nonprofit budget and credit counseling agency described in clause (i).
        (b) The information required by subsection (4)(a) shall be printed immediately below the statement required by subsection (2) on:
            (i) each display in the lending area of the lender's business locations; and
            (ii) each loan document issued by the lender after

December 31, 2011.
        (c) In addition to the information required by subsection (4)(a), the lender may print on any display described in subdivision (b)(i) or on any loan document described in subdivision (b)(ii), an Internet web site address that the borrower may access to receive information about accessing credit counseling services. An Internet web site address provided under this subdivision may be for either of the following:
            (i) An Internet web site that is maintained by the lender and through which the borrower may access the information required by subdivision (d) for at least three (3) credit counseling services, as described in subdivision (d). The Internet web site address provided by the lender must be for a direct link to the specific Internet web page where the lender maintains the information described in this clause.
            (ii) The United States Trustee's Internet web page through which the borrower may directly access the information described in subdivision (d)(i) for credit counseling services in Indiana.
        (d) The lender shall provide one (1) of the following through the toll free telephone number required to be maintained under subsection (4)(b):
            (i) To the extent available from the United States Trustee or a bankruptcy administrator, the name, street address, telephone number, and Internet web site address for at least three (3) credit counseling services described in subdivision (a)(i). For purposes of this clause, the information required to be provided by this clause is available from the United States Trustee or a bankruptcy administrator if it is available through the Internet web page described in subdivision (c)(ii). If one (1) or more items of information required by this clause are not available through the Internet web page described in subdivision (c)(ii) with respect to a particular credit counseling service, a lender complies with this clause if the lender provides each item of information required by this clause that is available through the Internet web page described in subdivision (c)(ii) with respect to the particular credit counseling service.
            (ii) The name, street address, telephone number, and

Internet web site address for at least three (3) credit counseling services approved by the director in a rule or policy described in subdivision (a)(ii)(B).
            (iii) The name, street address, telephone number, and Internet web site address for:
                (A) one (1) or more credit counseling services approved by the United States Trustee or a bankruptcy administrator under 11 U.S.C. 111(a)(1); and
                (B) one (1) or more credit counseling services approved by the director in a rule or policy described in subdivision (a)(ii)(B);
            if the total number of credit counseling services for which the information required by this clause is provided is at least three (3).
        (e) At least annually, and by a date specified by the director in a rule or policy adopted under subdivision (g), the lender shall update the information provided under subdivision (d) through the lender's toll free telephone number to ensure that the information provided is consistent with that available from:
            (i) the United States Trustee or a bankruptcy administrator; or
            (ii) the director;
        as applicable. If the lender chooses to print on any display described in subdivision (b)(i) or on any loan document described in subdivision (b)(ii), an Internet web site address described in subdivision (c), the lender shall also, annually and by the date required by the director under this subdivision, ensure that the address provided is accurate. If the lender chooses to maintain an Internet web site as described in subdivision (c)(i), the lender shall also, annually and by the date required by the director under this subdivision, update the information available on the specific Internet web page where the lender maintains the information described in subdivision (d), to ensure that the information provided is consistent with that available from the United States Trustee or a bankruptcy administrator, or from the director, as applicable.
        (f) The toll free telephone number required to be maintained under subsection (4)(b):
            (i) may connect a borrower to an automated system, such as an interactive voice response system, through which the

borrower may obtain the information required by subdivision (d) by inputting information using a touch tone telephone or similar device; and
            (ii) may be a toll free telephone number designed to receive customer service calls generally, as long as the option to receive the information required by subdivision (d) is listed as one (1) of the options in the first menu of options given to the borrower.
        (g) Not later than September 1, 2011, the director shall adopt rules or policies to implement this subsection. The rules or policies must do the following:
            (i) Identify at least three (3) nonprofit agencies described in subdivision (a)(ii) that:
                (A) provide credit counseling services in Indiana; and
                (B) are approved by the director to be disclosed to borrowers through the toll free telephone numbers required to be maintained by lenders under subsection (4)(b).
            (ii) Include the information required by subdivision (d) with respect to each nonprofit agency identified under clause (i).
            (iii) Prescribe the annual date by which lenders must update the information provided through:
                (A) the toll free telephone number required to be maintained under subsection (4)(b); or
                (B) an Internet web site address that a lender chooses to provide under subdivision (c);
            as described in subdivision (e).
            (iv) Include any other:
                (A) requirements that the director determines to be necessary to implement this subsection; or
                (B) guidance that the director determines to be helpful to lenders in complying with this subsection.
        The director may adopt emergency rules under IC 4-22-2-37.1 to implement this subsection. An emergency rule adopted by the director under IC 4-22-2-37.1 expires on the date the rule is adopted by the director under IC 4-22-2-24 through IC 4-22-2-36.

    (4) (6) When a borrower enters into a small loan, the lender shall provide the borrower with a pamphlet approved by the department that describes the following:
        (a) The availability of debt management and credit counseling

services. and The information included in the pamphlet under this subdivision may be the information required to be provided by the lender under subsection (4)(a) on:    
             (i) each display in the lending area of the lender's business locations; and
            (ii) each loan document issued by the lender after December 31, 2011.

        (b) The borrower's rights and responsibilities in the transaction.

SOURCE: ; (11)IN1410.1.2. -->     SECTION 2. An emergency is declared for this act.