CHAPTER 2. CREDIT SALES
IC 24-4.5-2
Chapter 2. Credit Sales
(Part 1. General Provisions)
IC 24-4.5-2-101
Short title
Sec. 101. Short Title _ This Chapter shall be known and may becited as Uniform Consumer Credit Code - Credit Sales.
(Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-102
Application
Sec. 102. This chapter applies to consumer credit sales, includinghome solicitation sales, and consumer leases. In addition,IC 24-4.5-2-601 through IC 24-4.5-2-605 apply to consumer relatedsales. Licensing under IC 24-4.5-3-502.1 applies to consumer creditsales that are subordinate lien mortgage transactions.
(Formerly: Acts 1971, P.L.366, SEC.3.) As amended byP.L.152-1986, SEC.60; P.L.35-2010, SEC.42.
IC 24-4.5-2-103
Definitions in chapter
Sec. 103. Definitions in Chapter _ The following definitionsapply to this Article and appear in this Chapter as follows:
"Amount financed" Section 2-111
"Annual percentage rate" Section 2-304 (2)
"Cash price" Section 2-110
"Consumer credit sale" Section 2-104
"Consumer lease" Section 2-106
"Consumer related sale" Section 2-602
"Corresponding nominal annual
percentage rate" Section 2-304 (3)
"Credit service charge" Section 2-109
"Goods" Section 2-105 (1)
"Home solicitation sale" Section 2-501
"Merchandise certificate" Section 2-105 (2)
"Precomputed" Section 2-105 (7)
"Revolving charge account" Section 2-108
"Sale of goods" Section 2-105 (4)
"Sale of an interest in land" Section 2-105 (6)
"Sale of services" Section 2-105 (5)
"Seller" Section 2-107
"Services" Section 2-105 (3)
(Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-104
Repealed
(Repealed by P.L.35-2010, SEC.209.)
IC 24-4.5-2-105
"Goods"; "merchandise certificate"; "services"; "sale of goods";"sale of services"; "sale of an interest in land"; "precomputed"
Sec. 105. Definitions: "Goods"; "Merchandise Certificate";"Services"; "Sale of Goods"; "Sale of Services"; "Sale of an Interestin Land"; "Precomputed".
(1) "Goods" includes goods not in existence at the time thetransaction is entered into and merchandise certificates, but excludesmoney, chattel paper, documents of title, and instruments.
(2) "Merchandise certificate" means a writing issued by a sellernot redeemable in cash and usable in its face amount in lieu of cashin exchange for goods or services.
(3) "Services" includes (a) work, labor, and other personalservices, (b) privileges with respect to transportation, hotel andrestaurant accommodations, education, entertainment, recreation,physical culture, hospital accommodations, funerals, cemeteryaccommodations, and the like, and (c) insurance provided by aperson other than the insurer.
(4) "Sale of goods" includes any agreement in the form of abailment or lease of goods if the bailee or lessee agrees to pay ascompensation for use a sum substantially equivalent to or in excessof the aggregate value of the goods involved and it is agreed that thebailee or lessee will become, or for no other or a nominalconsideration has the option to become, the owner of the goods uponfull compliance with his obligations under the agreement.
(5) "Sale of services" means furnishing or agreeing to furnishservices and includes making arrangements to have servicesfurnished by another.
(6) "Sale of an interest in land" includes a lease in which thelessee has an option to purchase the interest and all or a substantialpart of the rental or other payments previously made by him areapplied to the purchase price.
(7) A sale, refinancing, or consolidation is "precomputed" if thedebt is expressed as a sum comprising the amount financed and theamount of the credit service charge computed in advance.
(Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-106
"Consumer lease"
Sec. 106. (1) "Consumer lease" means a lease of goods:
(a) which a lessor regularly engaged in the business of leasingmakes to a person, other than an organization, who takes underthe lease primarily for a personal, family, or household purpose;
(b) in which the amount payable under the lease does notexceed fifty thousand dollars ($50,000); and
(c) which is for a term exceeding four (4) months.
(2) "Consumer lease" does not include a lease made pursuant toa lender credit card or similar arrangement.
(Formerly: Acts 1971, P.L.366, SEC.3.) As amended byP.L.247-1983, SEC.3; P.L.122-1994, SEC.9.
IC 24-4.5-2-107
"Seller"
Sec. 107. Definition; "Seller" - Except as otherwise provided,"seller" means a person regularly engaged as a creditor in makingconsumer credit sales. The term includes an assignee of the seller'sright to payment but use of the term does not in itself impose on anassignee any obligation of the seller with respect to events occurringbefore the assignment.
(Formerly: Acts 1971, P.L.366, SEC.3.) As amended byP.L.145-2008, SEC.22.
IC 24-4.5-2-108
"Revolving charge account"
Sec. 108. Definition: "Revolving Charge Account" _ "Revolvingcharge account" means an arrangement between a seller and a buyerpursuant to which (1) the seller may permit the buyer to purchasegoods or services on credit either from the seller or pursuant to aseller credit card, (2) the unpaid balances of amounts financedarising from purchases and the credit service and other appropriatecharges are debited to an account, (3) a credit service charge if madeis not precomputed but is computed on the outstanding unpaidbalances of the buyer's account from time to time, and (4) the buyerhas the privilege of paying the balances in instalments.
(Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-109
"Credit service charge"
Sec. 109. "Credit service charge" means the sum of:
(1) all charges payable directly or indirectly by the buyer andimposed directly or indirectly by the seller as an incident to theextension of credit, including any of the following types ofcharges which are applicable: time price differential, service,carrying or other charge, however denominated, premium orother charge for any guarantee or insurance protecting the selleragainst the buyer's default or other credit loss; and
(2) charges incurred for investigating the collateral orcredit-worthiness of the buyer.
The term does not include charges as a result of default, additionalcharges (IC 24-4.5-2-202), delinquency charges (IC 24-4.5-2-203.5),or deferral charges (IC 24-4.5-2-204). The term does not includecharges paid or payable to a third party that are not required by theseller as a condition or incident to the extension of credit except forborrower paid mortgage broker fees, including fees paid directly tothe broker or the seller (for delivery to the broker), whether the feesare paid in cash or financed. However, borrower paid mortgagebroker fees do not include fees paid to a mortgage broker by acreditor, including yield spread premiums and service release fees.
(Formerly: Acts 1971, P.L.366, SEC.3.) As amended byP.L.247-1983, SEC.4; P.L.14-1992, SEC.13; P.L.2-1995, SEC.90;P.L.172-1997, SEC.3.
IC 24-4.5-2-110
"Cash price"
Sec. 110. Definition: "Cash Price" _ Except as the departmentmay prescribe by rule, the "cash price" of goods, services, or aninterest in land means the price at which the goods, services, orinterest in land are offered for sale by the seller to cash buyers in theordinary course of business, and may include (1) applicable sales,use, and excise and documentary fees, (2) the cash price ofaccessories or related services such as delivery, installation,servicing, repairs, alterations, service contracts, and improvements,and (3) amounts actually paid or to be paid by the seller forregistration, certificate of title, or license fees. The cash price statedby the seller to the buyer pursuant to the provisions on disclosure(Part 3) of this Chapter is presumed to be the cash price.
(Formerly: Acts 1971, P.L.366, SEC.3.) As amended by P.L.14-1992,SEC.14; P.L.122-1994, SEC.10.
IC 24-4.5-2-111
"Amount financed"
Sec. 111. Definition: "Amount Financed" _ "Amount financed"means the total of the following to the extent that payment isdeferred:
(1) the cash price of the goods, services, or interest in land less theamount of down payment whether made in cash or property;
(2) the amount actually paid or to be paid by the seller pursuantto an agreement with the buyer to discharge a security interest or lienon property traded in; and
(3) if not included in the cash price:
(a) any applicable sales, use, excise or documentary fees;
(b) amounts actually paid or to be paid by the seller forregistration, certificate of title, or license fees; and
(c) additional charges permitted by this Chapter (IC24-4.5-2-202).
(Formerly: Acts 1971, P.L.366, SEC.3.) As amended byP.L.122-1994, SEC.11.
(Part 2. Maximum Charges)
IC 24-4.5-2-201
Credit service charge for consumer credit sales other thanrevolving charge accounts
Sec. 201. Credit Service Charge for Consumer Credit Sales otherthan Revolving Charge Accounts _ (1) With respect to a consumercredit sale, other than a sale pursuant to a revolving charge account,a seller may contract for and receive a credit service charge notexceeding that permitted by this section.
(2) The credit service charge, calculated according to the actuarialmethod, may not exceed the equivalent of the greater of either of thefollowing:
(a) the total of: (i) thirty-six percent (36%) per year on that part of theunpaid balances of the amount financed which is threehundred dollars ($300) or less;
(ii) twenty-one percent (21%) per year on that part of theunpaid balances of the amount financed which is more thanthree hundred dollars ($300) but does not exceed onethousand dollars ($1,000); and
(iii) fifteen percent (15%) per year on that part of the unpaidbalances of the amount financed which is more than onethousand dollars ($1,000); or
(b) twenty-one percent (21%) per year on the unpaid balancesof the amount financed.
(3) This section does not limit or restrict the manner ofcontracting for the credit service charge, whether by way of add-on,discount, or otherwise, so long as the rate of the credit service chargedoes not exceed that permitted by this section. If the sale isprecomputed:
(a) the credit service charge may be calculated on theassumption that all scheduled payments will be made when due;and
(b) the effect of prepayment is governed by the provisions onrebate upon prepayment (IC 24-4.5-2-210).
(4) For the purposes of this section, the term of a sale agreementcommences with the date the credit is granted or, if goods aredelivered or services performed more than thirty (30) days after thatdate, with the date of commencement of delivery or performanceexcept as set forth below:
(a) Delays attributable to the customer. Where the customerrequests delivery after the thirty (30) day period or wheredelivery occurs after the thirty (30) day period for a reasonattributable to the customer (including but not limited to failureto close on a residence or failure to obtain lease approval), theterm of the sale agreement shall commence with the date creditis granted.
(b) Partial Deliveries. Where any portion of the order has beendelivered within the thirty (30) day period, the term of the saleagreement shall commence with the date credit is granted.
Differences in the lengths of months are disregarded and a day maybe counted as one-thirtieth (1/30) of a month. Subject toclassifications and differentiations the seller may reasonablyestablish, a part of a month in excess of fifteen (15) days may betreated as a full month if periods of fifteen (15) days or less aredisregarded and that procedure is not consistently used to obtain agreater yield than would otherwise be permitted.
(5) Subject to classifications and differentiations the seller mayreasonably establish, the seller may make the same credit servicecharge on all amounts financed within a specified range. A creditservice charge so made does not violate subsection (2) if:
(a) when applied to the median amount within each range, itdoes not exceed the maximum permitted by subsection (2); and (b) when applied to the lowest amount within each range, itdoes not produce a rate of credit service charge exceeding therate calculated according to paragraph (a) by more than eightpercent (8%) of the rate calculated according to paragraph (a).
(6) Notwithstanding subsection (2), the seller may contract forand receive a minimum credit service charge of not more than thirtydollars ($30). The minimum credit service charge allowed under thissubsection may be imposed only if:
(a) the 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 debtoris 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 isless than the minimum credit service charge contracted forunder this subsection.
(7) The amounts of three hundred dollars ($300) and one thousanddollars ($1,000) in subsection (2) are subject to change pursuant tothe provisions on adjustment of dollar amounts (IC 24-4.5-1-106).
(8) The amount of thirty dollars ($30) in subsection (6) is subjectto change under the provisions on adjustment of dollar amounts (IC24-4.5-1-106). However, notwithstanding IC 24-4.5-1-106(1), theReference Base Index to be used under this subsection is the Indexfor October 1992.
(Formerly: Acts 1971, P.L.366, SEC.3.) As amended by Acts 1981,P.L.219, SEC.1; P.L.14-1992, SEC.15; P.L.79-1998, SEC.26;P.L.80-1998, SEC.4; P.L.10-2006, SEC.4 and P.L.57-2006, SEC.4;P.L.145-2008, SEC.23.
IC 24-4.5-2-202
Permitted additional charges
Sec. 202. (1) In addition to the credit service charge permitted byIC 24-4.5-2-201 through IC 24-4.5-2-210, a seller may contract forand receive any of the following additional charges in connectionwith a consumer credit sale:
(a) Official fees and taxes.
(b) Charges for insurance as described in subsection (2).
(c) Notwithstanding provisions of the Federal Consumer CreditProtection Act concerning disclosure, charges for otherbenefits, including insurance, conferred on the buyer, if thebenefits are of value to the buyer and if the charges arereasonable in relation to the benefits, and are excluded aspermissible additional charges from the credit service charge.With respect to any additional charge not specifically providedfor in this section, to be a permitted charge under thissubsection the seller must submit a written explanation of thecharge to the department indicating how the charge would beassessed and the value or benefit to the buyer. Supporting
documents may be required by the department. The departmentshall determine whether the charge would be of benefit to thebuyer and is reasonable in relation to the benefits.
(d) A charge not to exceed twenty-five dollars ($25) for eachreturn by a bank or other depository institution of a dishonoredcheck, negotiable order of withdrawal, or share draft issued bythe debtor.
(e) Annual participation fees assessed in connection with arevolving charge account. Annual participation fees must:
(i) be reasonable in amount;
(ii) bear a reasonable relationship to the seller's costs tomaintain and monitor the charge account; and
(iii) not be assessed for the purpose of circumvention orevasion of this article, as determined by the department.
(2) An additional charge may be made for insurance written inconnection with the sale, other than insurance protecting the selleragainst the buyer's default or other credit loss:
(a) with respect to insurance against loss of or damage toproperty, or against liability, if the seller furnishes a clear andspecific statement in writing to the buyer, setting forth the costof the insurance if obtained from or through the seller andstating that the buyer may choose the person, subject to theseller's reasonable approval, through whom the insurance is tobe obtained; and
(b) with respect to consumer credit insurance providing life,accident, unemployment or other loss of income, or healthcoverage, if the insurance coverage is not a factor in theapproval by the seller of the extension of credit and is clearlydisclosed in writing to the buyer, and if, in order to obtain theinsurance in connection with the extension of credit, the buyergives specific, affirmative, written indication of the desire to doso after written disclosure of the cost.
(3) With respect to a subordinate lien mortgage transaction, thefollowing closing costs, if the costs are bona fide, reasonable inamount, and not for the purpose of circumvention or evasion of thisarticle:
(a) fees for title examination, abstract of title, title insurance,property surveys, or similar purposes;
(b) fees for preparing deeds, mortgages, and reconveyance,settlement, and similar documents;
(c) notary and credit report fees;
(d) amounts required to be paid into escrow or trustee accountsif the amounts would not otherwise be included in the loanfinance charge; and
(e) appraisal fees.
(Formerly: Acts 1971, P.L.366, SEC.3.) As amended byP.L.247-1983, SEC.5; P.L.181-1991, SEC.1; P.L.14-1992, SEC.16;P.L.122-1994, SEC.12; P.L.45-1995, SEC.4; P.L.80-1998, SEC.5;P.L.213-2007, SEC.7; P.L.217-2007, SEC.6; P.L.35-2010, SEC.43.
IC 24-4.5-2-203
Repealed
(Repealed by P.L.122-1994, SEC.122.)
IC 24-4.5-2-203.5
Delinquency charges
Sec. 203.5. Delinquency Charges _ (1) With respect to aconsumer credit sale, refinancing, or consolidation, the parties maycontract for a delinquency charge of not more than five dollars ($5)on any installment or minimum payment due not paid in full withinten (10) days after its scheduled due date.
(2) A delinquency charge under this section may be collected onlyonce on an installment however long it remains in default. Adelinquency charge on consumer credit sales made under a revolvingcharge account may be applied each month that the payment is lessthan the minimum required payment. A delinquency charge may becollected any time after it accrues. No delinquency charge may becollected if the installment has been deferred and a deferral charge(IC 24-4.5-2-204) has been paid or incurred.
(3) A delinquency charge may not be collected on an installmentor payment due that is paid in full within ten (10) days after itsscheduled due date even though an earlier maturing installment,minimum payment, or a delinquency charge on:
(a) an earlier installment; or
(b) payment due;
may not have been paid in full. For purposes of this subsection,payments are applied first to current installments or payments dueand then to delinquent installments or payments due.
(4) If two (2) installments or parts of two (2) installments of aprecomputed consumer credit sale are in default for ten (10) days ormore, the creditor may elect to convert the consumer credit sale froma precomputed consumer credit sale to a consumer credit sale inwhich the credit service charge is based on unpaid balances. Acreditor that makes this election shall make a rebate under theprovisions on rebates upon prepayment under IC 24-4.5-2-210 as ofthe maturity date of the first delinquent installment, and thereaftermay make a credit service charge as authorized by the provisions oncredit service charges for consumer credit sales underIC 24-4.5-2-201. The amount of the rebate shall not be reduced bythe amount of any permitted minimum charge under IC 24-4.5-2-210.Any deferral charges made on installments due at or after thematurity date of the first delinquent installment shall be rebated, andno further deferral charges shall be made.
(5) The amount of five dollars ($5) in subsection (1) is subject tochange under the section on adjustment of dollar amounts (IC24-4.5-1-106).
(6) If the parties provide by contract for a delinquency charge thatis subject to change, the seller shall disclose in the contract that theamount of the delinquency charge is subject to change as allowed byIC 24-4.5-1-106.As added by P.L.247-1983, SEC.6. Amended by P.L.181-1991,SEC.2; P.L.115-1992, SEC.1; P.L.122-1994, SEC.13; P.L.45-1995,SEC.5.
IC 24-4.5-2-204
Deferral charges
Sec. 204. Deferral Charges _ (1) With respect to a precomputedconsumer credit sale, refinancing, or consolidation, the parties beforeor after default may agree in writing to a deferral of all or part of oneor more unpaid instalments, and the seller may make and collect acharge not exceeding the rate previously stated to the buyer pursuantto the provisions on disclosure (Part 3) applied to the amount oramounts deferred for the period of deferral calculated without regardto differences in lengths of months, but proportionately for a part ofa month, counting each day as one-thirtieth (1/30) of a month. Adeferral charge may be collected at the time it is assessed or at anytime thereafter.
(2) The seller, in addition to the deferral charge, may makeappropriate additional charges (24-4.5-2-202), and the amount ofthese charges which is not paid in cash may be added to the amountdeferred for the purpose of calculating the deferral charge.
(3) The parties may agree in writing at the time of a precomputedconsumer credit sale, refinancing, or consolidation that if aninstalment is not paid within ten (10) days after its due date, theseller may unilaterally grant a deferral and make charges as providedin this section. No deferral charge may be made for a period after thedate that the seller elects to accelerate the maturity of the agreement.
(4) A delinquency charge made by the seller on an instalment maynot be retained if a deferral charge is made pursuant to this sectionwith respect to the period of delinquency.
(Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-205
Credit service charge on refinancing
Sec. 205. Credit Service Charge on Refinancing _ With respectto a consumer credit sale, refinancing, or consolidation, the sellermay by agreement with the buyer refinance the unpaid balance andmay contract for and receive a credit service charge based on theamount financed resulting from the refinancing at a rate notexceeding that permitted by the provisions on credit service chargefor consumer credit sales (IC 24-4.5-2-201). For the purpose ofdetermining the credit service charge permitted, the amount financedresulting from the refinancing comprises the following:
(1) If the transaction was not precomputed, the total of the unpaidbalance and accrued charges on the date of refinancing, or, if thetransaction was precomputed, the amount which the buyer wouldhave been required to pay upon prepayment pursuant to theprovisions on rebate upon prepayment (IC 24-4.5-2-210) on the dateof refinancing.
(2) Appropriate additional charges (IC 24-4.5-2-202), payment of
which is deferred.
(Formerly: Acts 1971, P.L.366, SEC.3.) As amended by P.L.14-1992,SEC.17.
IC 24-4.5-2-206
Credit service charge on consolidation
Sec. 206. Credit Service Charge on Consolidation _ If a buyerowes an unpaid balance to a seller with respect to a consumer creditsale, refinancing, or consolidation, and becomes obligated on anotherconsumer credit sale, refinancing, or consolidation with the sameseller, the parties may agree to a consolidation resulting in a singleschedule of payments pursuant to either of the following subsections:
(1) The parties may agree to refinance the unpaid balance withrespect to the previous sale pursuant to the provisions on refinancing(24-4.5-2-205) and to consolidate the amount financed resulting fromthe refinancing by adding it to the amount financed with respect tothe subsequent sale. The seller may contract for and receive a creditservice charge based on the aggregate amount financed resultingfrom the consolidation at a rate not exceeding that permitted by theprovisions on credit service charge for consumer credit sales(24-4.5-2-201).
(2) The parties may agree to consolidate by adding together theunpaid balances with respect to the two sales.
(Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-207
Credit service charge for revolving charge accounts
Sec. 207. Credit Service Charge for Revolving Charge Accounts_ (1) With respect to a consumer credit sale made pursuant to arevolving charge account, the parties to the sale may contract for thepayment by the buyer of a credit service charge not exceeding thatpermitted in this section.
(2) A charge may be made in each billing cycle which is apercentage of an amount no greater than
(a) the average daily balance of the account,
(b) the unpaid balance of the account on the same day of thebilling cycle, or
(c) the median amount within a specified range within whichthe average daily balance of the account or the unpaid balanceof the account on the same day of the billing cycle is included.A charge may be made pursuant to this paragraph only if theseller, subject to classification and differentiations he mayreasonably establish, makes the same charge on all balanceswithin the specified range and if the percentage when appliedto the median amount within the range does not produce acharge exceeding the charge resulting from applying thatpercentage to the lowest amount within the range by more thaneight percent (8%) of the charge on the median amount.
(3) If the billing cycle is monthly, the charge may not exceed oneand three-fourths percent (1 3/4%) of the amount pursuant to
subsection (2). If the billing cycle is not monthly, the maximumcharge is that percentage which bears the same relation to theapplicable monthly percentage as the number of days in the billingcycle bears to thirty (30). For the purposes of this section, a variationof not more than four (4) days from month to month is "the same dayof the billing cycle."
(4) Notwithstanding subsection (3), if there is an unpaid balanceon the date as of which the credit service charge is applied, the sellermay contract for and receive a charge not exceeding fifty cents($.50), if the billing cycle is monthly or longer, or the pro rata part offifty cents ($.50) which bears the same relation to fifty cents ($.50)as the number of days in the billing cycle bears to thirty (30) if thebilling cycle is shorter than monthly.
(Formerly: Acts 1971, P.L.366, SEC.3.) As amended by Acts 1981,P.L.219, SEC.2; Acts 1982, P.L.150, SEC.1.
IC 24-4.5-2-208
Advances to perform covenants of buyer
Sec. 208. Advances to Perform Covenants of Buyer _ (1) If theagreement with respect to a consumer credit sale, refinancing, orconsolidation contains covenants by the buyer to perform certainduties pertaining to insuring or preserving collateral and the sellerpursuant to the agreement pays for performance of the duties onbehalf of the buyer, the seller may add the amounts paid to the debt.Within a reasonable time after advancing any sums, he shall state tothe buyer in writing the amount of the sums advanced, any chargeswith respect to this amount, and any revised payment schedule and,if the duties of the buyer performed by the seller pertain to insurance,a brief description of the insurance paid for by the seller includingthe type and amount of coverages. No further information need begiven.
(2) A credit service charge may be made for sums advancedpursuant to subsection (1) at a rate not exceeding the rate stated tothe buyer pursuant to the provisions on disclosure (Part 3) withrespect to the sale, refinancing or consolidation, except that withrespect to a revolving charge account the amount of the advance maybe added to the unpaid balance of the account and the seller maymake a credit service charge not exceeding that permitted by theprovisions on credit service charge for revolving charge accounts(24-4.5-2-207).
(Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-209
Right to prepay; payoff amount; liability for failure to provide;short sale; acknowledgment of offer; acceptance or rejection;acceptance of payment; liability for failure to respond
Sec. 209. (1) Subject to the provisions on rebate upon prepayment(IC 24-4.5-2-210), the buyer may prepay in full the unpaid balanceof a consumer credit sale, refinancing, or consolidation at any timewithout penalty. (2) At the time of prepayment of a credit sale not subject to theprovisions of rebate upon prepayment (IC 24-4.5-2-210), the totalcredit service charge, including the prepaid credit service charge,may not exceed the maximum charge allowed under this chapter forthe period the credit sale was in effect.
(3) The creditor or mortgage servicer shall provide an accuratepayoff of the consumer credit sale to the debtor within ten (10)calendar days after the creditor or mortgage servicer receives thedebtor's written request for the accurate consumer credit sale payoffamount. A creditor or mortgage servicer who fails to provide theaccurate consumer credit sale payoff amount is liable for:
(A) one hundred dollars ($100) if an accurate consumercredit sale payoff amount is not provided by the creditor ormortgage servicer within ten (10) calendar days after thecreditor or mortgage servicer receives the debtor's firstwritten request; and
(B) the greater of:
(i) one hundred dollars ($100); or
(ii) the credit service charge that accrues on the sale fromthe date the creditor or mortgage servicer receives the firstwritten request until the date on which the accurateconsumer credit sale payoff amount is provided;
if an accurate consumer credit sale payoff amount is notprovided by the creditor or mortgage servicer within ten (10)calendar days after the creditor or mortgage servicer receivesthe debtor's second written request, and the creditor ormortgage servicer failed to comply with clause (A).
A liability under this subsection is an excess charge underIC 24-4.5-5-202.
(4) As used in this subsection, "mortgage transaction" means aconsumer credit sale in which a mortgage, deed of trust, or a landcontract that constitutes a lien is created or retained against landupon which there is a dwelling that is or will be used by the debtorprimarily for personal, family, or household purposes. Thissubsection applies to a mortgage transaction with respect to whichany installment or minimum payment due is delinquent for at leastsixty (60) days. The creditor, servicer, or the creditor's agent shallacknowledge a written offer made in connection with a proposedshort sale not later than ten (10) business days after the date of theoffer if the offer complies with the requirements for a qualifiedwritten request set forth in 12 U.S.C. 2605(e)(1)(B). The creditor,servicer, or creditor's agent is required to acknowledge a writtenoffer made in connection with a proposed short sale from a thirdparty acting on behalf of the debtor only if the debtor has providedwritten authorization for the creditor, servicer, or creditor's agent todo so. Not later than thirty (30) business days after receipt of an offerunder this subsection, the creditor, servicer, or creditor's agent shallrespond to the offer with an acceptance or a rejection of the offer.Payment accepted by a creditor, servicer, or creditor's agent inconnection with a short sale constitutes payment in full satisfaction
of the mortgage transaction unless the creditor, servicer, or creditor'sagent obtains:
(a) the following statement: "The debtor remains liable for anyamount still owed under the mortgage transaction."; or
(b) a statement substantially similar to the statement set forth insubdivision (a);
acknowledged by the initials or signature of the debtor, on or beforethe date on which the short sale payment is accepted. As used in thissubsection, "short sale" means a transaction in which the propertythat is the subject of a mortgage transaction is sold for an amountthat is less than the amount of the debtor's outstanding obligationunder the mortgage transaction. A creditor or mortgage servicer thatfails to respond to an offer within the time prescribed by thissubsection is liable in accordance with 12 U.S.C. 2605(f) in anyaction brought under that section.
(Formerly: Acts 1971, P.L.366, SEC.3.) As amended by P.L.23-2000,SEC.5; P.L.63-2001, SEC.2 and P.L.134-2001, SEC.2;P.L.145-2008, SEC.24; P.L.35-2010, SEC.44.
IC 24-4.5-2-210
Rebate upon prepayment
Sec. 210. Rebate upon Prepayment _ (1) Except as provided insubsection (2), upon prepayment in full of the unpaid balance of aprecomputed consumer credit sale, refinancing, or consolidation, anamount not less than the unearned portion of the credit servicecharge calculated according to this section shall be rebated to thebuyer. If the rebate required is less than one dollar ($1), no rebateneed be made.
(2) Upon prepayment in full of a consumer credit sale,refinancing, or consolidation, other than one pursuant to a revolvingcharge account, if the credit service charge then earned is less thanany permitted minimum credit service charge (IC 24-4.5-2-201(6))contracted for, whether or not the sale, refinancing, or consolidationis precomputed, the seller may collect or retain the minimum charge,as if earned, not exceeding the credit service charge contracted for.
(3) The unearned portion of the credit service charge is a fractionof the credit service charge of which the numerator is the sum of theperiodic balances scheduled to follow the computational period inwhich prepayment occurs, and the denominator is the sum of allperiodic balances under either the sale agreement or, if the balanceowing resulted from a refinancing (IC 24-4.5-2-205) or aconsolidation (IC 24-4.5-2-206), under the refinancing agreement orconsolidation agreement.
(4) In this section:
(a) "periodic balance" means the amount scheduled to beoutstanding on the last day of a computational period beforededucting the payment, if any, scheduled to be made on thatday;
(b) "computational period" means one (1) month if one-half(1/2) or more of the intervals between scheduled payments
under the agreement is one (1) month or more, and otherwisemeans one (1) week;
(c) the "interval" to the due date of the first scheduledinstallment or the final scheduled payment date is measuredfrom the date of a sale, refinancing, or consolidation, or anylater date prescribed for calculating maximum credit servicecharges (IC 24-4.5-2-201(4)) and includes either the first or lastday of the interval; and
(d) if the interval to the due date of the first scheduledinstallment does not exceed one (1) month by more than fifteen(15) days when the computational period is one (1) month, oreleven (11) days when the computational period is one (1)week, the interval shall be considered as one (1) computationalperiod.
(5) This subsection applies only if the schedule of payments is notregular.
(a) If the computational period is one (1) month and:
(i) if the number of days in the interval to the due date of thefirst scheduled installment is less than one (1) month bymore than five (5) days, or more than one (1) month by morethan five (5) but not more than fifteen (15) days, theunearned credit service charge shall be increased by anadjustment for each day by which the interval is less thanone (1) month and, at the option of the seller, may bereduced by an adjustment for each day by which the intervalis more than one (1) month; the adjustment for each dayshall be one-thirtieth (1/30) of that part of the credit servicecharge earned in the computational period prior to the duedate of the first scheduled installment assuming that periodto be one (1) month; and
(ii) if the interval to the final scheduled payment date is anumber of computational periods plus an additional numberof days less than a full month, the additional number of daysshall be considered a computational period only if sixteen(16) days or more. This subparagraph applies whether or notclause (i) applies.
(b) Notwithstanding paragraph (a), if the computational periodis one (1) month, the number of days in the interval to the duedate of the first installment exceeds one (1) month by not morethan fifteen (15) days, and the schedule of payments isotherwise regular, the seller, at the seller's option, may excludethe extra days and the charge for the extra days in computingthe unearned credit service charge; but if the seller does so anda rebate is required before the due date of the first scheduledinstallment, the seller shall compute the earned charge for eachelapsed day as one-thirtieth (1/30) of the amount the earnedcharge would have been if the first interval had been one (1)month.
(c) If the computational period is one (1) week and:
(i) if the number of days in the interval to the due date of this
first scheduled installment is less than five (5) days or morethan nine (9) days but not more than eleven (11) days, theunearned credit service charge shall be increased by anadjustment for each day by which the interval is less thanseven (7) days and, at the option of the seller, may bereduced by an adjustment for each day by which the intervalis more than seven (7) days; the adjustment for each dayshall be one-seventh (1/7) of that part of the credit servicecharge earned in the computational period prior to the duedate of the first scheduled installment assuming that periodto be one (1) week; and
(ii) if the interval to the final scheduled payment date is anumber of computational periods plus an additional numberof days less than a full week, the additional number of daysshall be considered a computational period only if five (5)days or more. This subparagraph applies whether or notsubparagraph (i) applies.
(6) If a deferral (IC 24-4.5-2-204) has been agreed to, theunearned portion of the credit service charge shall be computedwithout regard to the deferral. The amount of deferral charge earnedat the date of prepayment shall also be calculated. If the deferralcharge earned is less than the deferral charge paid, the differenceshall be added to the unearned portion of the credit service charge.If any part of a deferral charge has been earned but has not been paid,that part shall be subtracted from the unearned portion of the creditservice charge or shall be added to the unpaid balance.
(7) This section does not preclude the collection or retention bythe seller of delinquency charges (IC 24-4.5-2-203, repealed in1994).
(8) If the maturity is accelerated for any reason and judgment isobtained, the buyer is entitled to the same rebate as if payment hadbeen made on the date judgment is entered.
(9) Upon prepayment in full of a consumer credit sale by theproceeds of consumer credit insurance (IC 24-4.5-4-103), the buyeror the buyer's estate shall pay the same credit service charge orreceive the same rebate as though the buyer had prepaid theagreement on the date the proceeds of the insurance are paid to theseller, but no later than ten (10) business days after satisfactory proofof loss is furnished to the seller. This subsection applies whether ornot the credit sale is precomputed.
(10) Upon prepayment in full of a transaction with a term of morethan sixty-one (61) months, the unearned part of the credit servicecharge shall be computed by applying the disclosed annualpercentage rate that would yield the credit service charge originallycontracted for to the unpaid balances of the amount financed for thefull computational periods following the prepayment, as originallyscheduled or as deferred.
(Formerly: Acts 1971, P.L.366, SEC.3.) As amended by P.L.14-1992,SEC.18; P.L.122-1994, SEC.14; P.L.2-1995, SEC.91; P.L.176-1996,SEC.4.
(Part 3. Disclosure)
IC 24-4.5-2-301
Disclosures required by Federal Consumer Credit Protection Act
Sec. 301. (1) For purposes of this section, "consumer credit sale"includes the sale of an interest in land which is a first lien mortgagetransaction if the sale is otherwise a consumer credit sale (IC24-4.5-1-301.5(8)).
(2) The seller shall disclose to the buyer to whom credit isextended with respect to a consumer credit sale, and the lessor shalldisclose to the lessee with respect to a consumer lease, theinformation required by the Federal Consumer Credit Protection Act.
(3) For purposes of subsection (2), disclosures shall not berequired on a consumer credit sale if the transaction is exempt fromthe Federal Consumer Credit Protection Act.
(Formerly: Acts 1971, P.L.366, SEC.3.) As amended by Acts 1981,P.L.218, SEC.4; P.L.247-1983, SEC.7; P.L.45-1995, SEC.6;P.L.35-2010, SEC.45.
IC 24-4.5-2-302
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-303
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-304
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-305
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-306
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-307
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-308
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-309
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-310
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-311
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-312
Repealed
(Repealed by P.L.247-1983, SEC.26.)
(Part 4. Limitations on Agreements and Practices)
IC 24-4.5-2-401
Scope
Sec. 401. Scope _ This Part applies to consumer credit sales andconsumer leases.
(Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-402
Use of multiple agreements
Sec. 402. Use of Multiple Agreements _ A seller may not usemultiple agreements with intent to obtain a higher credit servicecharge than would otherwise be permitted by this Article or to avoiddisclosure of an annual percentage rate pursuant to the provisions ondisclosure and advertising (Part 3). The excess amount of creditservice charge provided for in agreements in violation of this sectionis an excess charge for the purposes of the provisions on the effectof violations on rights of parties (IC 24-4.5-5-202) and the provisionson civil actions by the department (IC 24-4.5-6-113).
(Formerly: Acts 1971, P.L.366, SEC.3.) As amended by P.L.14-1992,SEC.19.
IC 24-4.5-2-403
Repealed
(Repealed by P.L.122-1994, SEC.122 and P.L.129-1994, SEC.3.)
IC 24-4.5-2-404
Repealed
(Repealed by P.L.45-1995, SEC.33.)
IC 24-4.5-2-405
Balloon payments
Sec. 405. (1) With respect to a consumer credit sale, other thanone pursuant to a revolving charge account or one on which onlycredit service charges are payable before the time that the finalscheduled payment is due, if any scheduled payment is more thantwice as large as the average of earlier scheduled payments, the buyerhas the right to refinance the amount of that payment at the time it is
due without penalty. The terms of the refinancing shall be no lessfavorable to the buyer than the terms of the original sale. This sectiondoes not apply to the extent that the payment schedule is adjusted tothe seasonal or irregular income of the buyer.
(2) For the purposes of this section, "terms of the refinancing"means:
(a) in the case of a fixed-rate consumer credit sale, theindividual payment amounts, the charges as a result of defaultby the buyer, and the rate of the credit service charge; and
(b) in the case of a variable rate consumer credit sale, themethod used to determine the individual payment amounts, thecharges as a result of default by the buyer, the method used todetermine the rate of the credit service charge, thecircumstances under which the rate of the credit service chargemay increase, and any limitations on the increase in the rate ofthe credit service charge.
(Formerly: Acts 1971, P.L.366, SEC.3.) As amended byP.L.247-1983, SEC.10.
IC 24-4.5-2-406
Restriction on liability in consumer lease
Sec. 406. The obligation of a lessee upon expiration of aconsumer lease may not exceed three (3) times the average paymentallocable to a monthly period under the lease. This limitation doesnot apply to charges for damages to the leased property or for otherdefault.
(Formerly: Acts 1971, P.L.366, SEC.3.) As amended byP.L.247-1983, SEC.11; P.L.45-1995, SEC.7.
IC 24-4.5-2-407
Security interests
Sec. 407. (1) With respect to a consumer credit sale, a seller maytake a security interest in the property sold. In addition, a seller maytake a security interest in goods upon which services are performedor in which goods sold are installed or to which they are annexed, orin land to which the goods are affixed or which is maintained,repaired or improved as a result of the sale of the goods or services,if, in the case of a subordinate lien mortgage transaction, the debtsecured is one thousand dollars ($1,000) or more, or, in the case ofa security interest in goods the debt secured is three hundred dollars($300) or more. Except as provided with respect to cross-collateral(IC 24-4.5-2-408), a seller may not otherwise take a security interestin property of the buyer to secure the debt arising from a consumercredit sale.
(2) With respect to a consumer lease, a lessor may not take asecurity interest in property of the lessee to secure the debt arisingfrom the lease.
(3) A security interest taken in violation of this section is void.
(4) The amounts of one thousand dollars ($1,000) and threehundred dollars ($300) in subsection (1) are subject to change
pursuant to the provisions on adjustment of dollar amounts (IC24-4.5-1-106).
(Formerly: Acts 1971, P.L.366, SEC.3.) As amended byP.L.247-1983, SEC.12; P.L.35-2010, SEC.46.
IC 24-4.5-2-408
Cross-collateral
Sec. 408. Cross-Collateral _ (1) In addition to contracting for asecurity interest pursuant to the provisions on security in sales orleases (24-4.5-2-407), a seller in a consumer credit sale may securethe debt arising from the sale by contracting for a security interest inother property if as a result of a prior sale the seller has an existingsecurity interest in the other property. The seller may also contractfor a security interest in the property sold in the subsequent sale assecurity for the previous debt.
(2) If the seller contracts for a security interest in other propertypursuant to this section, the rate of credit service charge thereafter onthe aggregate unpaid balances so secured may not exceed thatpermitted if the balances so secured were consolidated pursuant tothe provisions on consolidation involving a refinancing (subsection(1) of 24-4.5-2-206). The seller has a reasonable time after socontracting to make any adjustments required by this section."Seller" in this section does not include an assignee not related to theoriginal seller.
(Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-409
Debt secured by cross-collateral
Sec. 409. (1) If debts arising from two (2) or more consumercredit sales, other than sales pursuant to a revolving charge account,are secured by cross-collateral (IC 24-4.5-2-408) or consolidated intoone (1) debt payable on a single schedule of payments, and the debtis secured by security interests taken with respect to one (1) or moreof the sales, payments received by the seller after the taking of thecross-collateral or the consolidation are deemed, for the purpose ofdetermining the amount of the debt secured by the various securityinterests, to have been first applied to the payment of the debtsarising from the sales first made. To the extent debts are paidaccording to this section, security interests in items of propertyterminate as the debt originally incurred with respect to each item ispaid.
(2) Payments received by the seller upon a revolving chargeaccount are deemed, for the purpose of determining the amount ofthe debt secured by the various security interests, to have beenapplied first to the payment of credit service charges in the order oftheir entry to the account and then to the payment of debts in theorder in which the entries to the account showing the debts weremade.
(3) If the debts consolidated arose from two (2) or more salesmade on the same day, payments received by the seller are deemed,
for the purpose of determining the amount of the debts secured bythe various security interests, to have been applied first to thepayment of the smallest debt.
(Formerly: Acts 1971, P.L.366, SEC.3.) As amended byP.L.247-1983, SEC.13.
IC 24-4.5-2-410
No assignment of earnings
Sec. 410. No Assignment of Earnings _ A seller or lessor maynot take an assignment of earnings of the buyer or lessee for paymentor as security for payment of a claim, whether arising out of aconsumer credit sale, consumer lease or otherwise. An assignment ofearnings in violation of this section is unenforceable by the assigneesof the earnings and revocable by the buyer or lessee. This sectiondoes not prohibit an employee from authorizing deductions from hisearnings if the authorization is revocable and is otherwise permittedby law.
(Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-411
Referral sales
Sec. 411. Referral Sales _ With respect to a consumer credit saleor consumer lease the seller or lessor may not give or offer to give arebate or discount or otherwise pay or offer to pay value to the buyeror lessee as an inducement for a sale or lease in consideration of hisgiving to the seller or lessor the names of prospective purchasers orlessees, or otherwise aiding the seller or lessor in making a sale orlease to another person, if the earning of the rebate, discount or othervalue is contingent upon the occurrence of an event subsequent to thetime the buyer or lessee agrees to buy or lease. If a buyer or lessee isinduced by a violation of this section to enter into a consumer creditsale or consumer lease, the agreement is unenforceable by the selleror lessor and the buyer or lessee, at his option, may rescind theagreement or retain the goods delivered and the benefit of anyservices performed, without any obligation to pay for them.
(Formerly: Acts 1971, P.L.366, SEC.3.) As amended by Acts 1978,P.L.127, SEC.1.
IC 24-4.5-2-412
Notice of assignment
Sec. 412. Notice of Assignment _ The buyer or lessee isauthorized to pay the original seller or lessor until the buyer or lesseereceives notification of assignment of the rights to payment pursuantto a consumer credit sale or consumer lease and that payment is to bemade to the assignee. A notification which does not reasonablyidentify the rights assigned is ineffective. If requested by the buyeror lessee, the assignee must seasonably furnish reasonable proof thatthe assignment has been made and unless he does so the buyer orlessee may pay the seller or lessor.
(Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-413
Attorney's fees
Sec. 413. Attorney's Fees _ With respect to a consumer creditsale or consumer lease the agreement may provide for the paymentby the buyer or lessee of reasonable attorney's fees and after defaultand referral to an attorney not a salaried employee of the seller, or ofthe lessor or his assignee. A provision in violation of this section isunenforceable.
(Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-414
Limitation on default charges
Sec. 414. Limitation on Default Charges _ Except for reasonableexpenses incurred in realizing on a security interest, the agreementwith respect to a consumer credit sale may not provide for anycharges as a result of default by the buyer other than those authorizedby this Article. A provision in violation of this section isunenforceable.
(Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-415
Authorization to confess judgment prohibited
Sec. 415. Authorization to Confess Judgment Prohibited - A buyeror lessee may not authorize any person to confess judgment on aclaim arising out of a consumer credit sale or consumer lease. Anauthorization in violation of this section is void.
(Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-416
Repealed
(Repealed by P.L.122-1994, SEC.122.)
(Part 5. Home Solicitation Sales)
IC 24-4.5-2-501
"Home solicitation sale"
Sec. 501. Definition: "Home Solicitation Sale" _ "Homesolicitation sale" means a consumer credit sale of goods, other thanfarm equipment, or services in which:
(1) the seller or a person acting for him engages in a personalsolicitation of the sale, including a solicitation over thetelephone, at a residence of the buyer and the buyer's agreementor offer to purchase is there given to the seller or a personacting for him; or
(2) the seller or his agent, solicits a sale in a city or town inwhich the seller does not have a permanent businessestablishment, through mailings, advertisements, or telephonecalls, which require the buyer to meet the seller or his agent ata place other than the seller's permanent business establishment.
It does not include a sale made pursuant to a preexisting revolving
charge account, or a sale made pursuant to prior negotiationsbetween the parties at a business establishment at a fixed locationwhere goods or services are offered or exhibited for sale.
(Formerly: Acts 1971, P.L.366, SEC.3.) As amended by Acts 1979,P.L.237, SEC.1.
IC 24-4.5-2-502
Buyer's right to cancel
Sec. 502. Buyer's Right to Cancel _ The requirements of 16 CFR429 must be met in regard to the following provisions concerninghome solicitation sales:
(1) Period within which cancellation may be made by the buyer.
(2) Notice of cancellation.
(3) Form of cancellation.
(4) Form of agreement or offer to purchase.
(5) Statement of buyer's rights.
(6) Restoration of down payment.
(7) Retention of cancellation fee.
(8) Duty of buyer.
(9) Any other relevant requirements in 16 CFR 429.
(Formerly: Acts 1971, P.L.