IC 28-1-13
    Chapter 13. Loans and Investments of Banks and TrustCompanies

IC 28-1-13-1
Repealed
    (Repealed by P.L.14-1992, SEC.165.)

IC 28-1-13-1.1
"Capital and surplus" or "unimpaired capital and unimpairedsurplus" defined
    Sec. 1.1. As used in this chapter, "capital and surplus" or"unimpaired capital and unimpaired surplus" has the meaning setforth in 12 CFR 32.2.
As added by P.L.14-1992, SEC.83. Amended by P.L.176-1996,SEC.13; P.L.213-2007, SEC.42; P.L.217-2007, SEC.40.

IC 28-1-13-1.2
"Loans and extensions of credit" defined
    Sec. 1.2. As used in this chapter, "loans and extensions of credit"has the meaning set forth in 12 CFR 32.2.
As added by P.L.14-1992, SEC.84. Amended by P.L.90-2008,SEC.25.

IC 28-1-13-1.3
"Person" defined
    Sec. 1.3. As used in this chapter, "person" includes an individual,a sole proprietorship, a partnership, a joint venture, an association,a trust, an estate, a business trust, a limited liability company, acorporation, a sovereign government, or an agency, aninstrumentality, or a political subdivision thereof, or any similarentity or organization.
As added by P.L.14-1992, SEC.85. Amended by P.L.8-1993,SEC.439.

IC 28-1-13-1.4
Repealed
    (Repealed by P.L.176-1996, SEC.35.)

IC 28-1-13-1.5
Limit on total loans and extensions of credit to one borrower
    Sec. 1.5. (a) The total loans and extensions of credit by a bank toa person outstanding at one (1) time and not fully secured, asdetermined in a manner consistent with subsection (b), by collateralhaving a market value at least equal to the amount of the loan orextension of credit may not exceed fifteen percent (15%) of theunimpaired capital and unimpaired surplus of the bank.
    (b) The total loans and extensions of credit by a bank to a personoutstanding at one (1) time and fully secured by readily marketablecollateral having a market value, as determined by reliable and

continuously available price quotations, at least equal to the amountof the funds outstanding may not exceed ten percent (10%) of theunimpaired capital and unimpaired surplus of the bank. Thelimitation in this subsection is separate from and in addition to thelimitation contained in subsection (a).
As added by P.L.14-1992, SEC.87.

IC 28-1-13-1.6
Loans or extensions of credit not subject to limitations
    Sec. 1.6. The limitations contained in section 1.5 of this chapterare subject to the following exceptions:
        (1) Loans or extensions of credit arising from the discount ofcommercial or business paper evidencing an obligation to theperson negotiating it with recourse are not subject to anylimitation based on capital and surplus.
        (2) The purchase of bankers' acceptances of the kind describedin 12 U.S.C. 372 and issued by other banks are not subject toany limitation based on capital and surplus.
        (3) Loans and extensions of credit secured by bills of lading,warehouse receipts, or similar documents transferring orsecuring title to readily marketable staples are subject to alimitation of thirty-five percent (35%) of capital and surplus inaddition to the general limitations if the market value of thestaples securing each additional loan or extension of credit at alltimes equals or exceeds one hundred fifteen percent (115%) ofthe outstanding amount of the loan or extension of credit. Thestaples shall be fully covered by insurance whenever it iscustomary to insure such staples.
        (4) Loans or extensions of credit secured by bonds, notes,certificates of indebtedness, or Treasury bills of the UnitedStates or by other such obligation fully guaranteed as toprincipal and interest by the United States are not subject to anylimitation based on capital and surplus.
        (5) Loans or extensions of credit to or secured by unconditionaltakeout commitment or guarantees of any department, agency,bureau, board, commission, or establishment of the UnitedStates or any corporation wholly owned directly or indirectly bythe United States are not subject to any limitation based oncapital and surplus.
        (6) Loans or extensions of credit secured by a segregateddeposit account in the lending bank are not subject to anylimitation based on capital and surplus.
        (7) Loans or extensions of credit to any financial institution orto any receiver, conservator, superintendent of banks, or otheragent in charge of the business and property of the financialinstitution, when such loans or extensions of credit areapproved by the director, are not subject to any limitation basedon capital and surplus.
As added by P.L.14-1992, SEC.88.
IC 28-1-13-1.7
Limit on total consumer credit obligation of one borrower
    Sec. 1.7. (a) Loans and extensions of credit arising from thediscount of negotiable or nonnegotiable installment consumer paperthat carries a full recourse endorsement or unconditional guaranteeby the person transferring the paper is subject under this section toa maximum limitation equal to twenty-five percent (25%) of thecapital and surplus, notwithstanding the collateral requirements setforth in section 1.5(b) of this chapter.
    (b) If the bank's files or the knowledge of the bank's officers of thefinancial condition of each maker of such consumer paper isreasonably adequate, and an officer of the bank designated for thatpurpose by the board of directors of the bank certifies in writing thatthe bank is relying primarily upon the responsibility of each makerfor payment of the loans or extensions of credit and not upon any fullor partial recourse endorsement or guarantee by the transferor, thelimitations of this section as to the loans or extensions of credit ofeach such maker shall be the sole applicable loan limitations.
As added by P.L.14-1992, SEC.89.

IC 28-1-13-1.8
Limit on obligations secured by documents or instrumentscovering livestock; dealer discount of paper securing sale of dairycattle with payment guaranteed by seller
    Sec. 1.8. (a) Loans and extensions of credit secured by shippingdocuments or instruments transferring or securing title coveringlivestock or giving a lien on livestock when the market value of thelivestock securing the obligation is not at any time less than onehundred fifteen percent (115%) of the face amount of the notecovered are subject under this section, notwithstanding the collateralrequirements set forth in section 1.5(b) of this chapter, to a maximumlimitation equal to twenty-five percent (25%) of the capital andsurplus.
    (b) Loans and extensions of credit that arise from the discount bydealers in dairy cattle of paper given in payment for dairy cattle,which paper carries a full recourse endorsement or unconditionalguarantee of the seller and that are secured by the cattle being sold,are subject under this section, notwithstanding the collateralrequirements set forth in section 1.5(b) of this chapter, to a limitationof twenty-five percent (25%) of the capital and surplus.
As added by P.L.14-1992, SEC.90. Amended by P.L.141-2005,SEC.7.

IC 28-1-13-2
Repealed
    (Repealed by P.L.14-1992, SEC.165.)

IC 28-1-13-3
Repealed
    (Repealed by P.L.14-1992, SEC.165.)
IC 28-1-13-4
Repealed
    (Repealed by P.L.14-1992, SEC.165.)

IC 28-1-13-5
Repealed
    (Repealed by P.L.14-1992, SEC.165.)

IC 28-1-13-6
Extension of credit to officers, directors, or principal shareholders;compliance with federal restrictions
    Sec. 6. Any bank or trust company may extend credit to an officer,a director, or a principal shareholder in accordance with therestrictions and provisions of Regulation O of the Board ofGovernors of the Federal Reserve System (12 CFR 215).
(Formerly: Acts 1933, c.40, s.200; Acts 1935, c.5, s.36; Acts 1937,c.33, s.28; Acts 1943, c.148, s.1; Acts 1955, c.25, s.1; Acts 1969,c.280, s.5.) As amended by Acts 1977, P.L.291, SEC.1; Acts 1978,P.L.2, SEC.2808; Acts 1981, P.L.250, SEC.1; P.L.265-1983, SEC.2;P.L.144-1984, SEC.1; P.L.14-1992, SEC.91.

IC 28-1-13-7
Repealed
    (Repealed by P.L.33-1991, SEC.57.)

IC 28-1-13-7.1
State chartered banks; real estate loans
    Sec. 7.1. (a) As used in this section, "federally chartered bank"means a bank that was incorporated under 12 U.S.C. 21 et seq. andis doing business in Indiana.
    (b) As used in this section, "rollover mortgage" means a loan that:
        (1) is secured by a first mortgage on real estate improved by:
            (A) a dwelling for one (1) to four (4) families; or
            (B) a combination home and business building; and
        (2) may be subject to rate adjustments at regularly scheduledtimes.
    (c) As used in this section, "state chartered bank" means a bankthat was incorporated under the laws of Indiana and is doing businessin Indiana. The term includes a savings bank organized under thelaws of Indiana.
    (d) A state chartered bank may make, arrange, purchase, or sellloans or extensions of credit secured by liens or interests in realestate as:
        (1) may be so made, arranged, purchased, or sold by a federallychartered bank under a federal law or regulation; or
        (2) prescribed by order of the department or by a rule adoptedby the department under IC 4-22-2.
    (e) In addition to loans authorized by subsection (d), a statechartered bank may make rollover mortgage loans. A rollovermortgage loan made by a state chartered bank is subject to the

following requirements and restrictions:
        (1) At each scheduled adjustment time, if the loan is not then indefault, the lender shall make rate adjustments available for theamount of the outstanding loan for the remaining term of theloan.
        (2) Any adjustment in the loan must be made withoutadministrative charges to the borrower.
        (3) Scheduled adjustments of the loan must be at least one (1)year apart.
        (4) The lender may not charge any penalty or other assessmentfor the prepayment of the loan by the borrower at the time ofany adjustment.
        (5) At each scheduled adjustment time, the lender and theborrower may agree to increase or decrease the interest rateapplicable to the outstanding balance of the loan.
        (6) At the option of the lender, the borrower may be granted theoption to extend the amortization period for purposes ofcalculating monthly payments on the loan in accordance withthe following rules:
            (A) The extension of the amortization period may equal upto one-third (1/3) of the original amortization period,irrespective of whether this extends the amortization periodbeyond thirty (30) years.
            (B) To the extent of any extension of the amortizationperiod, the amortization period will be reduced upon asubsequent downward adjustment in the interest rate.
    (f) The department may adopt an emergency rule underIC 4-22-2-37.1 to implement this section.
As added by P.L.33-1991, SEC.16. Amended by P.L.42-1993,SEC.30; P.L.45-1995, SEC.20.

IC 28-1-13-8
Loans on security of own shares; acquisition of shares; disposition
    Sec. 8. No bank or trust company shall make any loan or discounton the security of the shares of its own capital stock, nor be thepurchaser or holder of any such shares, unless such security orpurchase shall be necessary to prevent loss under a debt previouslycontracted in good faith; and stock so purchased or acquired shall,within six (6) months from the time of its purchase, be sold ordisposed of at public or private sale, unless otherwise ordered by thedepartment.
(Formerly: Acts 1933, c.40, s.202.)

IC 28-1-13-9
Repealed
    (Repealed by P.L.42-1993, SEC.103.)

IC 28-1-13-10
Officer and others accepting compensation for procuring loan,purchase, or discount; violations    Sec. 10. Except as otherwise provided, an officer, director, owner,partner, employee, or attorney of any bank or trust company whostipulates for, receives, or consents or agrees to receive, any fee,commission, gift, or thing of value, from any person, for the purposeof procuring or endeavoring to procure for any person any loan fromor the purchase or discount of any paper, note, draft, check, or bill ofexchange by the bank or trust company, commits a Class Amisdemeanor.
(Formerly: Acts 1933, c.40, s.204.) As amended by Acts 1978, P.L.2,SEC.2809.

IC 28-1-13-11
Reduction of existing obligations held in excess of limitations
    Sec. 11. Except as otherwise provided in this chapter, any bank ortrust company which holds obligations of indebtedness in violationof the limitations prescribed in this chapter shall, not later than July1, 1936, cause the amount of such obligations to conform to thelimitations prescribed by this article and by the provisions of thischapter. The department may, in its discretion, extend the time foreffecting such conformity, in individual instances, if the interests ofthe depositors will be protected and served by such extension. Uponthe failure of any bank or trust company to comply with suchlimitations, in accordance with the terms of this section or inaccordance with any order of the department with relation to suchlimitations, the department may declare that such bank or trustcompany is conducting its business in an unauthorized or unsafemanner and proceed in accordance with IC 28-1-3.1-2.
(Formerly: Acts 1933, c.40, s.205.) As amended by P.L.263-1985,SEC.68.

IC 28-1-13-12
Loans or credit to student loan marketing association; applicabilityof capital and surplus limitation
    Sec. 12. Loans or extensions of credit to the Student LoanMarketing Association are not subject to any limitation based oncapital and surplus.
As added by P.L.14-1992, SEC.92.

IC 28-1-13-13
Applicability of federal regulations
    Sec. 13. The department may apply the provisions of 12 CFR 32in the application and administration of this chapter.
As added by P.L.14-1992, SEC.93.