CHAPTER 18.2. EXAMINATION OF AFFILIATES
IC 28-1-18.2
Chapter 18.2. Examination of Affiliates
IC 28-1-18.2-1
"Affiliate" defined; scope of term
Sec. 1. (a) As used in this chapter, "affiliate" means any of thefollowing:
(1) Any company that controls a bank and any other companythat is controlled by the company that controls a bank.
(2) A bank subsidiary of a bank.
(3) Any company:
(A) that is controlled directly or indirectly, by a trust orotherwise, by or for the benefit of shareholders whobeneficially or otherwise control, directly or indirectly, bytrust or otherwise, the bank or any company that controls thebank; or
(B) in which a majority of its directors or trustees constitutea majority of the persons holding any such office with abank or any company that controls the bank;
(4) Any:
(A) company, including a real estate investment trust, that issponsored and advised on a contractual basis by the bank orany subsidiary or affiliate of the bank; or
(B) investment company with respect to which a bank or anyaffiliate of a bank is an investment advisor (as defined insection 2(a)(20) of the Investment Company Act of 1940 (15U.S.C. 80a)).
(5) Any company that the department determines by regulationor order to have a relationship with the bank or any subsidiaryor affiliate of the bank, such that covered transactions by thebank or its subsidiary with that company may be affected by therelationship to the detriment of the bank or its subsidiary.
(b) The term "affiliate" does not include the following:
(1) Any company, other than a bank, that is a subsidiary of abank, unless a determination is made under section 1(a)(5) ofthis chapter not to exclude such subsidiary company from thedefinition of affiliate.
(2) Any company engaged solely in holding the premises of thebank.
(3) Any company engaged solely in conducting a safe depositbusiness.
(4) Any company engaged solely in holding obligations of theUnited States or its agencies or obligations fully guaranteed bythe United States or its agencies as to principal and interest.
(5) Any company where control results from the exercise ofrights arising out of a bona fide debt previously contracted, butonly for the period of time specifically authorized underapplicable state or federal law or regulation, or in the absenceof such law or regulation, for a period of two (2) years from thedate of the exercise of such rights or the effective date of the
act, whichever date is later, subject, upon application, toauthorization by the department for good cause shown ofextensions in the aggregate shall not exceed three (3) years.
As added by P.L.33-1991, SEC.18. Amended by P.L.14-1992,SEC.94.
IC 28-1-18.2-1.1
"Company" defined
Sec. 1.1. As used in this chapter, "company" means a corporation,limited liability company, partnership, business trust, association, orsimilar organization. Unless specifically excluded, the term includesa bank.
As added by P.L.14-1992, SEC.95. Amended by P.L.8-1993,SEC.441.
IC 28-1-18.2-1.2
"Subsidiary" defined
Sec. 1.2. As used in this chapter, "subsidiary" with respect to aspecified company means a company that is controlled by thespecified company.
As added by P.L.14-1992, SEC.96.
IC 28-1-18.2-1.3
Control over another company; fiduciary ownership or control ofshares
Sec. 1.3. (a) A company or shareholder is considered to havecontrol over another company if:
(1) the company or shareholder, directly or indirectly, or actingthrough at least one (1) other person owns, controls, or haspower to vote at least twenty-five percent (25%) of any class ofvoting securities of the other company;
(2) the company or shareholder controls in any manner theelection of a majority of the directors or trustees of the othercompany; or
(3) the department determines, after notice and opportunity forhearing, that the company or shareholder, directly or indirectly,exercises a controlling influence over the management orpolicies of the other company.
(b) Notwithstanding any other provision of this chapter, acompany is not considered to own or control another company byvirtue of its ownership or control of shares in a fiduciary capacity,except as provided in subsection (a)(3) or if the company owning orcontrolling the shares is a business trust.
As added by P.L.14-1992, SEC.97.
IC 28-1-18.2-2
Statement of financial condition; requirements; extension of time;additional statements; penalty for failure to furnish statement
Sec. 2. (a) Within thirty (30) days after receipt of a request fromthe department, a bank or trust company shall furnish to the
department a statement of financial condition of the affiliatesidentified in the request.
(b) The statements furnished under subsection (a) must:
(1) be dated at least six (6) months apart; and
(2) contain the information that in the judgment of thedepartment:
(A) is necessary to disclose fully the relations between theaffiliate and the bank or trust company; and
(B) will enable the department to inform itself as to theeffect of the relations upon the affairs of the bank or trustcompany.
(c) The department may, for good cause shown, extend the timefor furnishing the statements requested under subsection (a).
(d) The department may request additional statements of financialcondition with respect to an affiliate when, in its judgment,additional statements are necessary to obtain a full and completeknowledge of the conditions of the bank or trust company with whichit is affiliated. Additional statements of condition shall be transmittedto the department in the form prescribed by the department.
(e) If a bank or trust company fails to furnish a statement ofcondition of an affiliate that may be required under this article, thatbank or trust company is subject to a penalty of one hundred dollars($100) for each day during which the failure continues. Thedepartment may recover a penalty imposed by this subsection in acourt of competent jurisdiction.
As added by P.L.33-1991, SEC.18.
IC 28-1-18.2-3
Examination; report on failure to comply with department'srecommendations or suggestions
Sec. 3. (a) In making the examination of a bank or trust company,the department shall include an examination of the affairs of all thebank or trust company's affiliates necessary to disclose fully therelations between the bank or trust company and its affiliates, and theeffect of those relations upon the affairs of the bank or trustcompany.
(b) The department may publish the report of its examination ofa bank or trust company, or an affiliate, which has not, within onehundred and twenty (120) days after notification of therecommendations or suggestions of the department, based on theexamination, complied with the recommendations or suggestions tothe department's satisfaction. The department must give the bank ortrust company or the affiliate ninety (90) days notice prior topublication of a report under this subsection.
As added by P.L.33-1991, SEC.18.
IC 28-1-18.2-4
Powers of department; assessment of expenses; penalty for refusalto permit examination
Sec. 4. (a) In making the examination of an affiliate of a bank or
trust company, the department has the same powers with respect tothe examination as are conferred upon it in the examination of theaffairs of a bank or trust company by IC 28-11-3.
(b) The expenses incurred in making examinations of affiliatesmay be assessed by the department upon the affiliates examined, inproportion to the assets or resources held by the affiliates, upon thedays of examination of the various affiliates, and in the manner andat the rate as fixed and prescribed by the department underIC 28-11-3-5.
(c) If an affiliate refuses to pay expenses assessed undersubsection (b), or fails to do so within sixty (60) days after the dateof the assessment, the expenses may be assessed against the affiliatedbank or trust company, and, when so assessed, must be paid by thatbank or trust company.
(d) If an affiliate of a bank or trust company refuses to permit thedepartment to make an examination, the bank or trust company withwhich the affiliate is affiliated is subject to a penalty of not morethan one hundred dollars ($100) for each day that the refusalcontinues. The penalty may be assessed by the department andcollected in the same manner as expenses of examination.
As added by P.L.33-1991, SEC.18.
IC 28-1-18.2-5
Applicability of certain provisions of Federal Reserve Act andregulations; violations
Sec. 5. (a) For purposes of this section, a bank or trust companythat is not a member of the Federal Reserve System is subject toSections 23A and 23B of the Federal Reserve Act (12 U.S.C. 371cor 371c-1) and Federal Reserve Regulation W (12 CFR 223) to thesame extent and in the same manner as though it were a member ofthe Federal Reserve System.
(b) A violation of Section 23A or 23B of the Federal Reserve Act(12 U.S.C. 371c or 371c-1) or Federal Reserve Regulation W (12CFR 223) by a bank or trust company or a subsidiary of eitherconstitutes a violation of this section.
As added by P.L.33-1991, SEC.18. Amended by P.L.141-2005,SEC.8.