CHAPTER 23.5. ELECTRONIC ACTIVITY BY FINANCIAL INSTITUTIONS
IC 28-1-23.5
Chapter 23.5. Electronic Activity by Financial Institutions
IC 28-1-23.5-1
Application of chapter
Sec. 1. This chapter applies to the following financial institutions:
(1) A bank operating under IC 28-1-11.
(2) A credit union operating under IC 28-7-1.
(3) A savings bank operating under IC 28-6.1.
(4) A savings association operating under IC 28-15.
As added by P.L.10-2006, SEC.32 and P.L.57-2006, SEC.32.
IC 28-1-23.5-2
"Electronic activity"
Sec. 2. As used in this chapter, "electronic activity" refers to:
(1) any activity or function that a financial institution performsthrough electronic means or facilities; or
(2) the provision or delivery of any product or service by afinancial institution through the use of electronic technology.
As added by P.L.10-2006, SEC.32 and P.L.57-2006, SEC.32.
IC 28-1-23.5-3
Consistency with safety and soundness standards, consumerprotection laws, and supervisory guidance
Sec. 3. An electronic activity performed by a financial institutionmust be consistent with the following:
(1) Standards used by the department to determine whether afinancial institution is operating or will operate in a safe andsound condition.
(2) State and federal consumer protection laws and regulations.
(3) State or federal supervisory guidance considered necessaryor appropriate by the director.
As added by P.L.10-2006, SEC.32 and P.L.57-2006, SEC.32.
IC 28-1-23.5-4
Electronic activities; statutory authorization; standards
Sec. 4. (a) The director may determine whether an electronicactivity by a financial institution is permitted under:
(1) IC 28-1-11, with respect to a bank;
(2) IC 28-7-1, with respect to a credit union;
(3) IC 28-6.1, with respect to a savings bank;
(4) IC 28-15, with respect to a savings association; or
(5) any other state statute that applies to a financial institutiondescribed in subdivisions (1) through (4).
(b) The director may establish standards or conditions designedto ensure that the electronic activities of financial institutions are:
(1) transacted as intended; and
(2) conducted safely and soundly, in accordance with otherapplicable statutes, regulations, or supervisory policies.
As added by P.L.10-2006, SEC.32 and P.L.57-2006, SEC.32.
IC 28-1-23.5-5
Electronic activity authorized as part of financial institution'sbusiness
Sec. 5. (a) An electronic activity is authorized for a financialinstitution as part of the financial institution's business if the activityis described in:
(1) IC 28-1-11, with respect to a bank;
(2) IC 28-7-1, with respect to a credit union;
(3) IC 28-6.1, with respect to a savings bank;
(4) IC 28-15, with respect to a savings association; or
(5) any other state statute that applies to a financial institutiondescribed in subdivisions (1) through (4).
(b) In determining whether an electronic activity is authorized aspart of a financial institution's business, the director shall considerthe following:
(1) Whether the activity is functionally equivalent to, or alogical outgrowth of, a recognized activity of the type offinancial institution under consideration.
(2) Whether the activity strengthens the financial institution bybenefiting its customers or its business.
(3) Whether the activity involves risks similar in nature to thosealready assumed by the type of financial institution underconsideration.
(4) Whether the activity may be conducted by:
(A) the same, or functionally equivalent type, of federallychartered financial institution; or
(B) the same, or functionally equivalent type, of financialinstitution that:
(i) is organized or reorganized under the laws of anotherstate; and
(ii) does business in Indiana;
under the authority of applicable federal or state statutes,regulations, or supervisory policies.
As added by P.L.10-2006, SEC.32 and P.L.57-2006, SEC.32.
IC 28-1-23.5-6
Electronic activity incidental to financial institution's business
Sec. 6. (a) An electronic activity is authorized for a financialinstitution as incidental to the financial institution's business if theactivity is convenient or useful to an activity that is:
(1) specifically authorized for the type of financial institutionunder consideration; or
(2) otherwise part of the business of the type of financialinstitution under consideration.
(b) In determining whether an electronic activity is authorized asincidental to a financial institution's business, the director mayconsider whether the activity:
(1) facilitates the production or delivery of the financialinstitution's products or services;
(2) enhances the financial institution's ability to sell or market
its products or services;
(3) improves the effectiveness or efficiency of the financialinstitution's operations; or
(4) enables the financial institution to:
(A) use capacity acquired for its operations as a financialinstitution; or
(B) otherwise avoid economic loss or waste.
As added by P.L.10-2006, SEC.32 and P.L.57-2006, SEC.32.
IC 28-1-23.5-7
Evaluation of potential risks; authorization to act
Sec. 7. (a) As used in this section, "potential risks", with respectto a proposed electronic activity by a financial institution, include thefollowing:
(1) Legal risks.
(2) Transactional risks.
(3) Risk of the financial institution's noncompliance withapplicable statutes, regulations, or supervisory policies.
(4) Risk of harm to the financial institution's reputation.
(b) A financial institution's board of directors and executiveofficers are responsible for ensuring that all potential risks areevaluated and taken into account before the financial institutionundertakes any electronic activity. The board of directors and theexecutive officers may not delegate their responsibility under thissubsection to other persons within the financial institution or tooutside parties.
(c) After a financial institution's board of directors and executiveofficers have acted under subsection (b) to conduct an evaluation ofthe potential risks associated with an electronic activity, the financialinstitution may perform, provide, or deliver through electronic meansor facilities any activity, function, product, or service that it isotherwise authorized to perform, provide, or deliver, subject to thischapter and any other applicable statutes, regulations, or supervisorypolicies.
As added by P.L.10-2006, SEC.32 and P.L.57-2006, SEC.32.
IC 28-1-23.5-8
Activities authorized for national banks and federal credit unions
Sec. 8. (a) A financial institution described in section 1(1), 1(3),or 1(4) of this chapter may perform, provide, or deliver throughelectronic means or facilities any activity, function, product, orservice that a national bank is specifically authorized to perform,provide, or deliver under 12 CFR 7.5000 et seq.
(b) A financial institution described in section 1(2) of this chaptermay perform, provide, or deliver through electronic means orfacilities any activity, function, product, or service that a federalcredit union is specifically authorized to perform, provide, or deliverunder Part 721 of the National Credit Union Administration'sregulations (12 CFR 721.1 et seq.).
As added by P.L.10-2006, SEC.32 and P.L.57-2006, SEC.32.
IC 28-1-23.5-9
Performing authorized or required activities through electronicmeans
Sec. 9. A financial institution may perform, provide, or deliverthrough electronic means or facilities any activity, function, product,or service that it is otherwise authorized or required to perform,provide, or deliver by nonelectronic means or facilities, subject to thefollowing:
(1) The approval of the customer or member to or for whom theactivity, function, product, or service is performed, provided, ordelivered.
(2) The:
(A) safety and soundness requirements; and
(B) state or federal supervisory guidance;
that the director would apply if the activity were conducted bynonelectronic means or facilities.
As added by P.L.10-2006, SEC.32 and P.L.57-2006, SEC.32.