IC 23-2-5-1 "Commissioner" defined
Sec. 1. As used in this chapter, "commissioner" refers to the
securities commissioner appointed under IC 23-19-6-1(a). As added by P.L.235-1985, SEC.1. Amended by P.L.27-2007,
SEC.17.
IC 23-2-5-2 "Loan" defined
Sec. 2. As used in this chapter, "loan" means any agreement to
advance money or property in return for the promise to make
payments for the money or property. As added by P.L.235-1985, SEC.1.
IC 23-2-5-3 Definitions
Sec. 3. (a) As used in this chapter, "loan broker license" means a
license issued by the commissioner authorizing a person to engage
in the loan brokerage business.
(b) As used in this chapter, "licensee" means a person that is
issued a license under this chapter.
(c) As used in this chapter, "loan broker" means any person who,
in return for any consideration from any source procures, attempts to
procure, or assists in procuring, a residential mortgage loan from a
third party or any other person, whether or not the person seeking the
loan actually obtains the loan. "Loan broker" does not include:
(1) any supervised financial organization (as defined in
IC 26-1-4-102.5), including a bank, savings bank, trust
company, savings association, or credit union;
(2) any other financial institution that is:
(A) regulated by any agency of the United States or any
state; and
(B) regularly actively engaged in the business of making
consumer loans that are not secured by real estate or taking
assignment of consumer sales contracts that are not secured
by real estate;
(3) any insurance company;
(4) any person arranging financing for the sale of the person's
product; or
(5) a creditor that is licensed under IC 24-4.4-2-402.
(d) As used in this chapter, "loan brokerage business" means a
person acting as a loan broker.
(e) As used in this chapter, "mortgage loan origination activities"
means performing any of the following activities for compensation
or gain in connection with a residential mortgage loan:
(1) Receiving or recording a borrower's or potential borrower's
residential mortgage loan application information in any form
for use in a credit decision by a creditor.
(2) Offering to negotiate or negotiating terms of a residential
mortgage loan.
(f) As used in this chapter, "borrower's residential mortgage loan
application information" means the address of the proposed
residential real property to be mortgaged and borrower's essential
personal and financial information necessary for an informed credit
decision to be made on the borrower's mortgage loan application.
(g) As used in this chapter, "mortgage loan originator" means an
individual engaged in mortgage loan origination activities. The term
does not include a person who:
(1) performs purely administrative or clerical tasks on behalf of
a mortgage loan originator or acts as a loan processor or
underwriter;
(2) performs only real estate brokerage activities and is licensed
in accordance with IC 25-34.1 or the applicable laws of another
state, unless the person is compensated by a creditor, a loan
broker, a mortgage loan originator, or any agent of a creditor, a
loan broker, or a mortgage loan originator; or
(3) is involved only in extensions of credit relating to time share
plans (as defined in 11 U.S.C. 101(53D)).
(h) As used in this chapter, "mortgage loan originator license"
means a license issued by the commissioner authorizing an
individual to act as a mortgage loan originator on behalf of a loan
broker licensee.
(i) As used in this chapter, "person" means an individual, a
partnership, a trust, a corporation, a limited liability company, a
limited liability partnership, a sole proprietorship, a joint venture, a
joint stock company, or another group or entity, however organized.
(j) As used in this chapter, "ultimate equitable owner" means a
person who, directly or indirectly, owns or controls ten percent
(10%) or more of the equity interest in a loan broker licensed or
required to be licensed under this chapter, regardless of whether the
person owns or controls the equity interest through one (1) or more
other persons or one (1) or more proxies, powers of attorney, or
variances.
(k) As used in this chapter, "principal manager" means an
individual who:
(1) has at least three (3) years of experience:
(A) as a mortgage loan originator; or
(B) in financial services;
that is acceptable to the commissioner; and
(2) is principally responsible for the supervision and
management of the employees and business affairs of a loan
broker licensee.
(l) As used in this chapter, "principal manager license" means a
license issued by the commissioner authorizing an individual to act
as:
(1) a principal manager; and
(2) a mortgage loan originator;
on behalf of a loan broker licensee.
(m) As used in this chapter, "bona fide third party fee", with
respect to a residential mortgage loan, includes any of the following:
(1) Fees for real estate appraisals. However, if the residential
mortgage loan is governed by Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act (12 U.S.C.
3331 through 3352), the fee for an appraisal performed in
connection with the loan is not a bona fide third party fee unless
the appraisal is performed by a person that is licensed or
certified under IC 25-34.1-3-8.
(2) Fees for title examination, abstract of title, title insurance,
property surveys, or similar purposes.
(3) Notary and credit report fees.
(4) Fees for the services provided by a loan broker in procuring
possible business for a creditor if the fees are paid by the
creditor.
(n) As used in this chapter, "branch office" means any fixed
physical location from which a loan broker licensee holds itself out
as engaging in the loan brokerage business.
(o) As used in this chapter, "loan processor or underwriter" means
an individual who:
(1) is employed by a loan broker licensee and acts at the
direction of, and subject to the supervision of, the loan broker
licensee or a licensed principal manager employed by the loan
broker licensee; and
(2) performs solely clerical or support duties on behalf of the
loan broker licensee, including any of the following activities
with respect to a residential mortgage loan application received
by the loan broker licensee:
(A) The receipt, collection, distribution, and analysis of
information commonly used in the processing or
underwriting of a residential mortgage loan.
(B) Communicating with a borrower or potential borrower
to obtain the information necessary for the processing or
underwriting of a residential mortgage loan, to the extent
that the communication does not include:
(i) offering or negotiating loan rates or terms; or
(ii) counseling borrowers or potential borrowers about
residential mortgage loan rates or terms.
(p) As used in this chapter, "real estate brokerage activity" means
any activity that involves offering or providing real estate brokerage
services to the public, including any of the following:
(1) Acting as a real estate broker or salesperson for a buyer,
seller, lessor, or lessee of real property.
(2) Bringing together parties interested in the sale, lease, or
exchange of real property.
(3) Negotiating, on behalf of any party, any part of a contract
concerning the sale, lease, or exchange of real property, other
than in connection with obtaining or providing financing for the
transaction.
(4) Engaging in any activity for which the person performing
the activity is required to be licensed under IC 25-34.1 or the
applicable laws of another state.
(5) Offering to engage in any activity, or to act in any capacity
with respect to any activity, described in subdivisions (1)
through (4).
(q) As used in this chapter, "registered mortgage loan originator"
means a mortgage loan originator who:
(1) is an employee of:
(A) a depository institution;
(B) a subsidiary that is:
(i) owned and controlled by a depository institution; and
(ii) regulated by a federal financial institution regulatory
agency (as defined in 12 U.S.C. 3350(6)); or
(C) an institution regulated by the Farm Credit
Administration; and
(2) is registered with and maintains a unique identifier with the
Nationwide Mortgage Licensing System and Registry.
(r) As used in this chapter, "residential mortgage loan" means a
loan that is secured by a mortgage, deed of trust, or other consensual
security interest on real estate in Indiana on which there is located or
intended to be constructed a dwelling (as defined in the federal Truth
in Lending Act (15 U.S.C. 1602(v)) that is or will be used primarily
for personal, family, or household purposes.
(s) As used in this chapter, "personal information" includes any
of the following:
(1) An individual's first and last names or first initial and last
name.
(2) Any of the following data elements:
(A) A Social Security number.
(B) A driver's license number.
(C) A state identification card number.
(D) A credit card number.
(E) A financial account number or debit card number in
combination with a security code, password, or access code
that would permit access to the person's account.
(3) With respect to an individual, any of the following:
(A) Address.
(B) Telephone number.
(C) Information concerning the individual's:
(i) income or other compensation;
(ii) credit history;
(iii) credit score;
(iv) assets;
(v) liabilities; or
(vi) employment history.
(t) As used in this chapter, personal information is "encrypted" if
the personal information:
(1) has been transformed through the use of an algorithmic
process into a form in which there is a low probability of
assigning meaning without use of a confidential process or key;
or
(2) is secured by another method that renders the personal
information unreadable or unusable.
(u) As used in this chapter, personal information is "redacted" if
the personal information has been altered or truncated so that not
more than the last four (4) digits of:
(1) a Social Security number;
(2) a driver's license number;
(3) a state identification number; or
(4) an account number;
are accessible as part of the personal information.
(v) As used in this chapter, "depository institution" has the
meaning set forth in the Federal Deposit Insurance Act (12 U.S.C.
1813(c)) and includes any credit union.
(w) As used in this chapter, "state licensed mortgage loan
originator" means any individual who:
(1) is a mortgage loan originator;
(2) is not an employee of:
(A) a depository institution;
(B) a subsidiary that is:
(i) owned and controlled by a depository institution; and
(ii) regulated by a federal financial institution regulatory
agency (as defined in 12 U.S.C. 3350(6)); or
(C) an institution regulated by the Farm Credit
Administration;
(3) is licensed by a state or by the Secretary of the United States
Department of Housing and Urban Development under Section
1508 of the S.A.F.E. Mortgage Licensing Act of 2008 (Title V
of P.L.110-289); and
(4) is registered as a mortgage loan originator with, and
maintains a unique identifier through, the Nationwide Mortgage
Licensing System and Registry.
(x) As used in this chapter, "unique identifier" means a number or
other identifier that:
(1) permanently identifies a mortgage loan originator; and
(2) is assigned by protocols established by the Nationwide
Mortgage Licensing System and Registry and the federal
financial institution regulatory agencies to facilitate:
(A) the electronic tracking of mortgage loan originators; and
(B) the uniform identification of, and public access to, the
employment history of and the publicly adjudicated
disciplinary and enforcement actions against mortgage loan
originators. As added by P.L.235-1985, SEC.1. Amended by P.L.247-1987,
SEC.1; P.L.1-1990, SEC.242; P.L.8-1993, SEC.314; P.L.79-1998,
SEC.22; P.L.230-1999, SEC.1; P.L.14-2000, SEC.52; P.L.115-2001,
SEC.1; P.L.73-2004, SEC.12; P.L.230-2007, SEC.6; P.L.145-2008,
SEC.10; P.L.1-2009, SEC.130; P.L.156-2009, SEC.1; P.L.35-2010,
SEC.4. IC 23-2-5-4 License to engage in loan brokerage business required; license to
act as mortgage loan originator or principal manager required;
unique identifier required; evidence of compliance; criminal
background check
Sec. 4. (a) A person may not engage in the loan brokerage
business in Indiana unless the person first obtains a loan broker
license from the commissioner. Any person desiring to engage or
continue in the loan brokerage business shall apply to the
commissioner for a loan broker license under this chapter.
(b) An individual may not act as a mortgage loan originator in
Indiana on behalf of a person licensed or required to be licensed as
a loan broker under this chapter unless the individual first obtains a
unique identifier from the Nationwide Mortgage Licensing System
and Registry and a mortgage loan originator license from the
commissioner. An individual desiring to act as a mortgage loan
originator on behalf of a person licensed or required to be licensed
as a loan broker under this chapter shall apply to the commissioner
for a mortgage loan originator license under this chapter.
(c) An individual may not act as a principal manager on behalf of
a person licensed or required to be licensed as a loan broker under
this chapter unless the individual first obtains a unique identifier
from the Nationwide Mortgage Licensing System and Registry and
a principal manager license from the commissioner. Any individual
desiring to act as a principal manager on behalf of a person licensed
or required to be licensed as a loan broker under this chapter shall
apply to the commissioner for a principal manager license under this
chapter.
(d) The commissioner may request evidence of compliance with
this section at any of the following times:
(1) The time of application for an initial license.
(2) The time of renewal of a license.
(3) Any other time considered necessary by the commissioner.
(e) For purposes of subsection (d), evidence of compliance with
this section must include a criminal background check, including a
national criminal history background check (as defined in
IC 10-13-3-12) by the Federal Bureau of Investigation.
(f) A unique identifier obtained by an individual from the
Nationwide Mortgage Licensing System and Registry under
subsection (b) or (c) may not be used for purposes other than those
set forth in the S.A.F.E. Mortgage Licensing Act of 2008 (Title V of
P.L.110-289). As added by P.L.235-1985, SEC.1. Amended by P.L.230-1999,
SEC.2; P.L.230-2007, SEC.7; P.L.145-2008, SEC.11; P.L.156-2009,
SEC.2.
IC 23-2-5-5 Applications for licenses; contents; bond; expiration; service of
process; criminal background checks; consumer reports; financial
responsibility
Sec. 5. (a) An application for a loan broker license or renewal of
a loan broker license must contain:
(1) consent to service of process under subsection (g);
(2) evidence of the bond required in subsection (d);
(3) an application fee of two hundred dollars ($200), plus one
hundred dollars ($100) for each ultimate equitable owner;
(4) an affidavit affirming that none of the applicant's ultimate
equitable owners, directors, managers, or officers have been
convicted, in any jurisdiction, of:
(A) any felony within the previous seven (7) years; or
(B) an offense involving fraud or deception that is
punishable by at least one (1) year of imprisonment;
unless such an affidavit is waived by the commissioner under
subsection (h);
(5) evidence that the applicant, if the applicant is an individual,
has completed the education requirements under section 21 of
this chapter;
(6) the name and license number for each mortgage loan
originator to be employed by the licensee;
(7) the name and license number for each principal manager;
and
(8) for each ultimate equitable owner, the following
information:
(A) The name of the ultimate equitable owner.
(B) The address of the ultimate equitable owner, including
the home address of the ultimate equitable owner if the
ultimate equitable owner is an individual.
(C) The telephone number of the ultimate equitable owner,
including the home telephone number if the ultimate
equitable owner is an individual.
(D) The ultimate equitable owner's Social Security number
and date of birth, if the ultimate equitable owner is an
individual.
(b) An application for licensure as a mortgage loan originator
shall be made on a form prescribed by the commissioner. The
application must include the following information for the individual
that seeks to be licensed as a mortgage loan originator:
(1) The name of the individual.
(2) The home address of the individual.
(3) The home telephone number of the individual.
(4) The individual's Social Security number and date of birth.
(5) The name of the:
(A) loan broker licensee; or
(B) applicant for loan broker licensure;
for whom the individual seeks to be employed as a mortgage
loan originator.
(6) Consent to service of process under subsection (g).
(7) Evidence that the individual has completed the education
requirements described in section 21 of this chapter.
(8) An application fee of fifty dollars ($50).
(9) All:
(A) registration numbers previously issued to the individual
under this chapter, if the applicant was registered as an
originator or a principal manager under this chapter before
July 1, 2009; and
(B) license numbers previously issued to the individual
under this chapter, if applicable.
(c) An application for licensure as a principal manager shall be
made on a form prescribed by the commissioner. The application
must include the following information for the individual who seeks
to be licensed as a principal manager:
(1) The name of the individual.
(2) The home address of the individual.
(3) The home telephone number of the individual.
(4) The individual's Social Security number and date of birth.
(5) The name of the:
(A) loan broker licensee; or
(B) applicant for loan broker licensure;
for whom the individual seeks to be employed as a principal
manager.
(6) Consent to service of process under subsection (g).
(7) Evidence that the individual has completed the education
requirements described in section 21 of this chapter.
(8) Evidence that the individual has at least three (3) years of
experience in the:
(A) loan brokerage; or
(B) financial services;
business.
(9) An application fee of one hundred dollars ($100).
(10) All:
(A) registration numbers previously issued to the individual
under this chapter, if the applicant was registered as an
originator or a principal manager under this chapter before
July 1, 2009; and
(B) license numbers previously issued to the individual
under this chapter, if applicable.
(d) A loan broker licensee must maintain a bond satisfactory to
the commissioner, which must cover the activities of each licensed
mortgage loan originator and licensed principal manager employed
by the loan broker licensee. The bond must be in one (1) of the
following amounts, depending on the total amount of residential
mortgage loans originated by the loan broker in the previous calendar
year:
(1) Fifty thousand dollars ($50,000) if the total amount of
residential mortgage loans originated by the loan broker in the
previous calendar year was not greater than five million dollars
($5,000,000).
(2) Sixty thousand dollars ($60,000) if the total amount of
residential mortgage loans originated by the loan broker in the
previous calendar year was greater than five million dollars
($5,000,000) but not greater than twenty million dollars
($20,000,000).
(3) Seventy-five thousand dollars ($75,000) if the total amount
of residential mortgage loans originated by the loan broker in
the previous calendar year was greater than twenty million
dollars ($20,000,000).
The bond shall be in favor of the state and shall secure payment of
damages to any person aggrieved by any violation of this chapter by
the licensee or any licensed mortgage loan originator or licensed
principal manager employed by the licensee.
(e) The commissioner shall issue a license and license number to
an applicant for a loan broker license, a mortgage loan originator
license, or a principal manager license if the applicant meets the
applicable licensure requirements set forth in this chapter.
(f) Licenses issued by the commissioner under this chapter expire
on December 31 of the year in which they are issued.
(g) Every applicant for licensure or for renewal of a license shall
file with the commissioner, in such form as the commissioner by rule
or order prescribes, an irrevocable consent appointing the secretary
of state to be the applicant's agent to receive service of any lawful
process in any noncriminal suit, action, or proceeding against the
applicant arising from the violation of any provision of this chapter.
Service shall be made in accordance with the Indiana Rules of Trial
Procedure.
(h) Upon good cause shown, the commissioner may waive the
requirements of subsection (a)(4) for one (1) or more of an
applicant's ultimate equitable owners, directors, managers, or
officers.
(i) Whenever an initial or a renewal application for a license is
denied or withdrawn, the commissioner shall retain the initial or
renewal application fee paid.
(j) At the time of application for an initial license under this
chapter, the commissioner shall require each:
(1) equitable owner, in the case of an applicant for a loan broker
license;
(2) individual described in subsection (a)(4), in the case of an
applicant for a loan broker license; and
(3) applicant for licensure as:
(A) a mortgage loan originator; or
(B) a principal manager;
to submit fingerprints for a national criminal history background
check (as defined in IC 10-13-3-12) by the Federal Bureau of
Investigation, for use by the commissioner in determining whether
the equitable owner, the individual described in subsection (a)(4), or
the applicant should be denied licensure under this chapter for any
reason set forth in section 10(c) or 10(d) of this chapter. The
equitable owner, individual described in subsection (a)(4), or
applicant shall pay any fees or costs associated with the fingerprints
and background check required under this subsection. The
commissioner may not release the results of a background check
described in this subsection to any private entity.
(k) Every three (3) years, beginning with the third calendar year
following the calendar year in which an initial license is issued under
this chapter, the commissioner shall require each:
(1) equitable owner, in the case of a loan broker licensee;
(2) individual described in subsection (a)(4), in the case of a
loan broker licensee; and
(3) licensed:
(A) mortgage loan originator; or
(B) principal manager;
to submit fingerprints for a national criminal history background
check (as defined in IC 10-13-3-12) by the Federal Bureau of
Investigation, for use by the commissioner in determining whether
the equitable owner, the individual described in subsection (a)(4), or
the licensee should be denied continued licensure under this chapter
for any reason set forth in section 10(c) of this chapter. The equitable
owner, individual described in subsection (a)(4), or licensee shall pay
any fees or costs associated with the fingerprints and background
check required under this subsection. The commissioner may not
release the results of a background check described in this subsection
to any private entity.
(l) The commissioner shall require each applicant for licensure as:
(1) a mortgage loan originator; or
(2) a principal manager;
to submit written authorization for the commissioner or an agent of
the commissioner to obtain a consumer report (as defined in
IC 24-5-24-2) concerning the applicant.
(m) In reviewing a consumer report obtained under subsection (l),
the commissioner may consider one (1) or more of the following in
determining whether an individual described in subsection (l) has
demonstrated financial responsibility:
(1) Bankruptcies filed by the individual within the most recent
ten (10) years.
(2) Current outstanding civil judgments against the individual,
except judgments resulting solely from medical expenses owed
by the individual.
(3) Current outstanding tax liens or other government liens or
filings.
(4) Foreclosure actions filed within the most recent three (3)
years against property owned by the individual.
(5) Any pattern of seriously delinquent accounts associated with
the individual during the most recent three (3) years. As added by P.L.235-1985, SEC.1. Amended by P.L.247-1987,
SEC.2; P.L.113-1992, SEC.4; P.L.11-1996, SEC.18; P.L.230-1999,
SEC.3; P.L.115-2001, SEC.2; P.L.230-2007, SEC.8; P.L.3-2008,
SEC.167; P.L.145-2008, SEC.12; P.L.156-2009, SEC.3.
IC 23-2-5-5.5 Written examination; subject areas; passing and retaking
examination
Sec. 5.5. (a) The commissioner shall require an applicant for
licensure as:
(1) a mortgage loan originator under section 5(b) of this
chapter; or
(2) a principal manager under section 5(c) of this chapter;
to pass a written examination prepared and administered by the
commissioner or an agent appointed by the commissioner and
approved by the Nationwide Mortgage Licensing System and
Registry.
(b) The written examination required by this section must measure
the applicant's knowledge and comprehension in appropriate subject
areas, including the following:
(1) Ethics.
(2) Federal laws and regulations concerning the origination of
residential mortgage loans.
(3) State laws and rules concerning the origination of residential
mortgage loans.
(c) An individual who answers at least seventy-five percent (75%)
of the questions on the written examination correctly is considered
to have passed the examination.
(d) An individual who does not pass the written examination may
retake the examination up to two (2) additional times, with each
subsequent attempt occurring at least thirty (30) days after the
individual last sat for the examination. If an individual fails three (3)
consecutive examinations, the individual must wait to retake the
examination until at least six (6) months after the individual sat for
the third examination.
(e) If an individual who has been issued a mortgage loan
originator license or a principal manager license under this chapter:
(1) allows the individual's license to lapse; or
(2) otherwise does not maintain a valid license under this
chapter;
for a period of at least five (5) years, the individual must retake the
written examination required by this section. As added by P.L.156-2009, SEC.4.
IC 23-2-5-6 Renewal of licenses
Sec. 6. A loan broker licensee may not continue engaging in the
loan brokerage business unless the licensee's license is renewed
annually. A mortgage loan originator licensee or a principal manager
licensee may not continue acting as:
(1) a mortgage loan originator; or
(2) a principal manager;
unless the licensee's license is renewed annually. A licensee under
this chapter shall renew its license by filing with the commissioner,
at least thirty (30) days before the expiration of the license, an
application containing any information the commissioner may
require to indicate any material change from the information
contained in the applicant's original application or any previous
application. As added by P.L.235-1985, SEC.1. Amended by P.L.11-1996,
SEC.19; P.L.230-1999, SEC.4; P.L.115-2001, SEC.3; P.L.145-2008,
SEC.13; P.L.156-2009, SEC.5.
IC 23-2-5-7 Loan broker regulation account
Sec. 7. (a) The loan broker regulation account is created in the
state general fund. The money in the loan broker regulation account
may be used only for the regulation of loan brokers, mortgage loan
originators, and principal managers under this chapter. The loan
broker regulation account shall be administered by the treasurer of
state. The money in the loan broker regulation account does not
revert to any other account within the state general fund at the end of
a state fiscal year.
(b) Except as provided in subsection (c), all fees and funds
accruing from the administration of this chapter shall be accounted
for by the commissioner and shall be deposited with the treasurer of
state who shall deposit them in the loan broker regulation account in
the state general fund.
(c) All expenses incurred in the administration of this chapter
shall be paid from appropriations made from the state general fund.
However, costs of investigations incurred under this chapter shall be
paid from, and civil penalties recovered under this chapter shall be
deposited in, the securities division enforcement account created
under IC 23-19-6-1(f). The funds in the securities division
enforcement account shall be available, with the approval of the
budget agency, to augment and supplement the funds appropriated
for the administration of this chapter. As added by P.L.235-1985, SEC.1. Amended by P.L.115-2001,
SEC.4; P.L.27-2007, SEC.18; P.L.156-2009, SEC.6.
IC 23-2-5-8
Repealed
(Repealed by P.L.113-1992, SEC.10.)
IC 23-2-5-9 Statute of frauds; required statement
Sec. 9. (a) To be enforceable, every contract for the services of a
loan broker shall be in writing and signed by the contracting parties.
(b) At the time a contract for the services of a loan broker is
signed, the loan broker shall provide a copy of the signed contract to
each of the other parties to the contract.
(c) Every contract for the services of a loan broker must include
the following statement:
"No statement or representation by a loan broker is valid or
enforceable unless the statement or representation is in writing."
(d) This section does not apply to a contract that provides for the
payment of referral fees by a lender or a third party. As added by P.L.235-1985, SEC.1. Amended by P.L.113-1992,
SEC.5; P.L.230-2007, SEC.9.
IC 23-2-5-9.1 Real estate appraisals; improper influence; ownership interest in
appraisal company
Sec. 9.1. (a) As used in this section, "appraisal company" means
a business entity that:
(1) performs real estate appraisals on a regular basis for
compensation through one (1) or more owners, officers,
employees, or agents; or
(2) holds itself out to the public as performing real estate
appraisals.
(b) As used in this section, "immediate family", with respect to an
individual, refers to:
(1) the individual's spouse who resides in the individual's
household; and
(2) any dependent child of the individual.
(c) As used in this section, "real estate appraiser" means a person
who:
(1) is licensed as a real estate broker under IC 25-34.1 and
performs real estate appraisals within the scope of the person's
license;
(2) holds a real estate appraiser license or certificate issued
under IC 25-34.1-3-8; or
(3) otherwise performs real estate appraisals in Indiana.
(d) A person licensed under this chapter, or a person required to
be licensed under this chapter, shall not knowingly bribe, coerce, or
intimidate another person to corrupt or improperly influence the
independent judgment of a real estate appraiser with respect to the
value of any real estate offered as security for a residential mortgage
loan.
(e) Except as provided in subsection (f):
(1) a person licensed under this chapter, or a person required to
be licensed under this chapter;
(2) a member of the immediate family of:
(A) a person licensed under this chapter; or
(B) a person required to be licensed under this chapter; or
(3) a person described in subdivision (1) or (2) in combination
with one (1) or more other persons described in subdivision (1)
or (2);
may not own or control a majority interest in an appraisal company.
(f) This subsection applies to a person or combination of persons
described in subsection (e) who own or control a majority interest in
an appraisal company on June 30, 2007. The prohibition set forth in
subsection (e) does not apply to a person or combination of persons
described in this subsection, subject to the following:
(1) The interest in the appraisal company owned or controlled
by the person or combination of persons described in subsection
(e) shall not be increased after June 30, 2007.
(2) The interest of a person licensed under this chapter, or of a
person required to be licensed under this chapter, shall not be
transferred to a member of the person's immediate family.
(3) If the commissioner determines that any person or
combination of persons described in subsection (e) has violated
this chapter, the commissioner may order one (1) or more of the
persons to divest their interest in the appraisal company. The
commissioner may exercise the remedy provided by this
subdivision in addition to, or as a substitute for, any other
remedy available to the commissioner under this chapter. As added by P.L.230-2007, SEC.10. Amended by P.L.156-2009,
SEC.7.
IC 23-2-5-10 Violations; investigation by commissioner; orders and notices;
hearing; denial, suspension, or revocation of license; censure;
summary orders; transfer or termination of license; change of
material fact or statement
Sec. 10. (a) Whenever it appears to the commissioner that a
person has engaged in or is about to engage in an act or a practice
constituting a violation of this chapter or a rule or an order under this
chapter, the commissioner may investigate and may issue, with a
prior hearing if there exists no substantial threat of immediate
irreparable harm or without a prior hearing, if there exists a
substantial threat of immediate irreparable harm, orders and notices
as the commissioner determines to be in the public interest, including
cease and desist orders, orders to show cause, and notices. After
notice and hearing, the commissioner may enter an order of
rescission, restitution, or disgorgement, including interest at the rate
of eight percent (8%) per year, directed to a person who has violated
this chapter or a rule or order under this chapter.
(b) Upon the issuance of an order or notice without a prior hearing
by the commissioner under subsection (a), the commissioner shall
promptly notify the respondent and, if the subject of the order or
notice is a mortgage loan originator licensee or a principal manager
licensee, the loan broker licensee for whom the mortgage loan
originator or principal manager is employed:
(1) that the order or notice has been issued;
(2) of the reasons the order or notice has been issued; and
(3) that upon the receipt of a written request the matter will be
set for a hearing to commence not later than fifteen (15)
business days after receipt of the request if the original order
issued by the commissioner was a summary suspension,
summary revocation, or denial of a license and not later than
forty-five (45) business days after receipt of the request for all
other orders unless the respondent consents to a later date.
If a hearing is not requested and not ordered by the commissioner, an
order remains in effect until it is modified or vacated by the
commissioner. If a hearing is requested or ordered, the
commissioner, after notice of an opportunity for hearing, may modify
or vacate the order or extend it until final determination.
(c) The commissioner may deny an application for an initial or a
renewal license, and may suspend or revoke the license of a licensee
if the applicant, the licensee, or an ultimate equitable owner of an
applicant for a loan broker license or of a loan broker licensee:
(1) has, within the most recent ten (10) years:
(A) been the subject of an adjudication or a determination
by:
(i) a court with jurisdiction; or
(ii) an agency or administrator that regulates securities,
commodities, banking, financial services, insurance, real
estate, or the real estate appraisal industry;
in Indiana or in any other jurisdiction; and
(B) been found, after notice and opportunity for hearing, to
have violated the securities, commodities, banking, financial
services, insurance, real estate, or real estate appraisal laws
of Indiana or any other jurisdiction;
(2) except as provided in subsection (d)(1) with respect to the
loan brokerage business, has:
(A) been denied the right to do business in the securities,
commodities, banking, financial services, insurance, real
estate, or real estate appraisal industry; or
(B) had the person's authority to do business in the
securities, commodities, banking, financial services,
insurance, real estate, or real estate appraisal industry
revoked or suspended;
by Indiana or by any other state, federal, or foreign
governmental agency or self regulatory organization;
(3) is insolvent;
(4) has violated any provision of this chapter;
(5) has knowingly filed with the commissioner any document or
statement that:
(A) contains a false representation of a material fact;
(B) fails to state a material fact; or
(C) contains a representation that becomes false after the
filing but during the term of a license as provided in
subsection (j);
(6) has been convicted, within ten (10) years before the date of
the application, renewal, or review, of any crime, other than a
felony, involving fraud or deceit;
(7) if the person is a loan broker licensee or a principal
manager, has failed to reasonably supervise the person's
mortgage loan originators or employees to ensure their
compliance with this chapter;
(8) is on the most recent tax warrant list supplied to the
commissioner by the department of state revenue; or
(9) has engaged in dishonest or unethical practices in the loan
brokerage business, as determined by the commissioner.
(d) The commissioner shall deny an application for an initial or a
renewal license and shall revoke the license of a licensee if the
applicant, the licensee, or an ultimate equitable owner of an applicant
for a loan broker license or of a loan broker licensee:
(1) has had a:
(A) loan broker license issued under this chapter;
(B) mortgage loan originator license issued under this
chapter;
(C) principal manager license issued under this chapter; or
(D) license that is:
(i) equivalent to a license described in clause (A), (B), or
(C); and
(ii) issued by another jurisdiction;
revoked by the commissioner or the appropriate regulatory
agency in another jurisdiction, whichever applies;
(2) has been convicted of or pleaded guilty or nolo contendere
to a felony in a domestic, foreign, or military court:
(A) during the seven (7) year period immediately preceding
the date of the application or review; or
(B) at any time preceding the date of the application or
review if the felony involved an act of fraud or dishonesty,
a breach of trust, or money laundering;
(3) fails to maintain the bond required under section 5(d) of this
chapter;
(4) fails to demonstrate the financial responsibility, character,
and general fitness necessary to:
(A) command the confidence of the community in which the
applicant or licensee engages or will engage in the loan
brokerage business; and
(B) warrant a determination by the commissioner that the
applicant or licensee will operate honestly, fairly, and
efficiently within the purposes of this chapter;
(5) has failed to meet the education requirements set forth in
section 21 of this chapter;
(6) has failed to pass the written examination required by
section 5.5 of this chapter; or
(7) fails to:
(A) keep or maintain records in accordance with section 18
of this chapter; or
(B) allow the commissioner or an agent appointed by the
commissioner to inspect or examine a loan broker licensee's
books and records to determine compliance with section 18
of this chapter.
(e) The commissioner may do either of the following:
(1) Censure:
(A) a licensee;
(B) an officer, a director, or an ultimate equitable owner of
a loan broker licensee; or
(C) any other person;
who violates or causes a violation of this chapter.
(2) Permanently bar any person described in subdivision (1)
from being:
(A) licensed under this chapter; or
(B) employed by or affiliated with a person licensed under
this chapter;
if the person violates or causes a violation of this chapter.
(f) The commissioner may not enter a final order:
(1) denying, suspending, or revoking the license of an applicant
or a licensee; or
(2) imposing other sanctions;
without prior notice to all interested parties, opportunity for a
hearing, and written findings of fact and conclusions of law.
However, the commissioner may by summary order deny, suspend,
or revoke a license pending final determination of any proceeding
under this section or before any proceeding is initiated under this
section. Upon the entry of a summary order, the commissioner shall
promptly notify all interested parties that the summary order has
been entered, of the reasons for the summary order, and that upon
receipt by the commissioner of a written request from a party, the
matter will be set for hearing to commence not later than forty-five
(45) business days after receipt of the request. If no hearing is
requested and none is ordered by the commissioner, the order
remains in effect until it is modified or vacated by the commissioner.
If a hearing is requested or ordered, the commissioner, after notice
of the hearing has been given to all interested persons and the
hearing has been held, may modify or vacate the order or extend it
until final determination.
(g) IC 4-21.5 does not apply to a proceeding under this section.
(h) If a mortgage loan originator licensee or a principal manager
licensee seeks to transfer the licensee's license to another loan broker
licensee who desires to have the mortgage loan originator licensee or
principal manager licensee act as a mortgage loan originator or as a
principal manager, whichever applies, the mortgage loan originator
licensee or principal manager licensee shall, before the mortgage
loan originator licensee or principal manager licensee acts as a
mortgage loan originator or as a principal manager for the new
employer, submit to the commissioner, on a form prescribed by the
commissioner, a license application, as required by section 5 of this
chapter.
(i) If the employment of a mortgage loan originator licensee or
principal manager licensee is terminated, whether:
(1) voluntarily by the mortgage loan originator licensee or
principal manager licensee; or
(2) by the loan broker licensee employing the mortgage loan
originator licensee or principal manager licensee;
the loan broker licensee that employed the mortgage loan originator
licensee or principal manager licensee shall, not later than five (5)
days after the termination, notify the commissioner of the
termination and the reasons for the termination.
(j) If a material fact or statement included in an application under
this chapter changes after the application has been submitted, the
applicant shall provide written notice to the commissioner of the
change. The commissioner may deny, revoke, or refuse to renew a
license applied for or held by any person who:
(1) is required to submit a written notice under this subsection
and fails to provide the required notice within two (2) business
days after the person discovers or should have discovered the
change; or
(2) would not qualify for licensure under this chapter as a result
of the change in a material fact or statement. As added by P.L.235-1985, SEC.1. Amended by P.L.11-1996,
SEC.20; P.L.230-1999, SEC.5; P.L.14-2000, SEC.53; P.L.270-2003,
SEC.3; P.L.48-2006, SEC.7; P.L.230-2007, SEC.11; P.L.145-2008,
SEC.14; P.L.156-2009, SEC.8.
IC 23-2-5-11 Powers and duties of commissioner; use immunity for witnesses;
certificate of compliance or noncompliance; authority to compel
compliance; multistate automated licensing system and repository
Sec. 11. (a) The commissioner may do the following:
(1) Adopt rules under IC 4-22-2 to implement this chapter.
(2) Make investigations and examinations:
(A) in connection with any application for licensure under
this chapter or with any license already granted; or
(B) whenever it appears to the commissioner, upon the basis
of a complaint or information, that reasonable grounds exist
for the belief that an investigation or examination is
necessary or advisable for the more complete protection of
the interests of the public.
(3) Charge as costs of investigation or examination all
reasonable expenses, including a per diem prorated upon the
salary of the commissioner or employee and actual traveling
and hotel expenses. All reasonable expenses are to be paid by
the party or parties under investigation or examination if the
party has violated this chapter.
(4) Issue notices and orders, including cease and desist notices
and orders, after making an investigation or examination under
subdivision (2). The commissioner shall notify the person that
an order or notice has been issued, the reasons for it, and that a
hearing will be set not later than fifteen (15) business days after
the commissioner receives a written request from the person
requesting a hearing if the original order issued by the
commissioner was a summary suspension, summary revocation,
or denial of a license and not later than forty-five (45) business
days after the commissioner receives a written request from the
person requesting a hearing for all other orders.
(5) Sign all orders, official certifications, documents, or papers
issued under this chapter or delegate the authority to sign any
of those items to a deputy.
(6) Hold and conduct hearings.
(7) Hear evidence.
(8) Conduct inquiries with or without hearings.
(9) Receive reports of investigators or other officers or
employees of the state of Indiana or of any municipal
corporation or governmental subdivision within the state.
(10) Administer oaths, or cause them to be administered.
(11) Subpoena witnesses, and compel them to attend and testify.
(12) Compel the production of books, records, and other
documents.
(13) Order depositions to be taken of any witness residing
within or without the state. The depositions shall be taken in the
manner prescribed by law for depositions in civil actions and
made returnable to the commissioner.
(14) Order that each witness appearing under the
commissioner's order to testify before the commissioner shall
receive the fees and mileage allowances provided for witnesses
in civil cases.
(15) Provide interpretive opinions or issue determinations that
the commissioner will not institute a proceeding or an action
under this chapter against a specified person for engaging in a
specified act, practice, or course of business if the
determination is consistent with this chapter. The commissioner
may adopt rules to establish fees for individuals requesting an
interpretive opinion or a determination under this subdivision.
A person may not request an interpretive opinion or a
determination concerning an activity that:
(A) occurred before; or
(B) is occurring on;
the date the opinion or determination is requested.
IC 23-2-5-1 "Commissioner" defined
Sec. 1. As used in this chapter, "commissioner" refers to the
securities commissioner appointed under IC 23-19-6-1(a). As added by P.L.235-1985, SEC.1. Amended by P.L.27-2007,
SEC.17.
IC 23-2-5-2 "Loan" defined
Sec. 2. As used in this chapter, "loan" means any agreement to
advance money or property in return for the promise to make
payments for the money or property. As added by P.L.235-1985, SEC.1.
IC 23-2-5-3 Definitions
Sec. 3. (a) As used in this chapter, "loan broker license" means a
license issued by the commissioner authorizing a person to engage
in the loan brokerage business.
(b) As used in this chapter, "licensee" means a person that is
issued a license under this chapter.
(c) As used in this chapter, "loan broker" means any person who,
in return for any consideration from any source procures, attempts to
procure, or assists in procuring, a residential mortgage loan from a
third party or any other person, whether or not the person seeking the
loan actually obtains the loan. "Loan broker" does not include:
(1) any supervised financial organization (as defined in
IC 26-1-4-102.5), including a bank, savings bank, trust
company, savings association, or credit union;
(2) any other financial institution that is:
(A) regulated by any agency of the United States or any
state; and
(B) regularly actively engaged in the business of making
consumer loans that are not secured by real estate or taking
assignment of consumer sales contracts that are not secured
by real estate;
(3) any insurance company;
(4) any person arranging financing for the sale of the person's
product; or
(5) a creditor that is licensed under IC 24-4.4-2-402.
(d) As used in this chapter, "loan brokerage business" means a
person acting as a loan broker.
(e) As used in this chapter, "mortgage loan origination activities"
means performing any of the following activities for compensation
or gain in connection with a residential mortgage loan:
(1) Receiving or recording a borrower's or potential borrower's
residential mortgage loan application information in any form
for use in a credit decision by a creditor.
(2) Offering to negotiate or negotiating terms of a residential
mortgage loan.
(f) As used in this chapter, "borrower's residential mortgage loan
application information" means the address of the proposed
residential real property to be mortgaged and borrower's essential
personal and financial information necessary for an informed credit
decision to be made on the borrower's mortgage loan application.
(g) As used in this chapter, "mortgage loan originator" means an
individual engaged in mortgage loan origination activities. The term
does not include a person who:
(1) performs purely administrative or clerical tasks on behalf of
a mortgage loan originator or acts as a loan processor or
underwriter;
(2) performs only real estate brokerage activities and is licensed
in accordance with IC 25-34.1 or the applicable laws of another
state, unless the person is compensated by a creditor, a loan
broker, a mortgage loan originator, or any agent of a creditor, a
loan broker, or a mortgage loan originator; or
(3) is involved only in extensions of credit relating to time share
plans (as defined in 11 U.S.C. 101(53D)).
(h) As used in this chapter, "mortgage loan originator license"
means a license issued by the commissioner authorizing an
individual to act as a mortgage loan originator on behalf of a loan
broker licensee.
(i) As used in this chapter, "person" means an individual, a
partnership, a trust, a corporation, a limited liability company, a
limited liability partnership, a sole proprietorship, a joint venture, a
joint stock company, or another group or entity, however organized.
(j) As used in this chapter, "ultimate equitable owner" means a
person who, directly or indirectly, owns or controls ten percent
(10%) or more of the equity interest in a loan broker licensed or
required to be licensed under this chapter, regardless of whether the
person owns or controls the equity interest through one (1) or more
other persons or one (1) or more proxies, powers of attorney, or
variances.
(k) As used in this chapter, "principal manager" means an
individual who:
(1) has at least three (3) years of experience:
(A) as a mortgage loan originator; or
(B) in financial services;
that is acceptable to the commissioner; and
(2) is principally responsible for the supervision and
management of the employees and business affairs of a loan
broker licensee.
(l) As used in this chapter, "principal manager license" means a
license issued by the commissioner authorizing an individual to act
as:
(1) a principal manager; and
(2) a mortgage loan originator;
on behalf of a loan broker licensee.
(m) As used in this chapter, "bona fide third party fee", with
respect to a residential mortgage loan, includes any of the following:
(1) Fees for real estate appraisals. However, if the residential
mortgage loan is governed by Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act (12 U.S.C.
3331 through 3352), the fee for an appraisal performed in
connection with the loan is not a bona fide third party fee unless
the appraisal is performed by a person that is licensed or
certified under IC 25-34.1-3-8.
(2) Fees for title examination, abstract of title, title insurance,
property surveys, or similar purposes.
(3) Notary and credit report fees.
(4) Fees for the services provided by a loan broker in procuring
possible business for a creditor if the fees are paid by the
creditor.
(n) As used in this chapter, "branch office" means any fixed
physical location from which a loan broker licensee holds itself out
as engaging in the loan brokerage business.
(o) As used in this chapter, "loan processor or underwriter" means
an individual who:
(1) is employed by a loan broker licensee and acts at the
direction of, and subject to the supervision of, the loan broker
licensee or a licensed principal manager employed by the loan
broker licensee; and
(2) performs solely clerical or support duties on behalf of the
loan broker licensee, including any of the following activities
with respect to a residential mortgage loan application received
by the loan broker licensee:
(A) The receipt, collection, distribution, and analysis of
information commonly used in the processing or
underwriting of a residential mortgage loan.
(B) Communicating with a borrower or potential borrower
to obtain the information necessary for the processing or
underwriting of a residential mortgage loan, to the extent
that the communication does not include:
(i) offering or negotiating loan rates or terms; or
(ii) counseling borrowers or potential borrowers about
residential mortgage loan rates or terms.
(p) As used in this chapter, "real estate brokerage activity" means
any activity that involves offering or providing real estate brokerage
services to the public, including any of the following:
(1) Acting as a real estate broker or salesperson for a buyer,
seller, lessor, or lessee of real property.
(2) Bringing together parties interested in the sale, lease, or
exchange of real property.
(3) Negotiating, on behalf of any party, any part of a contract
concerning the sale, lease, or exchange of real property, other
than in connection with obtaining or providing financing for the
transaction.
(4) Engaging in any activity for which the person performing
the activity is required to be licensed under IC 25-34.1 or the
applicable laws of another state.
(5) Offering to engage in any activity, or to act in any capacity
with respect to any activity, described in subdivisions (1)
through (4).
(q) As used in this chapter, "registered mortgage loan originator"
means a mortgage loan originator who:
(1) is an employee of:
(A) a depository institution;
(B) a subsidiary that is:
(i) owned and controlled by a depository institution; and
(ii) regulated by a federal financial institution regulatory
agency (as defined in 12 U.S.C. 3350(6)); or
(C) an institution regulated by the Farm Credit
Administration; and
(2) is registered with and maintains a unique identifier with the
Nationwide Mortgage Licensing System and Registry.
(r) As used in this chapter, "residential mortgage loan" means a
loan that is secured by a mortgage, deed of trust, or other consensual
security interest on real estate in Indiana on which there is located or
intended to be constructed a dwelling (as defined in the federal Truth
in Lending Act (15 U.S.C. 1602(v)) that is or will be used primarily
for personal, family, or household purposes.
(s) As used in this chapter, "personal information" includes any
of the following:
(1) An individual's first and last names or first initial and last
name.
(2) Any of the following data elements:
(A) A Social Security number.
(B) A driver's license number.
(C) A state identification card number.
(D) A credit card number.
(E) A financial account number or debit card number in
combination with a security code, password, or access code
that would permit access to the person's account.
(3) With respect to an individual, any of the following:
(A) Address.
(B) Telephone number.
(C) Information concerning the individual's:
(i) income or other compensation;
(ii) credit history;
(iii) credit score;
(iv) assets;
(v) liabilities; or
(vi) employment history.
(t) As used in this chapter, personal information is "encrypted" if
the personal information:
(1) has been transformed through the use of an algorithmic
process into a form in which there is a low probability of
assigning meaning without use of a confidential process or key;
or
(2) is secured by another method that renders the personal
information unreadable or unusable.
(u) As used in this chapter, personal information is "redacted" if
the personal information has been altered or truncated so that not
more than the last four (4) digits of:
(1) a Social Security number;
(2) a driver's license number;
(3) a state identification number; or
(4) an account number;
are accessible as part of the personal information.
(v) As used in this chapter, "depository institution" has the
meaning set forth in the Federal Deposit Insurance Act (12 U.S.C.
1813(c)) and includes any credit union.
(w) As used in this chapter, "state licensed mortgage loan
originator" means any individual who:
(1) is a mortgage loan originator;
(2) is not an employee of:
(A) a depository institution;
(B) a subsidiary that is:
(i) owned and controlled by a depository institution; and
(ii) regulated by a federal financial institution regulatory
agency (as defined in 12 U.S.C. 3350(6)); or
(C) an institution regulated by the Farm Credit
Administration;
(3) is licensed by a state or by the Secretary of the United States
Department of Housing and Urban Development under Section
1508 of the S.A.F.E. Mortgage Licensing Act of 2008 (Title V
of P.L.110-289); and
(4) is registered as a mortgage loan originator with, and
maintains a unique identifier through, the Nationwide Mortgage
Licensing System and Registry.
(x) As used in this chapter, "unique identifier" means a number or
other identifier that:
(1) permanently identifies a mortgage loan originator; and
(2) is assigned by protocols established by the Nationwide
Mortgage Licensing System and Registry and the federal
financial institution regulatory agencies to facilitate:
(A) the electronic tracking of mortgage loan originators; and
(B) the uniform identification of, and public access to, the
employment history of and the publicly adjudicated
disciplinary and enforcement actions against mortgage loan
originators. As added by P.L.235-1985, SEC.1. Amended by P.L.247-1987,
SEC.1; P.L.1-1990, SEC.242; P.L.8-1993, SEC.314; P.L.79-1998,
SEC.22; P.L.230-1999, SEC.1; P.L.14-2000, SEC.52; P.L.115-2001,
SEC.1; P.L.73-2004, SEC.12; P.L.230-2007, SEC.6; P.L.145-2008,
SEC.10; P.L.1-2009, SEC.130; P.L.156-2009, SEC.1; P.L.35-2010,
SEC.4. IC 23-2-5-4 License to engage in loan brokerage business required; license to
act as mortgage loan originator or principal manager required;
unique identifier required; evidence of compliance; criminal
background check
Sec. 4. (a) A person may not engage in the loan brokerage
business in Indiana unless the person first obtains a loan broker
license from the commissioner. Any person desiring to engage or
continue in the loan brokerage business shall apply to the
commissioner for a loan broker license under this chapter.
(b) An individual may not act as a mortgage loan originator in
Indiana on behalf of a person licensed or required to be licensed as
a loan broker under this chapter unless the individual first obtains a
unique identifier from the Nationwide Mortgage Licensing System
and Registry and a mortgage loan originator license from the
commissioner. An individual desiring to act as a mortgage loan
originator on behalf of a person licensed or required to be licensed
as a loan broker under this chapter shall apply to the commissioner
for a mortgage loan originator license under this chapter.
(c) An individual may not act as a principal manager on behalf of
a person licensed or required to be licensed as a loan broker under
this chapter unless the individual first obtains a unique identifier
from the Nationwide Mortgage Licensing System and Registry and
a principal manager license from the commissioner. Any individual
desiring to act as a principal manager on behalf of a person licensed
or required to be licensed as a loan broker under this chapter shall
apply to the commissioner for a principal manager license under this
chapter.
(d) The commissioner may request evidence of compliance with
this section at any of the following times:
(1) The time of application for an initial license.
(2) The time of renewal of a license.
(3) Any other time considered necessary by the commissioner.
(e) For purposes of subsection (d), evidence of compliance with
this section must include a criminal background check, including a
national criminal history background check (as defined in
IC 10-13-3-12) by the Federal Bureau of Investigation.
(f) A unique identifier obtained by an individual from the
Nationwide Mortgage Licensing System and Registry under
subsection (b) or (c) may not be used for purposes other than those
set forth in the S.A.F.E. Mortgage Licensing Act of 2008 (Title V of
P.L.110-289). As added by P.L.235-1985, SEC.1. Amended by P.L.230-1999,
SEC.2; P.L.230-2007, SEC.7; P.L.145-2008, SEC.11; P.L.156-2009,
SEC.2.
IC 23-2-5-5 Applications for licenses; contents; bond; expiration; service of
process; criminal background checks; consumer reports; financial
responsibility
Sec. 5. (a) An application for a loan broker license or renewal of
a loan broker license must contain:
(1) consent to service of process under subsection (g);
(2) evidence of the bond required in subsection (d);
(3) an application fee of two hundred dollars ($200), plus one
hundred dollars ($100) for each ultimate equitable owner;
(4) an affidavit affirming that none of the applicant's ultimate
equitable owners, directors, managers, or officers have been
convicted, in any jurisdiction, of:
(A) any felony within the previous seven (7) years; or
(B) an offense involving fraud or deception that is
punishable by at least one (1) year of imprisonment;
unless such an affidavit is waived by the commissioner under
subsection (h);
(5) evidence that the applicant, if the applicant is an individual,
has completed the education requirements under section 21 of
this chapter;
(6) the name and license number for each mortgage loan
originator to be employed by the licensee;
(7) the name and license number for each principal manager;
and
(8) for each ultimate equitable owner, the following
information:
(A) The name of the ultimate equitable owner.
(B) The address of the ultimate equitable owner, including
the home address of the ultimate equitable owner if the
ultimate equitable owner is an individual.
(C) The telephone number of the ultimate equitable owner,
including the home telephone number if the ultimate
equitable owner is an individual.
(D) The ultimate equitable owner's Social Security number
and date of birth, if the ultimate equitable owner is an
individual.
(b) An application for licensure as a mortgage loan originator
shall be made on a form prescribed by the commissioner. The
application must include the following information for the individual
that seeks to be licensed as a mortgage loan originator:
(1) The name of the individual.
(2) The home address of the individual.
(3) The home telephone number of the individual.
(4) The individual's Social Security number and date of birth.
(5) The name of the:
(A) loan broker licensee; or
(B) applicant for loan broker licensure;
for whom the individual seeks to be employed as a mortgage
loan originator.
(6) Consent to service of process under subsection (g).
(7) Evidence that the individual has completed the education
requirements described in section 21 of this chapter.
(8) An application fee of fifty dollars ($50).
(9) All:
(A) registration numbers previously issued to the individual
under this chapter, if the applicant was registered as an
originator or a principal manager under this chapter before
July 1, 2009; and
(B) license numbers previously issued to the individual
under this chapter, if applicable.
(c) An application for licensure as a principal manager shall be
made on a form prescribed by the commissioner. The application
must include the following information for the individual who seeks
to be licensed as a principal manager:
(1) The name of the individual.
(2) The home address of the individual.
(3) The home telephone number of the individual.
(4) The individual's Social Security number and date of birth.
(5) The name of the:
(A) loan broker licensee; or
(B) applicant for loan broker licensure;
for whom the individual seeks to be employed as a principal
manager.
(6) Consent to service of process under subsection (g).
(7) Evidence that the individual has completed the education
requirements described in section 21 of this chapter.
(8) Evidence that the individual has at least three (3) years of
experience in the:
(A) loan brokerage; or
(B) financial services;
business.
(9) An application fee of one hundred dollars ($100).
(10) All:
(A) registration numbers previously issued to the individual
under this chapter, if the applicant was registered as an
originator or a principal manager under this chapter before
July 1, 2009; and
(B) license numbers previously issued to the individual
under this chapter, if applicable.
(d) A loan broker licensee must maintain a bond satisfactory to
the commissioner, which must cover the activities of each licensed
mortgage loan originator and licensed principal manager employed
by the loan broker licensee. The bond must be in one (1) of the
following amounts, depending on the total amount of residential
mortgage loans originated by the loan broker in the previous calendar
year:
(1) Fifty thousand dollars ($50,000) if the total amount of
residential mortgage loans originated by the loan broker in the
previous calendar year was not greater than five million dollars
($5,000,000).
(2) Sixty thousand dollars ($60,000) if the total amount of
residential mortgage loans originated by the loan broker in the
previous calendar year was greater than five million dollars
($5,000,000) but not greater than twenty million dollars
($20,000,000).
(3) Seventy-five thousand dollars ($75,000) if the total amount
of residential mortgage loans originated by the loan broker in
the previous calendar year was greater than twenty million
dollars ($20,000,000).
The bond shall be in favor of the state and shall secure payment of
damages to any person aggrieved by any violation of this chapter by
the licensee or any licensed mortgage loan originator or licensed
principal manager employed by the licensee.
(e) The commissioner shall issue a license and license number to
an applicant for a loan broker license, a mortgage loan originator
license, or a principal manager license if the applicant meets the
applicable licensure requirements set forth in this chapter.
(f) Licenses issued by the commissioner under this chapter expire
on December 31 of the year in which they are issued.
(g) Every applicant for licensure or for renewal of a license shall
file with the commissioner, in such form as the commissioner by rule
or order prescribes, an irrevocable consent appointing the secretary
of state to be the applicant's agent to receive service of any lawful
process in any noncriminal suit, action, or proceeding against the
applicant arising from the violation of any provision of this chapter.
Service shall be made in accordance with the Indiana Rules of Trial
Procedure.
(h) Upon good cause shown, the commissioner may waive the
requirements of subsection (a)(4) for one (1) or more of an
applicant's ultimate equitable owners, directors, managers, or
officers.
(i) Whenever an initial or a renewal application for a license is
denied or withdrawn, the commissioner shall retain the initial or
renewal application fee paid.
(j) At the time of application for an initial license under this
chapter, the commissioner shall require each:
(1) equitable owner, in the case of an applicant for a loan broker
license;
(2) individual described in subsection (a)(4), in the case of an
applicant for a loan broker license; and
(3) applicant for licensure as:
(A) a mortgage loan originator; or
(B) a principal manager;
to submit fingerprints for a national criminal history background
check (as defined in IC 10-13-3-12) by the Federal Bureau of
Investigation, for use by the commissioner in determining whether
the equitable owner, the individual described in subsection (a)(4), or
the applicant should be denied licensure under this chapter for any
reason set forth in section 10(c) or 10(d) of this chapter. The
equitable owner, individual described in subsection (a)(4), or
applicant shall pay any fees or costs associated with the fingerprints
and background check required under this subsection. The
commissioner may not release the results of a background check
described in this subsection to any private entity.
(k) Every three (3) years, beginning with the third calendar year
following the calendar year in which an initial license is issued under
this chapter, the commissioner shall require each:
(1) equitable owner, in the case of a loan broker licensee;
(2) individual described in subsection (a)(4), in the case of a
loan broker licensee; and
(3) licensed:
(A) mortgage loan originator; or
(B) principal manager;
to submit fingerprints for a national criminal history background
check (as defined in IC 10-13-3-12) by the Federal Bureau of
Investigation, for use by the commissioner in determining whether
the equitable owner, the individual described in subsection (a)(4), or
the licensee should be denied continued licensure under this chapter
for any reason set forth in section 10(c) of this chapter. The equitable
owner, individual described in subsection (a)(4), or licensee shall pay
any fees or costs associated with the fingerprints and background
check required under this subsection. The commissioner may not
release the results of a background check described in this subsection
to any private entity.
(l) The commissioner shall require each applicant for licensure as:
(1) a mortgage loan originator; or
(2) a principal manager;
to submit written authorization for the commissioner or an agent of
the commissioner to obtain a consumer report (as defined in
IC 24-5-24-2) concerning the applicant.
(m) In reviewing a consumer report obtained under subsection (l),
the commissioner may consider one (1) or more of the following in
determining whether an individual described in subsection (l) has
demonstrated financial responsibility:
(1) Bankruptcies filed by the individual within the most recent
ten (10) years.
(2) Current outstanding civil judgments against the individual,
except judgments resulting solely from medical expenses owed
by the individual.
(3) Current outstanding tax liens or other government liens or
filings.
(4) Foreclosure actions filed within the most recent three (3)
years against property owned by the individual.
(5) Any pattern of seriously delinquent accounts associated with
the individual during the most recent three (3) years. As added by P.L.235-1985, SEC.1. Amended by P.L.247-1987,
SEC.2; P.L.113-1992, SEC.4; P.L.11-1996, SEC.18; P.L.230-1999,
SEC.3; P.L.115-2001, SEC.2; P.L.230-2007, SEC.8; P.L.3-2008,
SEC.167; P.L.145-2008, SEC.12; P.L.156-2009, SEC.3.
IC 23-2-5-5.5 Written examination; subject areas; passing and retaking
examination
Sec. 5.5. (a) The commissioner shall require an applicant for
licensure as:
(1) a mortgage loan originator under section 5(b) of this
chapter; or
(2) a principal manager under section 5(c) of this chapter;
to pass a written examination prepared and administered by the
commissioner or an agent appointed by the commissioner and
approved by the Nationwide Mortgage Licensing System and
Registry.
(b) The written examination required by this section must measure
the applicant's knowledge and comprehension in appropriate subject
areas, including the following:
(1) Ethics.
(2) Federal laws and regulations concerning the origination of
residential mortgage loans.
(3) State laws and rules concerning the origination of residential
mortgage loans.
(c) An individual who answers at least seventy-five percent (75%)
of the questions on the written examination correctly is considered
to have passed the examination.
(d) An individual who does not pass the written examination may
retake the examination up to two (2) additional times, with each
subsequent attempt occurring at least thirty (30) days after the
individual last sat for the examination. If an individual fails three (3)
consecutive examinations, the individual must wait to retake the
examination until at least six (6) months after the individual sat for
the third examination.
(e) If an individual who has been issued a mortgage loan
originator license or a principal manager license under this chapter:
(1) allows the individual's license to lapse; or
(2) otherwise does not maintain a valid license under this
chapter;
for a period of at least five (5) years, the individual must retake the
written examination required by this section. As added by P.L.156-2009, SEC.4.
IC 23-2-5-6 Renewal of licenses
Sec. 6. A loan broker licensee may not continue engaging in the
loan brokerage business unless the licensee's license is renewed
annually. A mortgage loan originator licensee or a principal manager
licensee may not continue acting as:
(1) a mortgage loan originator; or
(2) a principal manager;
unless the licensee's license is renewed annually. A licensee under
this chapter shall renew its license by filing with the commissioner,
at least thirty (30) days before the expiration of the license, an
application containing any information the commissioner may
require to indicate any material change from the information
contained in the applicant's original application or any previous
application. As added by P.L.235-1985, SEC.1. Amended by P.L.11-1996,
SEC.19; P.L.230-1999, SEC.4; P.L.115-2001, SEC.3; P.L.145-2008,
SEC.13; P.L.156-2009, SEC.5.
IC 23-2-5-7 Loan broker regulation account
Sec. 7. (a) The loan broker regulation account is created in the
state general fund. The money in the loan broker regulation account
may be used only for the regulation of loan brokers, mortgage loan
originators, and principal managers under this chapter. The loan
broker regulation account shall be administered by the treasurer of
state. The money in the loan broker regulation account does not
revert to any other account within the state general fund at the end of
a state fiscal year.
(b) Except as provided in subsection (c), all fees and funds
accruing from the administration of this chapter shall be accounted
for by the commissioner and shall be deposited with the treasurer of
state who shall deposit them in the loan broker regulation account in
the state general fund.
(c) All expenses incurred in the administration of this chapter
shall be paid from appropriations made from the state general fund.
However, costs of investigations incurred under this chapter shall be
paid from, and civil penalties recovered under this chapter shall be
deposited in, the securities division enforcement account created
under IC 23-19-6-1(f). The funds in the securities division
enforcement account shall be available, with the approval of the
budget agency, to augment and supplement the funds appropriated
for the administration of this chapter. As added by P.L.235-1985, SEC.1. Amended by P.L.115-2001,
SEC.4; P.L.27-2007, SEC.18; P.L.156-2009, SEC.6.
IC 23-2-5-8
Repealed
(Repealed by P.L.113-1992, SEC.10.)
IC 23-2-5-9 Statute of frauds; required statement
Sec. 9. (a) To be enforceable, every contract for the services of a
loan broker shall be in writing and signed by the contracting parties.
(b) At the time a contract for the services of a loan broker is
signed, the loan broker shall provide a copy of the signed contract to
each of the other parties to the contract.
(c) Every contract for the services of a loan broker must include
the following statement:
"No statement or representation by a loan broker is valid or
enforceable unless the statement or representation is in writing."
(d) This section does not apply to a contract that provides for the
payment of referral fees by a lender or a third party. As added by P.L.235-1985, SEC.1. Amended by P.L.113-1992,
SEC.5; P.L.230-2007, SEC.9.
IC 23-2-5-9.1 Real estate appraisals; improper influence; ownership interest in
appraisal company
Sec. 9.1. (a) As used in this section, "appraisal company" means
a business entity that:
(1) performs real estate appraisals on a regular basis for
compensation through one (1) or more owners, officers,
employees, or agents; or
(2) holds itself out to the public as performing real estate
appraisals.
(b) As used in this section, "immediate family", with respect to an
individual, refers to:
(1) the individual's spouse who resides in the individual's
household; and
(2) any dependent child of the individual.
(c) As used in this section, "real estate appraiser" means a person
who:
(1) is licensed as a real estate broker under IC 25-34.1 and
performs real estate appraisals within the scope of the person's
license;
(2) holds a real estate appraiser license or certificate issued
under IC 25-34.1-3-8; or
(3) otherwise performs real estate appraisals in Indiana.
(d) A person licensed under this chapter, or a person required to
be licensed under this chapter, shall not knowingly bribe, coerce, or
intimidate another person to corrupt or improperly influence the
independent judgment of a real estate appraiser with respect to the
value of any real estate offered as security for a residential mortgage
loan.
(e) Except as provided in subsection (f):
(1) a person licensed under this chapter, or a person required to
be licensed under this chapter;
(2) a member of the immediate family of:
(A) a person licensed under this chapter; or
(B) a person required to be licensed under this chapter; or
(3) a person described in subdivision (1) or (2) in combination
with one (1) or more other persons described in subdivision (1)
or (2);
may not own or control a majority interest in an appraisal company.
(f) This subsection applies to a person or combination of persons
described in subsection (e) who own or control a majority interest in
an appraisal company on June 30, 2007. The prohibition set forth in
subsection (e) does not apply to a person or combination of persons
described in this subsection, subject to the following:
(1) The interest in the appraisal company owned or controlled
by the person or combination of persons described in subsection
(e) shall not be increased after June 30, 2007.
(2) The interest of a person licensed under this chapter, or of a
person required to be licensed under this chapter, shall not be
transferred to a member of the person's immediate family.
(3) If the commissioner determines that any person or
combination of persons described in subsection (e) has violated
this chapter, the commissioner may order one (1) or more of the
persons to divest their interest in the appraisal company. The
commissioner may exercise the remedy provided by this
subdivision in addition to, or as a substitute for, any other
remedy available to the commissioner under this chapter. As added by P.L.230-2007, SEC.10. Amended by P.L.156-2009,
SEC.7.
IC 23-2-5-10 Violations; investigation by commissioner; orders and notices;
hearing; denial, suspension, or revocation of license; censure;
summary orders; transfer or termination of license; change of
material fact or statement
Sec. 10. (a) Whenever it appears to the commissioner that a
person has engaged in or is about to engage in an act or a practice
constituting a violation of this chapter or a rule or an order under this
chapter, the commissioner may investigate and may issue, with a
prior hearing if there exists no substantial threat of immediate
irreparable harm or without a prior hearing, if there exists a
substantial threat of immediate irreparable harm, orders and notices
as the commissioner determines to be in the public interest, including
cease and desist orders, orders to show cause, and notices. After
notice and hearing, the commissioner may enter an order of
rescission, restitution, or disgorgement, including interest at the rate
of eight percent (8%) per year, directed to a person who has violated
this chapter or a rule or order under this chapter.
(b) Upon the issuance of an order or notice without a prior hearing
by the commissioner under subsection (a), the commissioner shall
promptly notify the respondent and, if the subject of the order or
notice is a mortgage loan originator licensee or a principal manager
licensee, the loan broker licensee for whom the mortgage loan
originator or principal manager is employed:
(1) that the order or notice has been issued;
(2) of the reasons the order or notice has been issued; and
(3) that upon the receipt of a written request the matter will be
set for a hearing to commence not later than fifteen (15)
business days after receipt of the request if the original order
issued by the commissioner was a summary suspension,
summary revocation, or denial of a license and not later than
forty-five (45) business days after receipt of the request for all
other orders unless the respondent consents to a later date.
If a hearing is not requested and not ordered by the commissioner, an
order remains in effect until it is modified or vacated by the
commissioner. If a hearing is requested or ordered, the
commissioner, after notice of an opportunity for hearing, may modify
or vacate the order or extend it until final determination.
(c) The commissioner may deny an application for an initial or a
renewal license, and may suspend or revoke the license of a licensee
if the applicant, the licensee, or an ultimate equitable owner of an
applicant for a loan broker license or of a loan broker licensee:
(1) has, within the most recent ten (10) years:
(A) been the subject of an adjudication or a determination
by:
(i) a court with jurisdiction; or
(ii) an agency or administrator that regulates securities,
commodities, banking, financial services, insurance, real
estate, or the real estate appraisal industry;
in Indiana or in any other jurisdiction; and
(B) been found, after notice and opportunity for hearing, to
have violated the securities, commodities, banking, financial
services, insurance, real estate, or real estate appraisal laws
of Indiana or any other jurisdiction;
(2) except as provided in subsection (d)(1) with respect to the
loan brokerage business, has:
(A) been denied the right to do business in the securities,
commodities, banking, financial services, insurance, real
estate, or real estate appraisal industry; or
(B) had the person's authority to do business in the
securities, commodities, banking, financial services,
insurance, real estate, or real estate appraisal industry
revoked or suspended;
by Indiana or by any other state, federal, or foreign
governmental agency or self regulatory organization;
(3) is insolvent;
(4) has violated any provision of this chapter;
(5) has knowingly filed with the commissioner any document or
statement that:
(A) contains a false representation of a material fact;
(B) fails to state a material fact; or
(C) contains a representation that becomes false after the
filing but during the term of a license as provided in
subsection (j);
(6) has been convicted, within ten (10) years before the date of
the application, renewal, or review, of any crime, other than a
felony, involving fraud or deceit;
(7) if the person is a loan broker licensee or a principal
manager, has failed to reasonably supervise the person's
mortgage loan originators or employees to ensure their
compliance with this chapter;
(8) is on the most recent tax warrant list supplied to the
commissioner by the department of state revenue; or
(9) has engaged in dishonest or unethical practices in the loan
brokerage business, as determined by the commissioner.
(d) The commissioner shall deny an application for an initial or a
renewal license and shall revoke the license of a licensee if the
applicant, the licensee, or an ultimate equitable owner of an applicant
for a loan broker license or of a loan broker licensee:
(1) has had a:
(A) loan broker license issued under this chapter;
(B) mortgage loan originator license issued under this
chapter;
(C) principal manager license issued under this chapter; or
(D) license that is:
(i) equivalent to a license described in clause (A), (B), or
(C); and
(ii) issued by another jurisdiction;
revoked by the commissioner or the appropriate regulatory
agency in another jurisdiction, whichever applies;
(2) has been convicted of or pleaded guilty or nolo contendere
to a felony in a domestic, foreign, or military court:
(A) during the seven (7) year period immediately preceding
the date of the application or review; or
(B) at any time preceding the date of the application or
review if the felony involved an act of fraud or dishonesty,
a breach of trust, or money laundering;
(3) fails to maintain the bond required under section 5(d) of this
chapter;
(4) fails to demonstrate the financial responsibility, character,
and general fitness necessary to:
(A) command the confidence of the community in which the
applicant or licensee engages or will engage in the loan
brokerage business; and
(B) warrant a determination by the commissioner that the
applicant or licensee will operate honestly, fairly, and
efficiently within the purposes of this chapter;
(5) has failed to meet the education requirements set forth in
section 21 of this chapter;
(6) has failed to pass the written examination required by
section 5.5 of this chapter; or
(7) fails to:
(A) keep or maintain records in accordance with section 18
of this chapter; or
(B) allow the commissioner or an agent appointed by the
commissioner to inspect or examine a loan broker licensee's
books and records to determine compliance with section 18
of this chapter.
(e) The commissioner may do either of the following:
(1) Censure:
(A) a licensee;
(B) an officer, a director, or an ultimate equitable owner of
a loan broker licensee; or
(C) any other person;
who violates or causes a violation of this chapter.
(2) Permanently bar any person described in subdivision (1)
from being:
(A) licensed under this chapter; or
(B) employed by or affiliated with a person licensed under
this chapter;
if the person violates or causes a violation of this chapter.
(f) The commissioner may not enter a final order:
(1) denying, suspending, or revoking the license of an applicant
or a licensee; or
(2) imposing other sanctions;
without prior notice to all interested parties, opportunity for a
hearing, and written findings of fact and conclusions of law.
However, the commissioner may by summary order deny, suspend,
or revoke a license pending final determination of any proceeding
under this section or before any proceeding is initiated under this
section. Upon the entry of a summary order, the commissioner shall
promptly notify all interested parties that the summary order has
been entered, of the reasons for the summary order, and that upon
receipt by the commissioner of a written request from a party, the
matter will be set for hearing to commence not later than forty-five
(45) business days after receipt of the request. If no hearing is
requested and none is ordered by the commissioner, the order
remains in effect until it is modified or vacated by the commissioner.
If a hearing is requested or ordered, the commissioner, after notice
of the hearing has been given to all interested persons and the
hearing has been held, may modify or vacate the order or extend it
until final determination.
(g) IC 4-21.5 does not apply to a proceeding under this section.
(h) If a mortgage loan originator licensee or a principal manager
licensee seeks to transfer the licensee's license to another loan broker
licensee who desires to have the mortgage loan originator licensee or
principal manager licensee act as a mortgage loan originator or as a
principal manager, whichever applies, the mortgage loan originator
licensee or principal manager licensee shall, before the mortgage
loan originator licensee or principal manager licensee acts as a
mortgage loan originator or as a principal manager for the new
employer, submit to the commissioner, on a form prescribed by the
commissioner, a license application, as required by section 5 of this
chapter.
(i) If the employment of a mortgage loan originator licensee or
principal manager licensee is terminated, whether:
(1) voluntarily by the mortgage loan originator licensee or
principal manager licensee; or
(2) by the loan broker licensee employing the mortgage loan
originator licensee or principal manager licensee;
the loan broker licensee that employed the mortgage loan originator
licensee or principal manager licensee shall, not later than five (5)
days after the termination, notify the commissioner of the
termination and the reasons for the termination.
(j) If a material fact or statement included in an application under
this chapter changes after the application has been submitted, the
applicant shall provide written notice to the commissioner of the
change. The commissioner may deny, revoke, or refuse to renew a
license applied for or held by any person who:
(1) is required to submit a written notice under this subsection
and fails to provide the required notice within two (2) business
days after the person discovers or should have discovered the
change; or
(2) would not qualify for licensure under this chapter as a result
of the change in a material fact or statement. As added by P.L.235-1985, SEC.1. Amended by P.L.11-1996,
SEC.20; P.L.230-1999, SEC.5; P.L.14-2000, SEC.53; P.L.270-2003,
SEC.3; P.L.48-2006, SEC.7; P.L.230-2007, SEC.11; P.L.145-2008,
SEC.14; P.L.156-2009, SEC.8.
IC 23-2-5-11 Powers and duties of commissioner; use immunity for witnesses;
certificate of compliance or noncompliance; authority to compel
compliance; multistate automated licensing system and repository
Sec. 11. (a) The commissioner may do the following:
(1) Adopt rules under IC 4-22-2 to implement this chapter.
(2) Make investigations and examinations:
(A) in connection with any application for licensure under
this chapter or with any license already granted; or
(B) whenever it appears to the commissioner, upon the basis
of a complaint or information, that reasonable grounds exist
for the belief that an investigation or examination is
necessary or advisable for the more complete protection of
the interests of the public.
(3) Charge as costs of investigation or examination all
reasonable expenses, including a per diem prorated upon the
salary of the commissioner or employee and actual traveling
and hotel expenses. All reasonable expenses are to be paid by
the party or parties under investigation or examination if the
party has violated this chapter.
(4) Issue notices and orders, including cease and desist notices
and orders, after making an investigation or examination under
subdivision (2). The commissioner shall notify the person that
an order or notice has been issued, the reasons for it, and that a
hearing will be set not later than fifteen (15) business days after
the commissioner receives a written request from the person
requesting a hearing if the original order issued by the
commissioner was a summary suspension, summary revocation,
or denial of a license and not later than forty-five (45) business
days after the commissioner receives a written request from the
person requesting a hearing for all other orders.
(5) Sign all orders, official certifications, documents, or papers
issued under this chapter or delegate the authority to sign any
of those items to a deputy.
(6) Hold and conduct hearings.
(7) Hear evidence.
(8) Conduct inquiries with or without hearings.
(9) Receive reports of investigators or other officers or
employees of the state of Indiana or of any municipal
corporation or governmental subdivision within the state.
(10) Administer oaths, or cause them to be administered.
(11) Subpoena witnesses, and compel them to attend and testify.
(12) Compel the production of books, records, and other
documents.
(13) Order depositions to be taken of any witness residing
within or without the state. The depositions shall be taken in the
manner prescribed by law for depositions in civil actions and
made returnable to the commissioner.
(14) Order that each witness appearing under the
commissioner's order to testify before the commissioner shall
receive the fees and mileage allowances provided for witnesses
in civil cases.
(15) Provide interpretive opinions or issue determinations that
the commissioner will not institute a proceeding or an action
under this chapter against a specified person for engaging in a
specified act, practice, or course of business if the
determination is consistent with this chapter. The commissioner
may adopt rules to establish fees for individuals requesting an
interpretive opinion or a determination under this subdivision.
A person may not request an interpretive opinion or a
determination concerning an activity that:
(A) occurred before; or
(B) is occurring on;
the date the opinion or determination is requested.
IC 23-2-5-1 "Commissioner" defined
Sec. 1. As used in this chapter, "commissioner" refers to the
securities commissioner appointed under IC 23-19-6-1(a). As added by P.L.235-1985, SEC.1. Amended by P.L.27-2007,
SEC.17.
IC 23-2-5-2 "Loan" defined
Sec. 2. As used in this chapter, "loan" means any agreement to
advance money or property in return for the promise to make
payments for the money or property. As added by P.L.235-1985, SEC.1.
IC 23-2-5-3 Definitions
Sec. 3. (a) As used in this chapter, "loan broker license" means a
license issued by the commissioner authorizing a person to engage
in the loan brokerage business.
(b) As used in this chapter, "licensee" means a person that is
issued a license under this chapter.
(c) As used in this chapter, "loan broker" means any person who,
in return for any consideration from any source procures, attempts to
procure, or assists in procuring, a residential mortgage loan from a
third party or any other person, whether or not the person seeking the
loan actually obtains the loan. "Loan broker" does not include:
(1) any supervised financial organization (as defined in
IC 26-1-4-102.5), including a bank, savings bank, trust
company, savings association, or credit union;
(2) any other financial institution that is:
(A) regulated by any agency of the United States or any
state; and
(B) regularly actively engaged in the business of making
consumer loans that are not secured by real estate or taking
assignment of consumer sales contracts that are not secured
by real estate;
(3) any insurance company;
(4) any person arranging financing for the sale of the person's
product; or
(5) a creditor that is licensed under IC 24-4.4-2-402.
(d) As used in this chapter, "loan brokerage business" means a
person acting as a loan broker.
(e) As used in this chapter, "mortgage loan origination activities"
means performing any of the following activities for compensation
or gain in connection with a residential mortgage loan:
(1) Receiving or recording a borrower's or potential borrower's
residential mortgage loan application information in any form
for use in a credit decision by a creditor.
(2) Offering to negotiate or negotiating terms of a residential
mortgage loan.
(f) As used in this chapter, "borrower's residential mortgage loan
application information" means the address of the proposed
residential real property to be mortgaged and borrower's essential
personal and financial information necessary for an informed credit
decision to be made on the borrower's mortgage loan application.
(g) As used in this chapter, "mortgage loan originator" means an
individual engaged in mortgage loan origination activities. The term
does not include a person who:
(1) performs purely administrative or clerical tasks on behalf of
a mortgage loan originator or acts as a loan processor or
underwriter;
(2) performs only real estate brokerage activities and is licensed
in accordance with IC 25-34.1 or the applicable laws of another
state, unless the person is compensated by a creditor, a loan
broker, a mortgage loan originator, or any agent of a creditor, a
loan broker, or a mortgage loan originator; or
(3) is involved only in extensions of credit relating to time share
plans (as defined in 11 U.S.C. 101(53D)).
(h) As used in this chapter, "mortgage loan originator license"
means a license issued by the commissioner authorizing an
individual to act as a mortgage loan originator on behalf of a loan
broker licensee.
(i) As used in this chapter, "person" means an individual, a
partnership, a trust, a corporation, a limited liability company, a
limited liability partnership, a sole proprietorship, a joint venture, a
joint stock company, or another group or entity, however organized.
(j) As used in this chapter, "ultimate equitable owner" means a
person who, directly or indirectly, owns or controls ten percent
(10%) or more of the equity interest in a loan broker licensed or
required to be licensed under this chapter, regardless of whether the
person owns or controls the equity interest through one (1) or more
other persons or one (1) or more proxies, powers of attorney, or
variances.
(k) As used in this chapter, "principal manager" means an
individual who:
(1) has at least three (3) years of experience:
(A) as a mortgage loan originator; or
(B) in financial services;
that is acceptable to the commissioner; and
(2) is principally responsible for the supervision and
management of the employees and business affairs of a loan
broker licensee.
(l) As used in this chapter, "principal manager license" means a
license issued by the commissioner authorizing an individual to act
as:
(1) a principal manager; and
(2) a mortgage loan originator;
on behalf of a loan broker licensee.
(m) As used in this chapter, "bona fide third party fee", with
respect to a residential mortgage loan, includes any of the following:
(1) Fees for real estate appraisals. However, if the residential
mortgage loan is governed by Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act (12 U.S.C.
3331 through 3352), the fee for an appraisal performed in
connection with the loan is not a bona fide third party fee unless
the appraisal is performed by a person that is licensed or
certified under IC 25-34.1-3-8.
(2) Fees for title examination, abstract of title, title insurance,
property surveys, or similar purposes.
(3) Notary and credit report fees.
(4) Fees for the services provided by a loan broker in procuring
possible business for a creditor if the fees are paid by the
creditor.
(n) As used in this chapter, "branch office" means any fixed
physical location from which a loan broker licensee holds itself out
as engaging in the loan brokerage business.
(o) As used in this chapter, "loan processor or underwriter" means
an individual who:
(1) is employed by a loan broker licensee and acts at the
direction of, and subject to the supervision of, the loan broker
licensee or a licensed principal manager employed by the loan
broker licensee; and
(2) performs solely clerical or support duties on behalf of the
loan broker licensee, including any of the following activities
with respect to a residential mortgage loan application received
by the loan broker licensee:
(A) The receipt, collection, distribution, and analysis of
information commonly used in the processing or
underwriting of a residential mortgage loan.
(B) Communicating with a borrower or potential borrower
to obtain the information necessary for the processing or
underwriting of a residential mortgage loan, to the extent
that the communication does not include:
(i) offering or negotiating loan rates or terms; or
(ii) counseling borrowers or potential borrowers about
residential mortgage loan rates or terms.
(p) As used in this chapter, "real estate brokerage activity" means
any activity that involves offering or providing real estate brokerage
services to the public, including any of the following:
(1) Acting as a real estate broker or salesperson for a buyer,
seller, lessor, or lessee of real property.
(2) Bringing together parties interested in the sale, lease, or
exchange of real property.
(3) Negotiating, on behalf of any party, any part of a contract
concerning the sale, lease, or exchange of real property, other
than in connection with obtaining or providing financing for the
transaction.
(4) Engaging in any activity for which the person performing
the activity is required to be licensed under IC 25-34.1 or the
applicable laws of another state.
(5) Offering to engage in any activity, or to act in any capacity
with respect to any activity, described in subdivisions (1)
through (4).
(q) As used in this chapter, "registered mortgage loan originator"
means a mortgage loan originator who:
(1) is an employee of:
(A) a depository institution;
(B) a subsidiary that is:
(i) owned and controlled by a depository institution; and
(ii) regulated by a federal financial institution regulatory
agency (as defined in 12 U.S.C. 3350(6)); or
(C) an institution regulated by the Farm Credit
Administration; and
(2) is registered with and maintains a unique identifier with the
Nationwide Mortgage Licensing System and Registry.
(r) As used in this chapter, "residential mortgage loan" means a
loan that is secured by a mortgage, deed of trust, or other consensual
security interest on real estate in Indiana on which there is located or
intended to be constructed a dwelling (as defined in the federal Truth
in Lending Act (15 U.S.C. 1602(v)) that is or will be used primarily
for personal, family, or household purposes.
(s) As used in this chapter, "personal information" includes any
of the following:
(1) An individual's first and last names or first initial and last
name.
(2) Any of the following data elements:
(A) A Social Security number.
(B) A driver's license number.
(C) A state identification card number.
(D) A credit card number.
(E) A financial account number or debit card number in
combination with a security code, password, or access code
that would permit access to the person's account.
(3) With respect to an individual, any of the following:
(A) Address.
(B) Telephone number.
(C) Information concerning the individual's:
(i) income or other compensation;
(ii) credit history;
(iii) credit score;
(iv) assets;
(v) liabilities; or
(vi) employment history.
(t) As used in this chapter, personal information is "encrypted" if
the personal information:
(1) has been transformed through the use of an algorithmic
process into a form in which there is a low probability of
assigning meaning without use of a confidential process or key;
or
(2) is secured by another method that renders the personal
information unreadable or unusable.
(u) As used in this chapter, personal information is "redacted" if
the personal information has been altered or truncated so that not
more than the last four (4) digits of:
(1) a Social Security number;
(2) a driver's license number;
(3) a state identification number; or
(4) an account number;
are accessible as part of the personal information.
(v) As used in this chapter, "depository institution" has the
meaning set forth in the Federal Deposit Insurance Act (12 U.S.C.
1813(c)) and includes any credit union.
(w) As used in this chapter, "state licensed mortgage loan
originator" means any individual who:
(1) is a mortgage loan originator;
(2) is not an employee of:
(A) a depository institution;
(B) a subsidiary that is:
(i) owned and controlled by a depository institution; and
(ii) regulated by a federal financial institution regulatory
agency (as defined in 12 U.S.C. 3350(6)); or
(C) an institution regulated by the Farm Credit
Administration;
(3) is licensed by a state or by the Secretary of the United States
Department of Housing and Urban Development under Section
1508 of the S.A.F.E. Mortgage Licensing Act of 2008 (Title V
of P.L.110-289); and
(4) is registered as a mortgage loan originator with, and
maintains a unique identifier through, the Nationwide Mortgage
Licensing System and Registry.
(x) As used in this chapter, "unique identifier" means a number or
other identifier that:
(1) permanently identifies a mortgage loan originator; and
(2) is assigned by protocols established by the Nationwide
Mortgage Licensing System and Registry and the federal
financial institution regulatory agencies to facilitate:
(A) the electronic tracking of mortgage loan originators; and
(B) the uniform identification of, and public access to, the
employment history of and the publicly adjudicated
disciplinary and enforcement actions against mortgage loan
originators. As added by P.L.235-1985, SEC.1. Amended by P.L.247-1987,
SEC.1; P.L.1-1990, SEC.242; P.L.8-1993, SEC.314; P.L.79-1998,
SEC.22; P.L.230-1999, SEC.1; P.L.14-2000, SEC.52; P.L.115-2001,
SEC.1; P.L.73-2004, SEC.12; P.L.230-2007, SEC.6; P.L.145-2008,
SEC.10; P.L.1-2009, SEC.130; P.L.156-2009, SEC.1; P.L.35-2010,
SEC.4. IC 23-2-5-4 License to engage in loan brokerage business required; license to
act as mortgage loan originator or principal manager required;
unique identifier required; evidence of compliance; criminal
background check
Sec. 4. (a) A person may not engage in the loan brokerage
business in Indiana unless the person first obtains a loan broker
license from the commissioner. Any person desiring to engage or
continue in the loan brokerage business shall apply to the
commissioner for a loan broker license under this chapter.
(b) An individual may not act as a mortgage loan originator in
Indiana on behalf of a person licensed or required to be licensed as
a loan broker under this chapter unless the individual first obtains a
unique identifier from the Nationwide Mortgage Licensing System
and Registry and a mortgage loan originator license from the
commissioner. An individual desiring to act as a mortgage loan
originator on behalf of a person licensed or required to be licensed
as a loan broker under this chapter shall apply to the commissioner
for a mortgage loan originator license under this chapter.
(c) An individual may not act as a principal manager on behalf of
a person licensed or required to be licensed as a loan broker under
this chapter unless the individual first obtains a unique identifier
from the Nationwide Mortgage Licensing System and Registry and
a principal manager license from the commissioner. Any individual
desiring to act as a principal manager on behalf of a person licensed
or required to be licensed as a loan broker under this chapter shall
apply to the commissioner for a principal manager license under this
chapter.
(d) The commissioner may request evidence of compliance with
this section at any of the following times:
(1) The time of application for an initial license.
(2) The time of renewal of a license.
(3) Any other time considered necessary by the commissioner.
(e) For purposes of subsection (d), evidence of compliance with
this section must include a criminal background check, including a
national criminal history background check (as defined in
IC 10-13-3-12) by the Federal Bureau of Investigation.
(f) A unique identifier obtained by an individual from the
Nationwide Mortgage Licensing System and Registry under
subsection (b) or (c) may not be used for purposes other than those
set forth in the S.A.F.E. Mortgage Licensing Act of 2008 (Title V of
P.L.110-289). As added by P.L.235-1985, SEC.1. Amended by P.L.230-1999,
SEC.2; P.L.230-2007, SEC.7; P.L.145-2008, SEC.11; P.L.156-2009,
SEC.2.
IC 23-2-5-5 Applications for licenses; contents; bond; expiration; service of
process; criminal background checks; consumer reports; financial
responsibility
Sec. 5. (a) An application for a loan broker license or renewal of
a loan broker license must contain:
(1) consent to service of process under subsection (g);
(2) evidence of the bond required in subsection (d);
(3) an application fee of two hundred dollars ($200), plus one
hundred dollars ($100) for each ultimate equitable owner;
(4) an affidavit affirming that none of the applicant's ultimate
equitable owners, directors, managers, or officers have been
convicted, in any jurisdiction, of:
(A) any felony within the previous seven (7) years; or
(B) an offense involving fraud or deception that is
punishable by at least one (1) year of imprisonment;
unless such an affidavit is waived by the commissioner under
subsection (h);
(5) evidence that the applicant, if the applicant is an individual,
has completed the education requirements under section 21 of
this chapter;
(6) the name and license number for each mortgage loan
originator to be employed by the licensee;
(7) the name and license number for each principal manager;
and
(8) for each ultimate equitable owner, the following
information:
(A) The name of the ultimate equitable owner.
(B) The address of the ultimate equitable owner, including
the home address of the ultimate equitable owner if the
ultimate equitable owner is an individual.
(C) The telephone number of the ultimate equitable owner,
including the home telephone number if the ultimate
equitable owner is an individual.
(D) The ultimate equitable owner's Social Security number
and date of birth, if the ultimate equitable owner is an
individual.
(b) An application for licensure as a mortgage loan originator
shall be made on a form prescribed by the commissioner. The
application must include the following information for the individual
that seeks to be licensed as a mortgage loan originator:
(1) The name of the individual.
(2) The home address of the individual.
(3) The home telephone number of the individual.
(4) The individual's Social Security number and date of birth.
(5) The name of the:
(A) loan broker licensee; or
(B) applicant for loan broker licensure;
for whom the individual seeks to be employed as a mortgage
loan originator.
(6) Consent to service of process under subsection (g).
(7) Evidence that the individual has completed the education
requirements described in section 21 of this chapter.
(8) An application fee of fifty dollars ($50).
(9) All:
(A) registration numbers previously issued to the individual
under this chapter, if the applicant was registered as an
originator or a principal manager under this chapter before
July 1, 2009; and
(B) license numbers previously issued to the individual
under this chapter, if applicable.
(c) An application for licensure as a principal manager shall be
made on a form prescribed by the commissioner. The application
must include the following information for the individual who seeks
to be licensed as a principal manager:
(1) The name of the individual.
(2) The home address of the individual.
(3) The home telephone number of the individual.
(4) The individual's Social Security number and date of birth.
(5) The name of the:
(A) loan broker licensee; or
(B) applicant for loan broker licensure;
for whom the individual seeks to be employed as a principal
manager.
(6) Consent to service of process under subsection (g).
(7) Evidence that the individual has completed the education
requirements described in section 21 of this chapter.
(8) Evidence that the individual has at least three (3) years of
experience in the:
(A) loan brokerage; or
(B) financial services;
business.
(9) An application fee of one hundred dollars ($100).
(10) All:
(A) registration numbers previously issued to the individual
under this chapter, if the applicant was registered as an
originator or a principal manager under this chapter before
July 1, 2009; and
(B) license numbers previously issued to the individual
under this chapter, if applicable.
(d) A loan broker licensee must maintain a bond satisfactory to
the commissioner, which must cover the activities of each licensed
mortgage loan originator and licensed principal manager employed
by the loan broker licensee. The bond must be in one (1) of the
following amounts, depending on the total amount of residential
mortgage loans originated by the loan broker in the previous calendar
year:
(1) Fifty thousand dollars ($50,000) if the total amount of
residential mortgage loans originated by the loan broker in the
previous calendar year was not greater than five million dollars
($5,000,000).
(2) Sixty thousand dollars ($60,000) if the total amount of
residential mortgage loans originated by the loan broker in the
previous calendar year was greater than five million dollars
($5,000,000) but not greater than twenty million dollars
($20,000,000).
(3) Seventy-five thousand dollars ($75,000) if the total amount
of residential mortgage loans originated by the loan broker in
the previous calendar year was greater than twenty million
dollars ($20,000,000).
The bond shall be in favor of the state and shall secure payment of
damages to any person aggrieved by any violation of this chapter by
the licensee or any licensed mortgage loan originator or licensed
principal manager employed by the licensee.
(e) The commissioner shall issue a license and license number to
an applicant for a loan broker license, a mortgage loan originator
license, or a principal manager license if the applicant meets the
applicable licensure requirements set forth in this chapter.
(f) Licenses issued by the commissioner under this chapter expire
on December 31 of the year in which they are issued.
(g) Every applicant for licensure or for renewal of a license shall
file with the commissioner, in such form as the commissioner by rule
or order prescribes, an irrevocable consent appointing the secretary
of state to be the applicant's agent to receive service of any lawful
process in any noncriminal suit, action, or proceeding against the
applicant arising from the violation of any provision of this chapter.
Service shall be made in accordance with the Indiana Rules of Trial
Procedure.
(h) Upon good cause shown, the commissioner may waive the
requirements of subsection (a)(4) for one (1) or more of an
applicant's ultimate equitable owners, directors, managers, or
officers.
(i) Whenever an initial or a renewal application for a license is
denied or withdrawn, the commissioner shall retain the initial or
renewal application fee paid.
(j) At the time of application for an initial license under this
chapter, the commissioner shall require each:
(1) equitable owner, in the case of an applicant for a loan broker
license;
(2) individual described in subsection (a)(4), in the case of an
applicant for a loan broker license; and
(3) applicant for licensure as:
(A) a mortgage loan originator; or
(B) a principal manager;
to submit fingerprints for a national criminal history background
check (as defined in IC 10-13-3-12) by the Federal Bureau of
Investigation, for use by the commissioner in determining whether
the equitable owner, the individual described in subsection (a)(4), or
the applicant should be denied licensure under this chapter for any
reason set forth in section 10(c) or 10(d) of this chapter. The
equitable owner, individual described in subsection (a)(4), or
applicant shall pay any fees or costs associated with the fingerprints
and background check required under this subsection. The
commissioner may not release the results of a background check
described in this subsection to any private entity.
(k) Every three (3) years, beginning with the third calendar year
following the calendar year in which an initial license is issued under
this chapter, the commissioner shall require each:
(1) equitable owner, in the case of a loan broker licensee;
(2) individual described in subsection (a)(4), in the case of a
loan broker licensee; and
(3) licensed:
(A) mortgage loan originator; or
(B) principal manager;
to submit fingerprints for a national criminal history background
check (as defined in IC 10-13-3-12) by the Federal Bureau of
Investigation, for use by the commissioner in determining whether
the equitable owner, the individual described in subsection (a)(4), or
the licensee should be denied continued licensure under this chapter
for any reason set forth in section 10(c) of this chapter. The equitable
owner, individual described in subsection (a)(4), or licensee shall pay
any fees or costs associated with the fingerprints and background
check required under this subsection. The commissioner may not
release the results of a background check described in this subsection
to any private entity.
(l) The commissioner shall require each applicant for licensure as:
(1) a mortgage loan originator; or
(2) a principal manager;
to submit written authorization for the commissioner or an agent of
the commissioner to obtain a consumer report (as defined in
IC 24-5-24-2) concerning the applicant.
(m) In reviewing a consumer report obtained under subsection (l),
the commissioner may consider one (1) or more of the following in
determining whether an individual described in subsection (l) has
demonstrated financial responsibility:
(1) Bankruptcies filed by the individual within the most recent
ten (10) years.
(2) Current outstanding civil judgments against the individual,
except judgments resulting solely from medical expenses owed
by the individual.
(3) Current outstanding tax liens or other government liens or
filings.
(4) Foreclosure actions filed within the most recent three (3)
years against property owned by the individual.
(5) Any pattern of seriously delinquent accounts associated with
the individual during the most recent three (3) years. As added by P.L.235-1985, SEC.1. Amended by P.L.247-1987,
SEC.2; P.L.113-1992, SEC.4; P.L.11-1996, SEC.18; P.L.230-1999,
SEC.3; P.L.115-2001, SEC.2; P.L.230-2007, SEC.8; P.L.3-2008,
SEC.167; P.L.145-2008, SEC.12; P.L.156-2009, SEC.3.
IC 23-2-5-5.5 Written examination; subject areas; passing and retaking
examination
Sec. 5.5. (a) The commissioner shall require an applicant for
licensure as:
(1) a mortgage loan originator under section 5(b) of this
chapter; or
(2) a principal manager under section 5(c) of this chapter;
to pass a written examination prepared and administered by the
commissioner or an agent appointed by the commissioner and
approved by the Nationwide Mortgage Licensing System and
Registry.
(b) The written examination required by this section must measure
the applicant's knowledge and comprehension in appropriate subject
areas, including the following:
(1) Ethics.
(2) Federal laws and regulations concerning the origination of
residential mortgage loans.
(3) State laws and rules concerning the origination of residential
mortgage loans.
(c) An individual who answers at least seventy-five percent (75%)
of the questions on the written examination correctly is considered
to have passed the examination.
(d) An individual who does not pass the written examination may
retake the examination up to two (2) additional times, with each
subsequent attempt occurring at least thirty (30) days after the
individual last sat for the examination. If an individual fails three (3)
consecutive examinations, the individual must wait to retake the
examination until at least six (6) months after the individual sat for
the third examination.
(e) If an individual who has been issued a mortgage loan
originator license or a principal manager license under this chapter:
(1) allows the individual's license to lapse; or
(2) otherwise does not maintain a valid license under this
chapter;
for a period of at least five (5) years, the individual must retake the
written examination required by this section. As added by P.L.156-2009, SEC.4.
IC 23-2-5-6 Renewal of licenses
Sec. 6. A loan broker licensee may not continue engaging in the
loan brokerage business unless the licensee's license is renewed
annually. A mortgage loan originator licensee or a principal manager
licensee may not continue acting as:
(1) a mortgage loan originator; or
(2) a principal manager;
unless the licensee's license is renewed annually. A licensee under
this chapter shall renew its license by filing with the commissioner,
at least thirty (30) days before the expiration of the license, an
application containing any information the commissioner may
require to indicate any material change from the information
contained in the applicant's original application or any previous
application. As added by P.L.235-1985, SEC.1. Amended by P.L.11-1996,
SEC.19; P.L.230-1999, SEC.4; P.L.115-2001, SEC.3; P.L.145-2008,
SEC.13; P.L.156-2009, SEC.5.
IC 23-2-5-7 Loan broker regulation account
Sec. 7. (a) The loan broker regulation account is created in the
state general fund. The money in the loan broker regulation account
may be used only for the regulation of loan brokers, mortgage loan
originators, and principal managers under this chapter. The loan
broker regulation account shall be administered by the treasurer of
state. The money in the loan broker regulation account does not
revert to any other account within the state general fund at the end of
a state fiscal year.
(b) Except as provided in subsection (c), all fees and funds
accruing from the administration of this chapter shall be accounted
for by the commissioner and shall be deposited with the treasurer of
state who shall deposit them in the loan broker regulation account in
the state general fund.
(c) All expenses incurred in the administration of this chapter
shall be paid from appropriations made from the state general fund.
However, costs of investigations incurred under this chapter shall be
paid from, and civil penalties recovered under this chapter shall be
deposited in, the securities division enforcement account created
under IC 23-19-6-1(f). The funds in the securities division
enforcement account shall be available, with the approval of the
budget agency, to augment and supplement the funds appropriated
for the administration of this chapter. As added by P.L.235-1985, SEC.1. Amended by P.L.115-2001,
SEC.4; P.L.27-2007, SEC.18; P.L.156-2009, SEC.6.
IC 23-2-5-8
Repealed
(Repealed by P.L.113-1992, SEC.10.)
IC 23-2-5-9 Statute of frauds; required statement
Sec. 9. (a) To be enforceable, every contract for the services of a
loan broker shall be in writing and signed by the contracting parties.
(b) At the time a contract for the services of a loan broker is
signed, the loan broker shall provide a copy of the signed contract to
each of the other parties to the contract.
(c) Every contract for the services of a loan broker must include
the following statement:
"No statement or representation by a loan broker is valid or
enforceable unless the statement or representation is in writing."
(d) This section does not apply to a contract that provides for the
payment of referral fees by a lender or a third party. As added by P.L.235-1985, SEC.1. Amended by P.L.113-1992,
SEC.5; P.L.230-2007, SEC.9.
IC 23-2-5-9.1 Real estate appraisals; improper influence; ownership interest in
appraisal company
Sec. 9.1. (a) As used in this section, "appraisal company" means
a business entity that:
(1) performs real estate appraisals on a regular basis for
compensation through one (1) or more owners, officers,
employees, or agents; or
(2) holds itself out to the public as performing real estate
appraisals.
(b) As used in this section, "immediate family", with respect to an
individual, refers to:
(1) the individual's spouse who resides in the individual's
household; and
(2) any dependent child of the individual.
(c) As used in this section, "real estate appraiser" means a person
who:
(1) is licensed as a real estate broker under IC 25-34.1 and
performs real estate appraisals within the scope of the person's
license;
(2) holds a real estate appraiser license or certificate issued
under IC 25-34.1-3-8; or
(3) otherwise performs real estate appraisals in Indiana.
(d) A person licensed under this chapter, or a person required to
be licensed under this chapter, shall not knowingly bribe, coerce, or
intimidate another person to corrupt or improperly influence the
independent judgment of a real estate appraiser with respect to the
value of any real estate offered as security for a residential mortgage
loan.
(e) Except as provided in subsection (f):
(1) a person licensed under this chapter, or a person required to
be licensed under this chapter;
(2) a member of the immediate family of:
(A) a person licensed under this chapter; or
(B) a person required to be licensed under this chapter; or
(3) a person described in subdivision (1) or (2) in combination
with one (1) or more other persons described in subdivision (1)
or (2);
may not own or control a majority interest in an appraisal company.
(f) This subsection applies to a person or combination of persons
described in subsection (e) who own or control a majority interest in
an appraisal company on June 30, 2007. The prohibition set forth in
subsection (e) does not apply to a person or combination of persons
described in this subsection, subject to the following:
(1) The interest in the appraisal company owned or controlled
by the person or combination of persons described in subsection
(e) shall not be increased after June 30, 2007.
(2) The interest of a person licensed under this chapter, or of a
person required to be licensed under this chapter, shall not be
transferred to a member of the person's immediate family.
(3) If the commissioner determines that any person or
combination of persons described in subsection (e) has violated
this chapter, the commissioner may order one (1) or more of the
persons to divest their interest in the appraisal company. The
commissioner may exercise the remedy provided by this
subdivision in addition to, or as a substitute for, any other
remedy available to the commissioner under this chapter. As added by P.L.230-2007, SEC.10. Amended by P.L.156-2009,
SEC.7.
IC 23-2-5-10 Violations; investigation by commissioner; orders and notices;
hearing; denial, suspension, or revocation of license; censure;
summary orders; transfer or termination of license; change of
material fact or statement
Sec. 10. (a) Whenever it appears to the commissioner that a
person has engaged in or is about to engage in an act or a practice
constituting a violation of this chapter or a rule or an order under this
chapter, the commissioner may investigate and may issue, with a
prior hearing if there exists no substantial threat of immediate
irreparable harm or without a prior hearing, if there exists a
substantial threat of immediate irreparable harm, orders and notices
as the commissioner determines to be in the public interest, including
cease and desist orders, orders to show cause, and notices. After
notice and hearing, the commissioner may enter an order of
rescission, restitution, or disgorgement, including interest at the rate
of eight percent (8%) per year, directed to a person who has violated
this chapter or a rule or order under this chapter.
(b) Upon the issuance of an order or notice without a prior hearing
by the commissioner under subsection (a), the commissioner shall
promptly notify the respondent and, if the subject of the order or
notice is a mortgage loan originator licensee or a principal manager
licensee, the loan broker licensee for whom the mortgage loan
originator or principal manager is employed:
(1) that the order or notice has been issued;
(2) of the reasons the order or notice has been issued; and
(3) that upon the receipt of a written request the matter will be
set for a hearing to commence not later than fifteen (15)
business days after receipt of the request if the original order
issued by the commissioner was a summary suspension,
summary revocation, or denial of a license and not later than
forty-five (45) business days after receipt of the request for all
other orders unless the respondent consents to a later date.
If a hearing is not requested and not ordered by the commissioner, an
order remains in effect until it is modified or vacated by the
commissioner. If a hearing is requested or ordered, the
commissioner, after notice of an opportunity for hearing, may modify
or vacate the order or extend it until final determination.
(c) The commissioner may deny an application for an initial or a
renewal license, and may suspend or revoke the license of a licensee
if the applicant, the licensee, or an ultimate equitable owner of an
applicant for a loan broker license or of a loan broker licensee:
(1) has, within the most recent ten (10) years:
(A) been the subject of an adjudication or a determination
by:
(i) a court with jurisdiction; or
(ii) an agency or administrator that regulates securities,
commodities, banking, financial services, insurance, real
estate, or the real estate appraisal industry;
in Indiana or in any other jurisdiction; and
(B) been found, after notice and opportunity for hearing, to
have violated the securities, commodities, banking, financial
services, insurance, real estate, or real estate appraisal laws
of Indiana or any other jurisdiction;
(2) except as provided in subsection (d)(1) with respect to the
loan brokerage business, has:
(A) been denied the right to do business in the securities,
commodities, banking, financial services, insurance, real
estate, or real estate appraisal industry; or
(B) had the person's authority to do business in the
securities, commodities, banking, financial services,
insurance, real estate, or real estate appraisal industry
revoked or suspended;
by Indiana or by any other state, federal, or foreign
governmental agency or self regulatory organization;
(3) is insolvent;
(4) has violated any provision of this chapter;
(5) has knowingly filed with the commissioner any document or
statement that:
(A) contains a false representation of a material fact;
(B) fails to state a material fact; or
(C) contains a representation that becomes false after the
filing but during the term of a license as provided in
subsection (j);
(6) has been convicted, within ten (10) years before the date of
the application, renewal, or review, of any crime, other than a
felony, involving fraud or deceit;
(7) if the person is a loan broker licensee or a principal
manager, has failed to reasonably supervise the person's
mortgage loan originators or employees to ensure their
compliance with this chapter;
(8) is on the most recent tax warrant list supplied to the
commissioner by the department of state revenue; or
(9) has engaged in dishonest or unethical practices in the loan
brokerage business, as determined by the commissioner.
(d) The commissioner shall deny an application for an initial or a
renewal license and shall revoke the license of a licensee if the
applicant, the licensee, or an ultimate equitable owner of an applicant
for a loan broker license or of a loan broker licensee:
(1) has had a:
(A) loan broker license issued under this chapter;
(B) mortgage loan originator license issued under this
chapter;
(C) principal manager license issued under this chapter; or
(D) license that is:
(i) equivalent to a license described in clause (A), (B), or
(C); and
(ii) issued by another jurisdiction;
revoked by the commissioner or the appropriate regulatory
agency in another jurisdiction, whichever applies;
(2) has been convicted of or pleaded guilty or nolo contendere
to a felony in a domestic, foreign, or military court:
(A) during the seven (7) year period immediately preceding
the date of the application or review; or
(B) at any time preceding the date of the application or
review if the felony involved an act of fraud or dishonesty,
a breach of trust, or money laundering;
(3) fails to maintain the bond required under section 5(d) of this
chapter;
(4) fails to demonstrate the financial responsibility, character,
and general fitness necessary to:
(A) command the confidence of the community in which the
applicant or licensee engages or will engage in the loan
brokerage business; and
(B) warrant a determination by the commissioner that the
applicant or licensee will operate honestly, fairly, and
efficiently within the purposes of this chapter;
(5) has failed to meet the education requirements set forth in
section 21 of this chapter;
(6) has failed to pass the written examination required by
section 5.5 of this chapter; or
(7) fails to:
(A) keep or maintain records in accordance with section 18
of this chapter; or
(B) allow the commissioner or an agent appointed by the
commissioner to inspect or examine a loan broker licensee's
books and records to determine compliance with section 18
of this chapter.
(e) The commissioner may do either of the following:
(1) Censure:
(A) a licensee;
(B) an officer, a director, or an ultimate equitable owner of
a loan broker licensee; or
(C) any other person;
who violates or causes a violation of this chapter.
(2) Permanently bar any person described in subdivision (1)
from being:
(A) licensed under this chapter; or
(B) employed by or affiliated with a person licensed under
this chapter;
if the person violates or causes a violation of this chapter.
(f) The commissioner may not enter a final order:
(1) denying, suspending, or revoking the license of an applicant
or a licensee; or
(2) imposing other sanctions;
without prior notice to all interested parties, opportunity for a
hearing, and written findings of fact and conclusions of law.
However, the commissioner may by summary order deny, suspend,
or revoke a license pending final determination of any proceeding
under this section or before any proceeding is initiated under this
section. Upon the entry of a summary order, the commissioner shall
promptly notify all interested parties that the summary order has
been entered, of the reasons for the summary order, and that upon
receipt by the commissioner of a written request from a party, the
matter will be set for hearing to commence not later than forty-five
(45) business days after receipt of the request. If no hearing is
requested and none is ordered by the commissioner, the order
remains in effect until it is modified or vacated by the commissioner.
If a hearing is requested or ordered, the commissioner, after notice
of the hearing has been given to all interested persons and the
hearing has been held, may modify or vacate the order or extend it
until final determination.
(g) IC 4-21.5 does not apply to a proceeding under this section.
(h) If a mortgage loan originator licensee or a principal manager
licensee seeks to transfer the licensee's license to another loan broker
licensee who desires to have the mortgage loan originator licensee or
principal manager licensee act as a mortgage loan originator or as a
principal manager, whichever applies, the mortgage loan originator
licensee or principal manager licensee shall, before the mortgage
loan originator licensee or principal manager licensee acts as a
mortgage loan originator or as a principal manager for the new
employer, submit to the commissioner, on a form prescribed by the
commissioner, a license application, as required by section 5 of this
chapter.
(i) If the employment of a mortgage loan originator licensee or
principal manager licensee is terminated, whether:
(1) voluntarily by the mortgage loan originator licensee or
principal manager licensee; or
(2) by the loan broker licensee employing the mortgage loan
originator licensee or principal manager licensee;
the loan broker licensee that employed the mortgage loan originator
licensee or principal manager licensee shall, not later than five (5)
days after the termination, notify the commissioner of the
termination and the reasons for the termination.
(j) If a material fact or statement included in an application under
this chapter changes after the application has been submitted, the
applicant shall provide written notice to the commissioner of the
change. The commissioner may deny, revoke, or refuse to renew a
license applied for or held by any person who:
(1) is required to submit a written notice under this subsection
and fails to provide the required notice within two (2) business
days after the person discovers or should have discovered the
change; or
(2) would not qualify for licensure under this chapter as a result
of the change in a material fact or statement. As added by P.L.235-1985, SEC.1. Amended by P.L.11-1996,
SEC.20; P.L.230-1999, SEC.5; P.L.14-2000, SEC.53; P.L.270-2003,
SEC.3; P.L.48-2006, SEC.7; P.L.230-2007, SEC.11; P.L.145-2008,
SEC.14; P.L.156-2009, SEC.8.
IC 23-2-5-11 Powers and duties of commissioner; use immunity for witnesses;
certificate of compliance or noncompliance; authority to compel
compliance; multistate automated licensing system and repository
Sec. 11. (a) The commissioner may do the following:
(1) Adopt rules under IC 4-22-2 to implement this chapter.
(2) Make investigations and examinations:
(A) in connection with any application for licensure under
this chapter or with any license already granted; or
(B) whenever it appears to the commissioner, upon the basis
of a complaint or information, that reasonable grounds exist
for the belief that an investigation or examination is
necessary or advisable for the more complete protection of
the interests of the public.
(3) Charge as costs of investigation or examination all
reasonable expenses, including a per diem prorated upon the
salary of the commissioner or employee and actual traveling
and hotel expenses. All reasonable expenses are to be paid by
the party or parties under investigation or examination if the
party has violated this chapter.
(4) Issue notices and orders, including cease and desist notices
and orders, after making an investigation or examination under
subdivision (2). The commissioner shall notify the person that
an order or notice has been issued, the reasons for it, and that a
hearing will be set not later than fifteen (15) business days after
the commissioner receives a written request from the person
requesting a hearing if the original order issued by the
commissioner was a summary suspension, summary revocation,
or denial of a license and not later than forty-five (45) business
days after the commissioner receives a written request from the
person requesting a hearing for all other orders.
(5) Sign all orders, official certifications, documents, or papers
issued under this chapter or delegate the authority to sign any
of those items to a deputy.
(6) Hold and conduct hearings.
(7) Hear evidence.
(8) Conduct inquiries with or without hearings.
(9) Receive reports of investigators or other officers or
employees of the state of Indiana or of any municipal
corporation or governmental subdivision within the state.
(10) Administer oaths, or cause them to be administered.
(11) Subpoena witnesses, and compel them to attend and testify.
(12) Compel the production of books, records, and other
documents.
(13) Order depositions to be taken of any witness residing
within or without the state. The depositions shall be taken in the
manner prescribed by law for depositions in civil actions and
made returnable to the commissioner.
(14) Order that each witness appearing under the
commissioner's order to testify before the commissioner shall
receive the fees and mileage allowances provided for witnesses
in civil cases.
(15) Provide interpretive opinions or issue determinations that
the commissioner will not institute a proceeding or an action
under this chapter against a specified person for engaging in a
specified act, practice, or course of business if the
determination is consistent with this chapter. The commissioner
may adopt rules to establish fees for individuals requesting an
interpretive opinion or a determination under this subdivision.
A person may not request an interpretive opinion or a
determination concerning an activity that:
(A) occurred before; or
(B) is occurring on;
the date the opinion or determination is requested.
