IC 24-4.5 ARTICLE 4.5. UNIFORM CONSUMER CREDIT
CODE
IC 24-4.5-1
Chapter 1. General Provisions and Definitions
(Part 1. Short Title, Construction, General Provisions)
IC 24-4.5-1-101 Short title
Sec. 101. Short Title _ This Article shall be known and may be
cited as Uniform Consumer Credit Code. (Formerly: Acts 1971, P.L.366, SEC.2.)
IC 24-4.5-1-102 Purposes; rules of construction; application to disguised consumer
credit transactions; violations of other consumer credit laws,
regulation, or rules; enforcing disclosure requirements for
mortgage transactions
Sec. 102. (1) This article shall be liberally construed and applied
to promote its underlying purposes and policies.
(2) The underlying purposes and policies of this article are:
(a) to simplify, clarify, and modernize the law governing retail
installment sales, consumer credit, small loans, and usury;
(b) to provide rate ceilings to assure an adequate supply of
credit to consumers;
(c) to further consumer understanding of the terms of credit
transactions and to foster competition among suppliers of
consumer credit so that consumers may obtain credit at
reasonable cost;
(d) to protect consumer buyers, lessees, and borrowers against
unfair practices by some suppliers of consumer credit, having
due regard for the interests of legitimate and scrupulous
creditors;
(e) to permit and encourage the development of fair and
economically sound consumer credit practices;
(f) to conform the regulation of consumer credit transactions to
the policies of the Federal Consumer Credit Protection Act; and
(g) to make uniform the law including administrative rules
among the various jurisdictions.
(3) A reference to a requirement imposed by this article includes
reference to a related rule or guidance of the department adopted
pursuant to this article.
(4) A reference to a federal law in IC 24-4.5 is a reference to the
law in effect December 31, 2009.
(5) This article applies to a transaction if the director determines
that the transaction:
(a) is in substance a disguised consumer credit transaction; or
(b) involves the application of subterfuge for the purpose of
avoiding this article.
A determination by the director under this paragraph must be in
writing and shall be delivered to all parties to the transaction.
IC 4-21.5-3 applies to a determination made under this paragraph.
(6) The authority of this article remains in effect, whether a
licensee, an individual, or a person subject to this article acts or
claims to act under any licensing or registration law of this state, or
claims to act without such authority.
(7) A violation of a state or federal law, regulation, or rule
applicable to consumer credit transactions is a violation of this
article.
(8) The department may enforce penalty provisions set forth in 15
U.S.C. 1640 for violations of disclosure requirements applicable to
mortgage transactions. (Formerly: Acts 1971, P.L.366, SEC.2.) As amended by P.L.14-1992,
SEC.2; P.L.122-1994, SEC.1; P.L.45-1995, SEC.2; P.L.176-1996,
SEC.1; P.L.172-1997, SEC.1; P.L.80-1998, SEC.2; P.L.23-2000,
SEC.1; P.L.63-2001, SEC.1 and P.L.134-2001, SEC.1; P.L.82-2002,
SEC.1; P.L.258-2003, SEC.1; P.L.73-2004, SEC.15; P.L.141-2005,
SEC.1; P.L.10-2006, SEC.1 and P.L.57-2006, SEC.1; P.L.213-2007,
SEC.5; P.L.217-2007, SEC.4; P.L.90-2008, SEC.4;
P.L.182-2009(ss), SEC.370; P.L.35-2010, SEC.36.
IC 24-4.5-1-103 Supplementary general principles of law applicable
Sec. 103. Unless displaced by the particular provisions of this
article, the Uniform Commercial Code (IC 26-1) and the principles
of law and equity (including the law relative to capacity to contract,
principal and agent, estoppel, fraud, misrepresentation, duress,
coercion, mistake, bankruptcy, or other validating or invalidating
cause) shall supplement its provisions. (Formerly: Acts 1971, P.L.366, SEC.2.) As amended by
P.L.152-1986, SEC.57.
IC 24-4.5-1-104 Construction against implicit repeal
Sec. 104. Construction Against Implicit Repeal _ This Article
being a general act intended as a unified coverage of its subject
matter, no part of it shall be deemed to be impliedly repealed by
subsequent legislation if such construction can reasonably be
avoided. (Formerly: Acts 1971, P.L.366, SEC.2.)
IC 24-4.5-1-105 Severability
Sec. 105. Severability _ If any provisions of this Article or the
application thereof to any person or circumstances is held invalid, the
invalidity does not affect other provisions or applications of this
Article which can be given effect without the invalid provision or
application, and to this end the provisions of this Article are
severable. (Formerly: Acts 1971, P.L.366, SEC.2.)
IC 24-4.5-1-106 Adjustment of dollar amounts
Sec. 106. (1) The dollar amounts in this article designated as
subject to change shall change, as provided in this section, according
to the Consumer Price Index for Urban Wage Earners and Clerical
Workers: U.S. City Average, All Items, 1957-59 equals 100,
compiled by Bureau of Labor Statistics, United States Department of
Labor, and referred to in this section as the Index. The Index for
October, 1971, is the Reference Base Index.
(2) The dollar amounts shall change on July 1 of each
even-numbered year if the percentage of change, calculated to the
nearest whole percentage point, between the Index at the end of the
preceding year and the Reference Base Index is ten percent (10%) or
more, except that:
(a) the portion of the percentage change in the Index in excess
of a multiple of ten percent (10%) shall be disregarded and the
dollar amounts shall change only in multiples of ten percent
(10%) of the amounts on March 5, 1971;
(b) the dollar amounts shall not change if the amounts required
by this section are those currently in effect pursuant to this
article as a result of earlier application of the section; and
(c) in no event shall the dollar amounts be reduced below the
amounts appearing in this article on March 5, 1971.
(3) If the Index is revised after December 1967, the percentage of
change shall be calculated on the basis of the revised Index. If the
revision of the Index changes the Reference Base Index, a revised
Reference Base Index shall be determined by multiplying the
Reference Base Index by the ratio of the revised Index to the current
Index, as each was for the first month in which the revised Index is
available. If the Index is superseded, the Index is the one represented
by the Bureau of Labor Statistics as reflecting most accurately
changes in the purchasing power of the dollar for consumers.
(4) The department shall issue an emergency rule announcing:
(a) on or before April 30 of each year in which dollar amounts
are to change, the changes in dollar amounts required by
subsection (2); and
(b) promptly after the changes occur, changes in the Index
required by subsection (3), including, when applicable, the
numerical equivalent of the Reference Base Index under a
revised Reference Base Index and the designation or title of any
index superseding the Index.
(5) A person does not violate this article through a transaction
otherwise complying with this article if the person relies on dollar
amounts either determined according to subsection (2) or appearing
in the last rule of the department announcing the then current dollar
amounts. (Formerly: Acts 1971, P.L.366, SEC.2; Acts 1972, P.L.182, SEC.1;
Acts 1972, P.L.182, SEC.2.) As amended by P.L.152-1986, SEC.58;
P.L.3-1990, SEC.84; P.L.14-1992, SEC.3; P.L.1-1994, SEC.117;
P.L.122-1994, SEC.2.
IC 24-4.5-1-107 Waiver; agreement to forego rights; settlement of claims
Sec. 107. Waiver; Agreement to Forego Rights; Settlement of
Claims - (1) Except as otherwise provided in this Article, a buyer,
lessee, or debtor may not waive or agree to forego rights or benefits
under this Article.
(2) A claim by a buyer, lessee, or debtor against a creditor for an
excess charge, other violation of this Article, or civil penalty, or a
claim against a buyer, lessee, or debtor for default or breach of a duty
imposed by this Article, if disputed in good faith, may be settled by
agreement.
(3) A claim, whether or not disputed against a buyer, lessee or
debtor may be settled for less value than the amount claimed.
(4) A settlement in which the buyer, lessee, or debtor waives or
agrees to forego rights or benefits under this Article is invalid if the
court as a matter of law finds the settlement to have been
unconscionable at the time it was made. The competence of the
buyer, lessee, or debtor, any deception or coercion practiced upon
him, the nature and extent of the legal advice received by him, and
the value of the consideration are relevant to the issue of
unconscionability. (Formerly: Acts 1971, P.L.366, SEC.2.)
IC 24-4.5-1-108 Effect on powers of organizations
Sec. 108. (1) This article prescribes maximum charges for all
creditors, except lessors and those excluded (IC 24-4.5-1-202),
extending consumer credit, including consumer credit sales (IC
24-4.5-1-301.5(8)), consumer loans (IC 24-4.5-1-301.5(9)), and
consumer related sales and loans (IC 24-4.5-2-602 and
IC 24-4.5-3-602), and displaces existing limitations on the powers of
those creditors based on maximum charges.
(2) With respect to sellers of goods or services, small loan
companies, licensed lenders, consumer and sales finance companies,
industrial loan and investment companies, and commercial banks and
trust companies, this article displaces existing limitations on their
powers based solely on amount or duration of credit.
(3) Except as provided in subsection (1) and IC 24-4.6-1, this
article does not displace limitations on powers of credit unions,
savings banks, savings or building and loan associations, or other
thrift institutions whether organized for the profit of shareholders or
as mutual organizations.
(4) Except as provided in subsections (1) and (2), this article does
not displace:
(a) limitations on powers of depository institutions (IC
24-4.5-1-301.5) with respect to the amount of a loan to a single
borrower, the ratio of a loan to the value of collateral, the
duration of a loan that is a mortgage transaction, or other
similar restrictions designed to protect deposits; or
(b) limitations on powers an organization is authorized to
exercise under the laws of this state or the United States. (Formerly: Acts 1971, P.L.366, SEC.2; Acts 1974, P.L.115, SEC.3.)
As amended by P.L.14-1992, SEC.4; P.L.122-1994, SEC.3;
P.L.35-2010, SEC.37.
IC 24-4.5-1-109 Persons licensed or authorized on October 1, 1971
Sec. 109. All persons licensed on October 1, 1971, under:
(1) IC 24-5-4 (before its repeal on October 1, 1971);
(2) IC 28-7-4 (before its repeal on October 1, 1971);
(3) IC 28-7-2 (before its repeal on October 1, 1971); or
(4) IC 28-5-1-4;
are licensed to make supervised loans under this article, subject to
the renewal provisions contained in this article. All provisions of this
article apply to the persons previously licensed or authorized. The
department may deliver evidence of licensing to the persons
previously licensed or authorized. As added by P.L.5-1988, SEC.128. Amended by P.L.3-1990, SEC.85;
P.L.14-1992, SEC.5; P.L.35-2010, SEC.38.
IC 24-4.5-1-201 Territorial application; activities in other states by industrial loan
and investment companies
Sec. 201. (1) Except as otherwise provided in this section, this
article applies to sales, leases, and loans made in this state and to
modifications, including refinancings, consolidations, and deferrals,
made in this state, of sales, leases, and loans, wherever made. For
purposes of this article, the following apply:
(a) A sale or modification of a sale agreement is made in this
state if the buyer's agreement or offer to purchase or to modify
is received by the seller or a person acting on behalf of the
seller in this state.
(b) A lease or modification of a lease agreement is made in this
state if the lessee's agreement or offer to lease or to modify is
received by the lessor or a person acting on behalf of the lessor
in this state.
(c) A loan or modification of a loan agreement is made in this
state if a writing signed by the debtor and evidencing the debt
is received by the lender or a person acting on behalf of the
lender in this state.
(d) Except as provided in subdivision (e), a sale, lease, or loan
transaction occurs in Indiana if a consumer who is a resident of
Indiana enters into a consumer sale, lease, or loan transaction
with a creditor or a person acting on behalf of the creditor in
another state and the creditor or the person acting on behalf of
the creditor has advertised or solicited sales, leases, or loans in
Indiana by any means, including by mail, brochure, telephone,
print, radio, television, the Internet, or electronic means.
However, during the period beginning July 1, 2007, and ending
June 30, 2009, this subdivision does not apply to an affiliate or
a subsidiary of a financial corporation issued a certificate of
authority to operate as an industrial loan and investment
company under IC 28-5 if all of the following apply:
(i) The industrial loan and investment company notifies the
department in writing that an affiliate or a subsidiary of the
industrial loan and investment company engages or plans to
engage in activity involving Indiana residents at an out of
state location. The notification required by this clause must
list all states other than Indiana in which consumer loans
may be made and must describe the nature of the proposed
transactions.
(ii) The industrial loan and investment company provides
written consent allowing the department to consult with and
review information provided by other state regulators, as
may be requested by the department, concerning the
activities identified in clause (i) of any affiliate or subsidiary
engaging in consumer lending to Indiana residents in the
states identified under clause (i).
(iii) The industrial loan and investment company provides
written consent allowing the department to inspect or
examine all out of state locations in which an affiliate or a
subsidiary of the industrial loan and investment company
engages in the activities identified under clause (i) for the
purpose of investigating the affiliate's or subsidiary's
consumer lending practices involving Indiana residents. An
inspection or examination performed by the department
under this clause is subject to the schedule of fees
established by the department under IC 28-11-3-5.
(e) A sale, lease, or loan transaction does not occur in Indiana
if a consumer who is a resident of Indiana enters into a
consumer sale, lease, or loan transaction secured by an interest
in land located outside Indiana.
For purposes of subdivisions (a) through (c), an offer is received by
a creditor or a person acting on behalf of the creditor in Indiana if the
offer is physically delivered, or otherwise transmitted or
communicated, to a person who has actual or apparent authority to
act for the creditor or the person acting on behalf of the creditor in
Indiana, regardless of whether approval, acceptance, or ratification
by any other agent or representative of the creditor or the person
acting on behalf of the creditor in another state is necessary to give
legal consequence to the consumer credit transaction.
(2) IC 24-4.5-5-101 through IC 24-4.5-5-108 apply to actions or
other proceedings brought in this state to enforce rights arising from
consumer credit sales, consumer leases, or consumer loans, or
extortionate extensions of credit, wherever made.
(3) Except as provided in subsection (2), a sale, lease, loan, or
modification thereof, made in another state to a person who was not
a resident of this state when the sale, lease, loan, or modification was
made is valid and enforceable in this state according to its terms to
the extent that it is valid and enforceable under the laws of the state
applicable to the transaction.
(4) For the purposes of this article, the residence of a buyer,
lessee, or debtor is the address given by the buyer, lessee, or debtor
as the buyer's, lessee's, or debtor's residence in any writing or
electronic communication made by the buyer, lessee, or debtor in
connection with a credit transaction. Until the buyer, lessee, or
debtor notifies the creditor or the person acting on behalf of the
creditor of a new or different address, the given address is presumed
to be unchanged.
(5) Notwithstanding other provisions of this section:
(a) except as provided in subsection (2), this article does not
apply if the buyer, lessee, or debtor is not a resident of this state
at the time of a credit transaction and the parties then agree that
the law of the buyer's, lessee's, or debtor's residence applies;
and
(b) this article applies if the buyer, lessee, or debtor is a resident
of this state at the time of a credit transaction and the parties
then agree that the law of this state applies.
(6) Except as provided in subsection (5), the following agreements
by a buyer, lessee, or debtor are invalid with respect to consumer
credit sales, consumer leases, consumer loans, or modifications
thereof, to which this article applies:
(a) that the law of another state shall apply;
(b) that the buyer, lessee, or debtor consents to the jurisdiction
of another state; and
(c) that fixes venue.
(7) The following provisions of this article specify the applicable
law governing certain cases:
(a) applicability (IC 24-4.5-6-102) of the provisions on powers
and functions of the department; and
(b) applicability (IC 24-4.5-6-201) of the provisions on
notification and fees.
(8) If a creditor or a person acting on behalf of the creditor has
violated the provisions of this article that apply to the authority to
make consumer loans (IC 24-4.5-3-502), the loan is void and the
debtor is not obligated to pay either the principal or loan finance
charge, as set forth in IC 24-4.5-5-202. (Formerly: Acts 1971, P.L.366, SEC.2.) As amended by Acts 1979,
P.L.236, SEC.1; P.L.152-1986, SEC.59; P.L.252-1987, SEC.5;
P.L.14-1992, SEC.6; P.L.122-1994, SEC.4; P.L.10-2006, SEC.2 and
P.L.57-2006, SEC.2; P.L.213-2007, SEC.6; P.L.217-2007, SEC.5;
P.L.90-2008, SEC.5.
IC 24-4.5-1-202 Exclusions
Sec. 202. This article does not apply to the following:
(1) Extensions of credit to government or governmental
agencies or instrumentalities.
(2) The sale of insurance by an insurer, except as otherwise
provided in the chapter on insurance (IC 24-4.5-4).
(3) Transactions under public utility, municipal utility, or
common carrier tariffs if a subdivision or agency of this state or
of the United States regulates the charges for the services
involved, the charges for delayed payment, and any discount
allowed for early payment.
(4) The rates and charges and the disclosure of rates and
charges of a licensed pawnbroker established in accordance
with a statute or ordinance concerning these matters.
(5) A sale of goods, services, or an interest in land in which the
goods, services, or interest in land are purchased primarily for
a purpose other than a personal, family, or household purpose.
(6) A loan in which the debt is incurred primarily for a purpose
other than a personal, family, or household purpose.
(7) An extension of credit primarily for a business, a
commercial, or an agricultural purpose.
(8) An installment agreement for the purchase of home fuels in
which a finance charge is not imposed.
(9) Loans made, insured, or guaranteed under a program
authorized by Title IV of the Higher Education Act of 1965 (20
U.S.C. 1070 et seq.).
(10) Transactions in securities or commodities accounts in
which credit is extended by a broker-dealer registered with the
Securities and Exchange Commission or the Commodity
Futures Trading Commission.
(11) Except for IC 24-4.5-3-502.1(2), IC 24-4.5-3-503.3,
IC 24-4.5-3-505(4), and IC 24-4.5-3-505(5), a loan made:
(A) in compliance with the requirements of; and
(B) by a community development corporation (as defined in
IC 4-4-28-2) acting as a subrecipient of funds from;
the Indiana housing and community development authority
established by IC 5-20-1-3.
(12) Except for IC 24-4.5-3-502.1(2), IC 24-4.5-3-503.3,
IC 24-4.5-3-505(4), and IC 24-4.5-3-505(5), a subordinate lien
mortgage transaction made by an entity that exclusively uses
funds provided by the United States Department of Housing and
Urban Development under Title 1 of the Housing and
Community Development Act of 1974, Public Law 93-383, as
amended (42 U.S.C. 5301 et seq). (Formerly: Acts 1971, P.L.366, SEC.2.) As amended by Acts 1981,
P.L.217, SEC.1; Acts 1982, P.L.149, SEC.1; P.L.247-1983, SEC.1;
P.L.14-1992, SEC.7; P.L.176-1996, SEC.2; P.L.73-2004, SEC.16;
P.L.1-2006, SEC.410 and P.L.181-2006, SEC.57; P.L.35-2010,
SEC.39.
IC 24-4.5-1-203
Repealed
(Repealed by P.L.35-2010, SEC.209.)
IC 24-4.5-1-204 Regulation of individuals also conducting loan brokerage business;
department's cooperation with securities commissioner
Sec. 204. In examinations or other regulatory activities conducted
by the department and related to licensees under this article, the
department may cooperate with the Indiana securities commissioner
in the regulation of individuals who, in addition to conducting
business regulated under this article, also conduct a loan broker
business subject to IC 23-2-5. As added by P.L.35-2010, SEC.40.
(Part 3. Definitions)
IC 24-4.5-1-301
Repealed
(Repealed by P.L.35-2010, SEC.209.)
IC 24-4.5-1-301.5 Definitions
Sec. 301.5. In addition to definitions appearing in subsequent
chapters in this article, the following definitions apply throughout
this article:
(1) "Affiliate", with respect to any person subject to this article,
means a person that, directly or indirectly, through one (1) or more
intermediaries:
(a) controls;
(b) is controlled by; or
(c) is under common control with;
the person subject to this article.
(2) "Agreement" means the bargain of the parties in fact as found
in their language or by implication from other circumstances,
including course of dealing or usage of trade or course of
performance.
(3) "Agricultural purpose" means a purpose related to the
production, harvest, exhibition, marketing, transportation,
processing, or manufacture of agricultural products by a natural
person who cultivates, plants, propagates, or nurtures the agricultural
products. "Agricultural products" includes agricultural, horticultural,
viticultural, and dairy products, livestock, wildlife, poultry, bees,
forest products, fish and shellfish, and any and all products raised or
produced on farms and any processed or manufactured products
thereof.
(4) "Average daily balance" means the sum of each of the daily
balances in a billing cycle divided by the number of days in the
billing cycle, and if the billing cycle is a month, the creditor may
elect to treat the number of days in each billing cycle as thirty (30).
(5) "Closing costs" with respect to a subordinate lien mortgage
transaction includes:
(a) fees or premiums for title examination, title insurance, or
similar purposes, including surveys;
(b) fees for preparation of a deed, settlement statement, or other
documents;
(c) escrows for future payments of taxes and insurance;
(d) fees for notarizing deeds and other documents;
(e) appraisal fees; and
(f) fees for credit reports.
(6) "Conspicuous" refers to a term or clause when it is so written
that a reasonable person against whom it is to operate ought to have
noticed it.
(7) "Consumer credit" means credit offered or extended to a
consumer primarily for a personal, family, or household purpose.
(8) "Consumer credit sale" is a sale of goods, services, or an
interest in land in which:
(a) credit is granted by a person who regularly engages as a
seller in credit transactions of the same kind;
(b) the buyer is a person other than an organization;
(c) the goods, services, or interest in land are purchased
primarily for a personal, family, or household purpose;
(d) either the debt is payable in installments or a finance charge
is made; and
(e) with respect to a sale of goods or services, either the amount
financed does not exceed fifty thousand dollars ($50,000) or the
debt is secured by personal property used or expected to be used
as the principal dwelling of the buyer.
Unless the sale is made subject to this article by agreement (IC
24-4.5-2-601), "consumer credit sale" does not include a sale in
which the seller allows the buyer to purchase goods or services
pursuant to a lender credit card or similar arrangement or except as
provided with respect to disclosure (IC 24-4.5-2-301), debtors'
remedies (IC 24-4.5-5-201), providing payoff amounts (IC
24-4.5-2-209), and powers and functions of the department (IC
24-4.5-6-101), a sale of an interest in land which is a first lien
mortgage transaction.
(9) "Consumer loan" means a loan made by a person regularly
engaged in the business of making loans in which:
(a) the debtor is a person other than an organization;
(b) the debt is primarily for a personal, family, or household
purpose;
(c) either the debt is payable in installments or a loan finance
charge is made; and
(d) either:
(i) the principal does not exceed fifty thousand dollars
($50,000); or
(ii) the debt is secured by an interest in land or by personal
property used or expected to be used as the principal
dwelling of the debtor.
Except as described in IC 24-4.5-3-105 of this chapter, the term does
not include a first lien mortgage transaction.
(10) "Credit" means the right granted by a creditor to a debtor to
defer payment of debt or to incur debt and defer its payment.
(11) "Creditor" means a person:
(a) who regularly engages in the extension of consumer credit
that is subject to a credit service charge or loan finance charge,
as applicable, or is payable by written agreement in more than
four (4) installments (not including a down payment); and
(b) to whom the obligation is initially payable, either on the
face of the note or contract, or by agreement when there is not
a note or contract.
(12) "Depository institution" has the meaning set forth in the
federal Federal Deposit Insurance Act (12 U.S.C. 1813(c)) and
includes any credit union.
(13) "Director" means the director of the department of financial
institutions or the director's designee.
(14) "Dwelling" means a residential structure that contains one (1)
to four (4) units, regardless of whether the structure is attached to
real property. The term includes an individual:
(a) condominium unit;
(b) cooperative unit;
(c) mobile home; or
(d) trailer;
that is used as a residence.
(15) "Earnings" means compensation paid or payable for personal
services, whether denominated as wages, salary, commission, bonus,
or otherwise, and includes periodic payments under a pension or
retirement program.
(16) "Employee" means an individual who is paid wages or other
compensation by an employer required under federal income tax law
to file Form W-2 on behalf of the individual.
(17) "Federal banking agencies" means the Board of Governors
of the Federal Reserve System, the Comptroller of the Currency, the
Office of Thrift Supervision, the National Credit Union
Administration, and the Federal Deposit Insurance Corporation.
(18) "First lien mortgage transaction" means:
(a) a loan; or
(b) a consumer credit sale;
that is or will be used by the debtor primarily for personal, family, or
household purposes and that is secured by a mortgage, a land
contract, or another equivalent consensual security interest that
constitutes a first lien on a dwelling or residential real estate.
(19) "Immediate family member" means a spouse, child, sibling,
parent, grandparent, or grandchild. The term includes stepparents,
stepchildren, stepsiblings, and adoptive relationships.
(20) "Individual" means a natural person.
(21) "Lender credit card or similar arrangement" means an
arrangement or loan agreement, other than a seller credit card,
pursuant to which a lender gives a debtor the privilege of using a
credit card, letter of credit, or other credit confirmation or
identification in transactions out of which debt arises:
(a) by the lender's honoring a draft or similar order for the
payment of money drawn or accepted by the debtor;
(b) by the lender's payment or agreement to pay the debtor's
obligations; or
(c) by the lender's purchase from the obligee of the debtor's
obligations.
(22) "Licensee" means a person licensed as a creditor under this
article.
(23) "Loan brokerage business" means any activity in which a
person, in return for any consideration from any source, procures,
attempts to procure, or assists in procuring, a mortgage transaction
from a third party or any other person, whether or not the person
seeking the mortgage transaction actually obtains the mortgage
transaction.
(24) "Loan processor or underwriter" means an individual who
performs clerical or support duties as an employee at the direction of,
and subject to the supervision and instruction of, a person licensed
or exempt from licensing under this article. For purposes of this
subsection, the term "clerical or support duties" may include, after
the receipt of an application, the following:
(a) The receipt, collection, distribution, and analysis of
information common for the processing or underwriting of a
mortgage transaction.
(b) The communication with a consumer to obtain the
information necessary for the processing or underwriting of a
loan, to the extent that the communication does not include:
(i) offering or negotiating loan rates or terms; or
(ii) counseling consumers about mortgage transaction rates
or terms.
An individual engaging solely in loan processor or underwriter
activities, shall not represent to the public through advertising or
other means of communicating or providing information, including
the use of business cards, stationery, brochures, signs, rate lists, or
other promotional items, that the individual can or will perform any
of the activities of a mortgage loan originator.
(25) "Mortgage loan originator" means an individual who, for
compensation or gain, or in the expectation of compensation or gain,
engages in taking a mortgage transaction application or in offering
or negotiating the terms of a mortgage transaction that either is made
under this article or under IC 24-4.5 or is made by an employee of a
person licensed or exempt from licensing under this article or under
IC 24-4.5, while the employee is engaging in the loan brokerage
business. The term does not include the following:
(a) An individual engaged solely as a loan processor or
underwriter as long as the individual works exclusively as an
employee of a person licensed or exempt from licensing under
this article.
(b) Unless the person or entity is compensated by:
(i) a creditor;
(ii) a loan broker;
(iii) other mortgage loan originator; or
(iv) any agent of the creditor, loan broker, or other mortgage
loan originator described in items (i) through (iii);
a person or entity that only performs real estate brokerage
activities and is licensed or registered in accordance with
applicable state law.
(c) A person solely involved in extensions of credit relating to
timeshare plans (as defined in 11 U.S.C. 101(53D)).
(26) "Mortgage servicer" means the last person to whom a
mortgagor or the mortgagor's successor in interest has been
instructed by a mortgagee to send payments on a loan secured by a
mortgage.
(27) "Mortgage transaction" means:
(a) a loan; or
(b) a consumer credit sale;
that is or will be used by the debtor primarily for personal, family, or
household purposes and that is secured by a mortgage, a land
contract, or another equivalent consensual security interest on a
dwelling or residential real estate.
(28) "Nationwide Mortgage Licensing System and Registry" or
"NMLSR" means a mortgage licensing system developed and
maintained by the Conference of State Bank Supervisors and the
American Association of Residential Mortgage Regulators for the
licensing and registration of creditors and mortgage loan originators.
(29) "Nontraditional mortgage product" means any mortgage
product other than a thirty (30) year fixed rate mortgage.
(30) "Official fees" means:
(a) fees and charges prescribed by law which actually are or
will be paid to public officials for determining the existence of
or for perfecting, releasing, or satisfying a security interest
related to a consumer credit sale, consumer lease, or consumer
loan; or
(b) premiums payable for insurance in lieu of perfecting a
security interest otherwise required by the creditor in
connection with the sale, lease, or loan, if the premium does not
exceed the fees and charges described in paragraph (a) that
would otherwise be payable.
(31) "Organization" means a corporation, a government or
governmental subdivision, an agency, a trust, an estate, a partnership,
a limited liability company, a cooperative, an association, a joint
venture, an unincorporated organization, or any other entity, however
organized.
(32) "Payable in installments" means that payment is required or
permitted by written agreement to be made in more than four (4)
installments not including a down payment.
(33) "Person" includes an individual or an organization.
(34) "Person related to" with respect to an individual means:
(a) the spouse of the individual;
(b) a brother, brother-in-law, sister, or sister-in-law of the
individual;
(c) an ancestor or lineal descendants of the individual or the
individual's spouse; and
(d) any other relative, by blood or marriage, of the individual or
the individual's spouse who shares the same home with the
individual.
(35) "Person related to" with respect to an organization means:
(a) a person directly or indirectly controlling, controlled by, or
under common control with the organization;
(b) a director, an executive officer, or a manager of the
organization or a person performing similar functions with
respect to the organization or to a person related to the
organization;
(c) the spouse of a person related to the organization; and
(d) a relative by blood or marriage of a person related to the
organization who shares the same home with the person.
(36) "Presumed" or "presumption" means that the trier of fact
must find the existence of the fact presumed, unless and until
evidence is introduced that would support a finding of its
nonexistence.
(37) "Real estate brokerage activity" means any activity that
involves offering or providing real estate brokerage services to the
public, including the following:
(a) Acting as a real estate agent or real estate broker for a buyer,
seller, lessor, or lessee of real property.
(b) Bringing together parties interested in the sale, purchase,
lease, rental, or exchange of real property.
(c) Negotiating, on behalf of any party, any part of a contract
relating to the sale, purchase, lease, rental, or exchange of real
property (other than in connection with providing financing
with respect to the sale, purchase, lease, rental, or exchange of
real property).
(d) Engaging in any activity for which a person is required to be
registered or licensed as a real estate agent or real estate broker
under any applicable law.
(e) Offering to engage in any activity, or act in any capacity,
described in this subsection.
(38) "Registered mortgage loan originator" means any individual
who:
(a) meets the definition of mortgage loan originator and is an
employee of:
(i) a depository institution;
(ii) a subsidiary that is owned and controlled by a depository
institution and regulated by a federal banking agency; or
(iii) an institution regulated by the Farm Credit
Administration; and
(b) is registered with, and maintains a unique identifier through,
the NMLSR.
(39) "Regularly engaged" means a person who extends consumer
credit:
(a) more than twenty-five (25) times; or
(b) at least one (1) time for a mortgage transaction secured by
a dwelling;
in the preceding calendar year. If a person did not meet these
numerical standards in the preceding calendar year, the numerical
standards shall be applied to the current calendar year.
(40) "Residential real estate" means any real property that is
located in Indiana and on which there is located or intended to be
constructed a dwelling.
(41) "Seller credit card" means an arrangement that gives to a
buyer or lessee the privilege of using a credit card, letter of credit, or
other credit confirmation or identification for the purpose of
purchasing or leasing goods or services from that person, a person
related to that person, or from that person and any other person. The
term includes a card that is issued by a person, that is in the name of
the seller, and that can be used by the buyer or lessee only for
purchases or leases at locations of the named seller.
(42) "Subordinate lien mortgage transaction" means:
(a) a loan; or
(b) a consumer credit sale;
that is or will be used by the debtor primarily for personal, family, or
household purposes and that is secured by a mortgage, a land
contract, or another equivalent consensual security interest that
constitutes a subordinate lien on a dwelling or residential real estate.
(43) "Unique identifier" means a number or other identifier
assigned by protocols established by the NMLSR. As added by P.L.35-2010, SEC.41.
IC 24-4.5-1-302 Federal Consumer Credit Protection Act
Sec. 302. Federal Consumer Credit Protection Act _ In this
Article "Federal Consumer Credit Protection Act" means the
Consumer Credit Protection Act (Public Law 90-321; 82 Stat. 146),
as amended, and includes both the Truth in Lending Simplification
and Reform Act amendments (Public Law 96-221, Title VI, 94 Stat.
168) and any regulations issued pursuant to those laws. However, the
department may otherwise define this term by rule issued in
accordance with IC 24-4.5-6-107. (Formerly: Acts 1971, P.L.366, SEC.2.) As amended by Acts 1982,
P.L.149, SEC.2; P.L.14-1992, SEC.10.
IC 24-4.5-1-303
Repealed
(Repealed by P.L.35-2010, SEC.209.)
IC 24-4.5 ARTICLE 4.5. UNIFORM CONSUMER CREDIT
CODE
IC 24-4.5-1
Chapter 1. General Provisions and Definitions
(Part 1. Short Title, Construction, General Provisions)
IC 24-4.5-1-101 Short title
Sec. 101. Short Title _ This Article shall be known and may be
cited as Uniform Consumer Credit Code. (Formerly: Acts 1971, P.L.366, SEC.2.)
IC 24-4.5-1-102 Purposes; rules of construction; application to disguised consumer
credit transactions; violations of other consumer credit laws,
regulation, or rules; enforcing disclosure requirements for
mortgage transactions
Sec. 102. (1) This article shall be liberally construed and applied
to promote its underlying purposes and policies.
(2) The underlying purposes and policies of this article are:
(a) to simplify, clarify, and modernize the law governing retail
installment sales, consumer credit, small loans, and usury;
(b) to provide rate ceilings to assure an adequate supply of
credit to consumers;
(c) to further consumer understanding of the terms of credit
transactions and to foster competition among suppliers of
consumer credit so that consumers may obtain credit at
reasonable cost;
(d) to protect consumer buyers, lessees, and borrowers against
unfair practices by some suppliers of consumer credit, having
due regard for the interests of legitimate and scrupulous
creditors;
(e) to permit and encourage the development of fair and
economically sound consumer credit practices;
(f) to conform the regulation of consumer credit transactions to
the policies of the Federal Consumer Credit Protection Act; and
(g) to make uniform the law including administrative rules
among the various jurisdictions.
(3) A reference to a requirement imposed by this article includes
reference to a related rule or guidance of the department adopted
pursuant to this article.
(4) A reference to a federal law in IC 24-4.5 is a reference to the
law in effect December 31, 2009.
(5) This article applies to a transaction if the director determines
that the transaction:
(a) is in substance a disguised consumer credit transaction; or
(b) involves the application of subterfuge for the purpose of
avoiding this article.
A determination by the director under this paragraph must be in
writing and shall be delivered to all parties to the transaction.
IC 4-21.5-3 applies to a determination made under this paragraph.
(6) The authority of this article remains in effect, whether a
licensee, an individual, or a person subject to this article acts or
claims to act under any licensing or registration law of this state, or
claims to act without such authority.
(7) A violation of a state or federal law, regulation, or rule
applicable to consumer credit transactions is a violation of this
article.
(8) The department may enforce penalty provisions set forth in 15
U.S.C. 1640 for violations of disclosure requirements applicable to
mortgage transactions. (Formerly: Acts 1971, P.L.366, SEC.2.) As amended by P.L.14-1992,
SEC.2; P.L.122-1994, SEC.1; P.L.45-1995, SEC.2; P.L.176-1996,
SEC.1; P.L.172-1997, SEC.1; P.L.80-1998, SEC.2; P.L.23-2000,
SEC.1; P.L.63-2001, SEC.1 and P.L.134-2001, SEC.1; P.L.82-2002,
SEC.1; P.L.258-2003, SEC.1; P.L.73-2004, SEC.15; P.L.141-2005,
SEC.1; P.L.10-2006, SEC.1 and P.L.57-2006, SEC.1; P.L.213-2007,
SEC.5; P.L.217-2007, SEC.4; P.L.90-2008, SEC.4;
P.L.182-2009(ss), SEC.370; P.L.35-2010, SEC.36.
IC 24-4.5-1-103 Supplementary general principles of law applicable
Sec. 103. Unless displaced by the particular provisions of this
article, the Uniform Commercial Code (IC 26-1) and the principles
of law and equity (including the law relative to capacity to contract,
principal and agent, estoppel, fraud, misrepresentation, duress,
coercion, mistake, bankruptcy, or other validating or invalidating
cause) shall supplement its provisions. (Formerly: Acts 1971, P.L.366, SEC.2.) As amended by
P.L.152-1986, SEC.57.
IC 24-4.5-1-104 Construction against implicit repeal
Sec. 104. Construction Against Implicit Repeal _ This Article
being a general act intended as a unified coverage of its subject
matter, no part of it shall be deemed to be impliedly repealed by
subsequent legislation if such construction can reasonably be
avoided. (Formerly: Acts 1971, P.L.366, SEC.2.)
IC 24-4.5-1-105 Severability
Sec. 105. Severability _ If any provisions of this Article or the
application thereof to any person or circumstances is held invalid, the
invalidity does not affect other provisions or applications of this
Article which can be given effect without the invalid provision or
application, and to this end the provisions of this Article are
severable. (Formerly: Acts 1971, P.L.366, SEC.2.)
IC 24-4.5-1-106 Adjustment of dollar amounts
Sec. 106. (1) The dollar amounts in this article designated as
subject to change shall change, as provided in this section, according
to the Consumer Price Index for Urban Wage Earners and Clerical
Workers: U.S. City Average, All Items, 1957-59 equals 100,
compiled by Bureau of Labor Statistics, United States Department of
Labor, and referred to in this section as the Index. The Index for
October, 1971, is the Reference Base Index.
(2) The dollar amounts shall change on July 1 of each
even-numbered year if the percentage of change, calculated to the
nearest whole percentage point, between the Index at the end of the
preceding year and the Reference Base Index is ten percent (10%) or
more, except that:
(a) the portion of the percentage change in the Index in excess
of a multiple of ten percent (10%) shall be disregarded and the
dollar amounts shall change only in multiples of ten percent
(10%) of the amounts on March 5, 1971;
(b) the dollar amounts shall not change if the amounts required
by this section are those currently in effect pursuant to this
article as a result of earlier application of the section; and
(c) in no event shall the dollar amounts be reduced below the
amounts appearing in this article on March 5, 1971.
(3) If the Index is revised after December 1967, the percentage of
change shall be calculated on the basis of the revised Index. If the
revision of the Index changes the Reference Base Index, a revised
Reference Base Index shall be determined by multiplying the
Reference Base Index by the ratio of the revised Index to the current
Index, as each was for the first month in which the revised Index is
available. If the Index is superseded, the Index is the one represented
by the Bureau of Labor Statistics as reflecting most accurately
changes in the purchasing power of the dollar for consumers.
(4) The department shall issue an emergency rule announcing:
(a) on or before April 30 of each year in which dollar amounts
are to change, the changes in dollar amounts required by
subsection (2); and
(b) promptly after the changes occur, changes in the Index
required by subsection (3), including, when applicable, the
numerical equivalent of the Reference Base Index under a
revised Reference Base Index and the designation or title of any
index superseding the Index.
(5) A person does not violate this article through a transaction
otherwise complying with this article if the person relies on dollar
amounts either determined according to subsection (2) or appearing
in the last rule of the department announcing the then current dollar
amounts. (Formerly: Acts 1971, P.L.366, SEC.2; Acts 1972, P.L.182, SEC.1;
Acts 1972, P.L.182, SEC.2.) As amended by P.L.152-1986, SEC.58;
P.L.3-1990, SEC.84; P.L.14-1992, SEC.3; P.L.1-1994, SEC.117;
P.L.122-1994, SEC.2.
IC 24-4.5-1-107 Waiver; agreement to forego rights; settlement of claims
Sec. 107. Waiver; Agreement to Forego Rights; Settlement of
Claims - (1) Except as otherwise provided in this Article, a buyer,
lessee, or debtor may not waive or agree to forego rights or benefits
under this Article.
(2) A claim by a buyer, lessee, or debtor against a creditor for an
excess charge, other violation of this Article, or civil penalty, or a
claim against a buyer, lessee, or debtor for default or breach of a duty
imposed by this Article, if disputed in good faith, may be settled by
agreement.
(3) A claim, whether or not disputed against a buyer, lessee or
debtor may be settled for less value than the amount claimed.
(4) A settlement in which the buyer, lessee, or debtor waives or
agrees to forego rights or benefits under this Article is invalid if the
court as a matter of law finds the settlement to have been
unconscionable at the time it was made. The competence of the
buyer, lessee, or debtor, any deception or coercion practiced upon
him, the nature and extent of the legal advice received by him, and
the value of the consideration are relevant to the issue of
unconscionability. (Formerly: Acts 1971, P.L.366, SEC.2.)
IC 24-4.5-1-108 Effect on powers of organizations
Sec. 108. (1) This article prescribes maximum charges for all
creditors, except lessors and those excluded (IC 24-4.5-1-202),
extending consumer credit, including consumer credit sales (IC
24-4.5-1-301.5(8)), consumer loans (IC 24-4.5-1-301.5(9)), and
consumer related sales and loans (IC 24-4.5-2-602 and
IC 24-4.5-3-602), and displaces existing limitations on the powers of
those creditors based on maximum charges.
(2) With respect to sellers of goods or services, small loan
companies, licensed lenders, consumer and sales finance companies,
industrial loan and investment companies, and commercial banks and
trust companies, this article displaces existing limitations on their
powers based solely on amount or duration of credit.
(3) Except as provided in subsection (1) and IC 24-4.6-1, this
article does not displace limitations on powers of credit unions,
savings banks, savings or building and loan associations, or other
thrift institutions whether organized for the profit of shareholders or
as mutual organizations.
(4) Except as provided in subsections (1) and (2), this article does
not displace:
(a) limitations on powers of depository institutions (IC
24-4.5-1-301.5) with respect to the amount of a loan to a single
borrower, the ratio of a loan to the value of collateral, the
duration of a loan that is a mortgage transaction, or other
similar restrictions designed to protect deposits; or
(b) limitations on powers an organization is authorized to
exercise under the laws of this state or the United States. (Formerly: Acts 1971, P.L.366, SEC.2; Acts 1974, P.L.115, SEC.3.)
As amended by P.L.14-1992, SEC.4; P.L.122-1994, SEC.3;
P.L.35-2010, SEC.37.
IC 24-4.5-1-109 Persons licensed or authorized on October 1, 1971
Sec. 109. All persons licensed on October 1, 1971, under:
(1) IC 24-5-4 (before its repeal on October 1, 1971);
(2) IC 28-7-4 (before its repeal on October 1, 1971);
(3) IC 28-7-2 (before its repeal on October 1, 1971); or
(4) IC 28-5-1-4;
are licensed to make supervised loans under this article, subject to
the renewal provisions contained in this article. All provisions of this
article apply to the persons previously licensed or authorized. The
department may deliver evidence of licensing to the persons
previously licensed or authorized. As added by P.L.5-1988, SEC.128. Amended by P.L.3-1990, SEC.85;
P.L.14-1992, SEC.5; P.L.35-2010, SEC.38.
IC 24-4.5-1-201 Territorial application; activities in other states by industrial loan
and investment companies
Sec. 201. (1) Except as otherwise provided in this section, this
article applies to sales, leases, and loans made in this state and to
modifications, including refinancings, consolidations, and deferrals,
made in this state, of sales, leases, and loans, wherever made. For
purposes of this article, the following apply:
(a) A sale or modification of a sale agreement is made in this
state if the buyer's agreement or offer to purchase or to modify
is received by the seller or a person acting on behalf of the
seller in this state.
(b) A lease or modification of a lease agreement is made in this
state if the lessee's agreement or offer to lease or to modify is
received by the lessor or a person acting on behalf of the lessor
in this state.
(c) A loan or modification of a loan agreement is made in this
state if a writing signed by the debtor and evidencing the debt
is received by the lender or a person acting on behalf of the
lender in this state.
(d) Except as provided in subdivision (e), a sale, lease, or loan
transaction occurs in Indiana if a consumer who is a resident of
Indiana enters into a consumer sale, lease, or loan transaction
with a creditor or a person acting on behalf of the creditor in
another state and the creditor or the person acting on behalf of
the creditor has advertised or solicited sales, leases, or loans in
Indiana by any means, including by mail, brochure, telephone,
print, radio, television, the Internet, or electronic means.
However, during the period beginning July 1, 2007, and ending
June 30, 2009, this subdivision does not apply to an affiliate or
a subsidiary of a financial corporation issued a certificate of
authority to operate as an industrial loan and investment
company under IC 28-5 if all of the following apply:
(i) The industrial loan and investment company notifies the
department in writing that an affiliate or a subsidiary of the
industrial loan and investment company engages or plans to
engage in activity involving Indiana residents at an out of
state location. The notification required by this clause must
list all states other than Indiana in which consumer loans
may be made and must describe the nature of the proposed
transactions.
(ii) The industrial loan and investment company provides
written consent allowing the department to consult with and
review information provided by other state regulators, as
may be requested by the department, concerning the
activities identified in clause (i) of any affiliate or subsidiary
engaging in consumer lending to Indiana residents in the
states identified under clause (i).
(iii) The industrial loan and investment company provides
written consent allowing the department to inspect or
examine all out of state locations in which an affiliate or a
subsidiary of the industrial loan and investment company
engages in the activities identified under clause (i) for the
purpose of investigating the affiliate's or subsidiary's
consumer lending practices involving Indiana residents. An
inspection or examination performed by the department
under this clause is subject to the schedule of fees
established by the department under IC 28-11-3-5.
(e) A sale, lease, or loan transaction does not occur in Indiana
if a consumer who is a resident of Indiana enters into a
consumer sale, lease, or loan transaction secured by an interest
in land located outside Indiana.
For purposes of subdivisions (a) through (c), an offer is received by
a creditor or a person acting on behalf of the creditor in Indiana if the
offer is physically delivered, or otherwise transmitted or
communicated, to a person who has actual or apparent authority to
act for the creditor or the person acting on behalf of the creditor in
Indiana, regardless of whether approval, acceptance, or ratification
by any other agent or representative of the creditor or the person
acting on behalf of the creditor in another state is necessary to give
legal consequence to the consumer credit transaction.
(2) IC 24-4.5-5-101 through IC 24-4.5-5-108 apply to actions or
other proceedings brought in this state to enforce rights arising from
consumer credit sales, consumer leases, or consumer loans, or
extortionate extensions of credit, wherever made.
(3) Except as provided in subsection (2), a sale, lease, loan, or
modification thereof, made in another state to a person who was not
a resident of this state when the sale, lease, loan, or modification was
made is valid and enforceable in this state according to its terms to
the extent that it is valid and enforceable under the laws of the state
applicable to the transaction.
(4) For the purposes of this article, the residence of a buyer,
lessee, or debtor is the address given by the buyer, lessee, or debtor
as the buyer's, lessee's, or debtor's residence in any writing or
electronic communication made by the buyer, lessee, or debtor in
connection with a credit transaction. Until the buyer, lessee, or
debtor notifies the creditor or the person acting on behalf of the
creditor of a new or different address, the given address is presumed
to be unchanged.
(5) Notwithstanding other provisions of this section:
(a) except as provided in subsection (2), this article does not
apply if the buyer, lessee, or debtor is not a resident of this state
at the time of a credit transaction and the parties then agree that
the law of the buyer's, lessee's, or debtor's residence applies;
and
(b) this article applies if the buyer, lessee, or debtor is a resident
of this state at the time of a credit transaction and the parties
then agree that the law of this state applies.
(6) Except as provided in subsection (5), the following agreements
by a buyer, lessee, or debtor are invalid with respect to consumer
credit sales, consumer leases, consumer loans, or modifications
thereof, to which this article applies:
(a) that the law of another state shall apply;
(b) that the buyer, lessee, or debtor consents to the jurisdiction
of another state; and
(c) that fixes venue.
(7) The following provisions of this article specify the applicable
law governing certain cases:
(a) applicability (IC 24-4.5-6-102) of the provisions on powers
and functions of the department; and
(b) applicability (IC 24-4.5-6-201) of the provisions on
notification and fees.
(8) If a creditor or a person acting on behalf of the creditor has
violated the provisions of this article that apply to the authority to
make consumer loans (IC 24-4.5-3-502), the loan is void and the
debtor is not obligated to pay either the principal or loan finance
charge, as set forth in IC 24-4.5-5-202. (Formerly: Acts 1971, P.L.366, SEC.2.) As amended by Acts 1979,
P.L.236, SEC.1; P.L.152-1986, SEC.59; P.L.252-1987, SEC.5;
P.L.14-1992, SEC.6; P.L.122-1994, SEC.4; P.L.10-2006, SEC.2 and
P.L.57-2006, SEC.2; P.L.213-2007, SEC.6; P.L.217-2007, SEC.5;
P.L.90-2008, SEC.5.
IC 24-4.5-1-202 Exclusions
Sec. 202. This article does not apply to the following:
(1) Extensions of credit to government or governmental
agencies or instrumentalities.
(2) The sale of insurance by an insurer, except as otherwise
provided in the chapter on insurance (IC 24-4.5-4).
(3) Transactions under public utility, municipal utility, or
common carrier tariffs if a subdivision or agency of this state or
of the United States regulates the charges for the services
involved, the charges for delayed payment, and any discount
allowed for early payment.
(4) The rates and charges and the disclosure of rates and
charges of a licensed pawnbroker established in accordance
with a statute or ordinance concerning these matters.
(5) A sale of goods, services, or an interest in land in which the
goods, services, or interest in land are purchased primarily for
a purpose other than a personal, family, or household purpose.
(6) A loan in which the debt is incurred primarily for a purpose
other than a personal, family, or household purpose.
(7) An extension of credit primarily for a business, a
commercial, or an agricultural purpose.
(8) An installment agreement for the purchase of home fuels in
which a finance charge is not imposed.
(9) Loans made, insured, or guaranteed under a program
authorized by Title IV of the Higher Education Act of 1965 (20
U.S.C. 1070 et seq.).
(10) Transactions in securities or commodities accounts in
which credit is extended by a broker-dealer registered with the
Securities and Exchange Commission or the Commodity
Futures Trading Commission.
(11) Except for IC 24-4.5-3-502.1(2), IC 24-4.5-3-503.3,
IC 24-4.5-3-505(4), and IC 24-4.5-3-505(5), a loan made:
(A) in compliance with the requirements of; and
(B) by a community development corporation (as defined in
IC 4-4-28-2) acting as a subrecipient of funds from;
the Indiana housing and community development authority
established by IC 5-20-1-3.
(12) Except for IC 24-4.5-3-502.1(2), IC 24-4.5-3-503.3,
IC 24-4.5-3-505(4), and IC 24-4.5-3-505(5), a subordinate lien
mortgage transaction made by an entity that exclusively uses
funds provided by the United States Department of Housing and
Urban Development under Title 1 of the Housing and
Community Development Act of 1974, Public Law 93-383, as
amended (42 U.S.C. 5301 et seq). (Formerly: Acts 1971, P.L.366, SEC.2.) As amended by Acts 1981,
P.L.217, SEC.1; Acts 1982, P.L.149, SEC.1; P.L.247-1983, SEC.1;
P.L.14-1992, SEC.7; P.L.176-1996, SEC.2; P.L.73-2004, SEC.16;
P.L.1-2006, SEC.410 and P.L.181-2006, SEC.57; P.L.35-2010,
SEC.39.
IC 24-4.5-1-203
Repealed
(Repealed by P.L.35-2010, SEC.209.)
IC 24-4.5-1-204 Regulation of individuals also conducting loan brokerage business;
department's cooperation with securities commissioner
Sec. 204. In examinations or other regulatory activities conducted
by the department and related to licensees under this article, the
department may cooperate with the Indiana securities commissioner
in the regulation of individuals who, in addition to conducting
business regulated under this article, also conduct a loan broker
business subject to IC 23-2-5. As added by P.L.35-2010, SEC.40.
(Part 3. Definitions)
IC 24-4.5-1-301
Repealed
(Repealed by P.L.35-2010, SEC.209.)
IC 24-4.5-1-301.5 Definitions
Sec. 301.5. In addition to definitions appearing in subsequent
chapters in this article, the following definitions apply throughout
this article:
(1) "Affiliate", with respect to any person subject to this article,
means a person that, directly or indirectly, through one (1) or more
intermediaries:
(a) controls;
(b) is controlled by; or
(c) is under common control with;
the person subject to this article.
(2) "Agreement" means the bargain of the parties in fact as found
in their language or by implication from other circumstances,
including course of dealing or usage of trade or course of
performance.
(3) "Agricultural purpose" means a purpose related to the
production, harvest, exhibition, marketing, transportation,
processing, or manufacture of agricultural products by a natural
person who cultivates, plants, propagates, or nurtures the agricultural
products. "Agricultural products" includes agricultural, horticultural,
viticultural, and dairy products, livestock, wildlife, poultry, bees,
forest products, fish and shellfish, and any and all products raised or
produced on farms and any processed or manufactured products
thereof.
(4) "Average daily balance" means the sum of each of the daily
balances in a billing cycle divided by the number of days in the
billing cycle, and if the billing cycle is a month, the creditor may
elect to treat the number of days in each billing cycle as thirty (30).
(5) "Closing costs" with respect to a subordinate lien mortgage
transaction includes:
(a) fees or premiums for title examination, title insurance, or
similar purposes, including surveys;
(b) fees for preparation of a deed, settlement statement, or other
documents;
(c) escrows for future payments of taxes and insurance;
(d) fees for notarizing deeds and other documents;
(e) appraisal fees; and
(f) fees for credit reports.
(6) "Conspicuous" refers to a term or clause when it is so written
that a reasonable person against whom it is to operate ought to have
noticed it.
(7) "Consumer credit" means credit offered or extended to a
consumer primarily for a personal, family, or household purpose.
(8) "Consumer credit sale" is a sale of goods, services, or an
interest in land in which:
(a) credit is granted by a person who regularly engages as a
seller in credit transactions of the same kind;
(b) the buyer is a person other than an organization;
(c) the goods, services, or interest in land are purchased
primarily for a personal, family, or household purpose;
(d) either the debt is payable in installments or a finance charge
is made; and
(e) with respect to a sale of goods or services, either the amount
financed does not exceed fifty thousand dollars ($50,000) or the
debt is secured by personal property used or expected to be used
as the principal dwelling of the buyer.
Unless the sale is made subject to this article by agreement (IC
24-4.5-2-601), "consumer credit sale" does not include a sale in
which the seller allows the buyer to purchase goods or services
pursuant to a lender credit card or similar arrangement or except as
provided with respect to disclosure (IC 24-4.5-2-301), debtors'
remedies (IC 24-4.5-5-201), providing payoff amounts (IC
24-4.5-2-209), and powers and functions of the department (IC
24-4.5-6-101), a sale of an interest in land which is a first lien
mortgage transaction.
(9) "Consumer loan" means a loan made by a person regularly
engaged in the business of making loans in which:
(a) the debtor is a person other than an organization;
(b) the debt is primarily for a personal, family, or household
purpose;
(c) either the debt is payable in installments or a loan finance
charge is made; and
(d) either:
(i) the principal does not exceed fifty thousand dollars
($50,000); or
(ii) the debt is secured by an interest in land or by personal
property used or expected to be used as the principal
dwelling of the debtor.
Except as described in IC 24-4.5-3-105 of this chapter, the term does
not include a first lien mortgage transaction.
(10) "Credit" means the right granted by a creditor to a debtor to
defer payment of debt or to incur debt and defer its payment.
(11) "Creditor" means a person:
(a) who regularly engages in the extension of consumer credit
that is subject to a credit service charge or loan finance charge,
as applicable, or is payable by written agreement in more than
four (4) installments (not including a down payment); and
(b) to whom the obligation is initially payable, either on the
face of the note or contract, or by agreement when there is not
a note or contract.
(12) "Depository institution" has the meaning set forth in the
federal Federal Deposit Insurance Act (12 U.S.C. 1813(c)) and
includes any credit union.
(13) "Director" means the director of the department of financial
institutions or the director's designee.
(14) "Dwelling" means a residential structure that contains one (1)
to four (4) units, regardless of whether the structure is attached to
real property. The term includes an individual:
(a) condominium unit;
(b) cooperative unit;
(c) mobile home; or
(d) trailer;
that is used as a residence.
(15) "Earnings" means compensation paid or payable for personal
services, whether denominated as wages, salary, commission, bonus,
or otherwise, and includes periodic payments under a pension or
retirement program.
(16) "Employee" means an individual who is paid wages or other
compensation by an employer required under federal income tax law
to file Form W-2 on behalf of the individual.
(17) "Federal banking agencies" means the Board of Governors
of the Federal Reserve System, the Comptroller of the Currency, the
Office of Thrift Supervision, the National Credit Union
Administration, and the Federal Deposit Insurance Corporation.
(18) "First lien mortgage transaction" means:
(a) a loan; or
(b) a consumer credit sale;
that is or will be used by the debtor primarily for personal, family, or
household purposes and that is secured by a mortgage, a land
contract, or another equivalent consensual security interest that
constitutes a first lien on a dwelling or residential real estate.
(19) "Immediate family member" means a spouse, child, sibling,
parent, grandparent, or grandchild. The term includes stepparents,
stepchildren, stepsiblings, and adoptive relationships.
(20) "Individual" means a natural person.
(21) "Lender credit card or similar arrangement" means an
arrangement or loan agreement, other than a seller credit card,
pursuant to which a lender gives a debtor the privilege of using a
credit card, letter of credit, or other credit confirmation or
identification in transactions out of which debt arises:
(a) by the lender's honoring a draft or similar order for the
payment of money drawn or accepted by the debtor;
(b) by the lender's payment or agreement to pay the debtor's
obligations; or
(c) by the lender's purchase from the obligee of the debtor's
obligations.
(22) "Licensee" means a person licensed as a creditor under this
article.
(23) "Loan brokerage business" means any activity in which a
person, in return for any consideration from any source, procures,
attempts to procure, or assists in procuring, a mortgage transaction
from a third party or any other person, whether or not the person
seeking the mortgage transaction actually obtains the mortgage
transaction.
(24) "Loan processor or underwriter" means an individual who
performs clerical or support duties as an employee at the direction of,
and subject to the supervision and instruction of, a person licensed
or exempt from licensing under this article. For purposes of this
subsection, the term "clerical or support duties" may include, after
the receipt of an application, the following:
(a) The receipt, collection, distribution, and analysis of
information common for the processing or underwriting of a
mortgage transaction.
(b) The communication with a consumer to obtain the
information necessary for the processing or underwriting of a
loan, to the extent that the communication does not include:
(i) offering or negotiating loan rates or terms; or
(ii) counseling consumers about mortgage transaction rates
or terms.
An individual engaging solely in loan processor or underwriter
activities, shall not represent to the public through advertising or
other means of communicating or providing information, including
the use of business cards, stationery, brochures, signs, rate lists, or
other promotional items, that the individual can or will perform any
of the activities of a mortgage loan originator.
(25) "Mortgage loan originator" means an individual who, for
compensation or gain, or in the expectation of compensation or gain,
engages in taking a mortgage transaction application or in offering
or negotiating the terms of a mortgage transaction that either is made
under this article or under IC 24-4.5 or is made by an employee of a
person licensed or exempt from licensing under this article or under
IC 24-4.5, while the employee is engaging in the loan brokerage
business. The term does not include the following:
(a) An individual engaged solely as a loan processor or
underwriter as long as the individual works exclusively as an
employee of a person licensed or exempt from licensing under
this article.
(b) Unless the person or entity is compensated by:
(i) a creditor;
(ii) a loan broker;
(iii) other mortgage loan originator; or
(iv) any agent of the creditor, loan broker, or other mortgage
loan originator described in items (i) through (iii);
a person or entity that only performs real estate brokerage
activities and is licensed or registered in accordance with
applicable state law.
(c) A person solely involved in extensions of credit relating to
timeshare plans (as defined in 11 U.S.C. 101(53D)).
(26) "Mortgage servicer" means the last person to whom a
mortgagor or the mortgagor's successor in interest has been
instructed by a mortgagee to send payments on a loan secured by a
mortgage.
(27) "Mortgage transaction" means:
(a) a loan; or
(b) a consumer credit sale;
that is or will be used by the debtor primarily for personal, family, or
household purposes and that is secured by a mortgage, a land
contract, or another equivalent consensual security interest on a
dwelling or residential real estate.
(28) "Nationwide Mortgage Licensing System and Registry" or
"NMLSR" means a mortgage licensing system developed and
maintained by the Conference of State Bank Supervisors and the
American Association of Residential Mortgage Regulators for the
licensing and registration of creditors and mortgage loan originators.
(29) "Nontraditional mortgage product" means any mortgage
product other than a thirty (30) year fixed rate mortgage.
(30) "Official fees" means:
(a) fees and charges prescribed by law which actually are or
will be paid to public officials for determining the existence of
or for perfecting, releasing, or satisfying a security interest
related to a consumer credit sale, consumer lease, or consumer
loan; or
(b) premiums payable for insurance in lieu of perfecting a
security interest otherwise required by the creditor in
connection with the sale, lease, or loan, if the premium does not
exceed the fees and charges described in paragraph (a) that
would otherwise be payable.
(31) "Organization" means a corporation, a government or
governmental subdivision, an agency, a trust, an estate, a partnership,
a limited liability company, a cooperative, an association, a joint
venture, an unincorporated organization, or any other entity, however
organized.
(32) "Payable in installments" means that payment is required or
permitted by written agreement to be made in more than four (4)
installments not including a down payment.
(33) "Person" includes an individual or an organization.
(34) "Person related to" with respect to an individual means:
(a) the spouse of the individual;
(b) a brother, brother-in-law, sister, or sister-in-law of the
individual;
(c) an ancestor or lineal descendants of the individual or the
individual's spouse; and
(d) any other relative, by blood or marriage, of the individual or
the individual's spouse who shares the same home with the
individual.
(35) "Person related to" with respect to an organization means:
(a) a person directly or indirectly controlling, controlled by, or
under common control with the organization;
(b) a director, an executive officer, or a manager of the
organization or a person performing similar functions with
respect to the organization or to a person related to the
organization;
(c) the spouse of a person related to the organization; and
(d) a relative by blood or marriage of a person related to the
organization who shares the same home with the person.
(36) "Presumed" or "presumption" means that the trier of fact
must find the existence of the fact presumed, unless and until
evidence is introduced that would support a finding of its
nonexistence.
(37) "Real estate brokerage activity" means any activity that
involves offering or providing real estate brokerage services to the
public, including the following:
(a) Acting as a real estate agent or real estate broker for a buyer,
seller, lessor, or lessee of real property.
(b) Bringing together parties interested in the sale, purchase,
lease, rental, or exchange of real property.
(c) Negotiating, on behalf of any party, any part of a contract
relating to the sale, purchase, lease, rental, or exchange of real
property (other than in connection with providing financing
with respect to the sale, purchase, lease, rental, or exchange of
real property).
(d) Engaging in any activity for which a person is required to be
registered or licensed as a real estate agent or real estate broker
under any applicable law.
(e) Offering to engage in any activity, or act in any capacity,
described in this subsection.
(38) "Registered mortgage loan originator" means any individual
who:
(a) meets the definition of mortgage loan originator and is an
employee of:
(i) a depository institution;
(ii) a subsidiary that is owned and controlled by a depository
institution and regulated by a federal banking agency; or
(iii) an institution regulated by the Farm Credit
Administration; and
(b) is registered with, and maintains a unique identifier through,
the NMLSR.
(39) "Regularly engaged" means a person who extends consumer
credit:
(a) more than twenty-five (25) times; or
(b) at least one (1) time for a mortgage transaction secured by
a dwelling;
in the preceding calendar year. If a person did not meet these
numerical standards in the preceding calendar year, the numerical
standards shall be applied to the current calendar year.
(40) "Residential real estate" means any real property that is
located in Indiana and on which there is located or intended to be
constructed a dwelling.
(41) "Seller credit card" means an arrangement that gives to a
buyer or lessee the privilege of using a credit card, letter of credit, or
other credit confirmation or identification for the purpose of
purchasing or leasing goods or services from that person, a person
related to that person, or from that person and any other person. The
term includes a card that is issued by a person, that is in the name of
the seller, and that can be used by the buyer or lessee only for
purchases or leases at locations of the named seller.
(42) "Subordinate lien mortgage transaction" means:
(a) a loan; or
(b) a consumer credit sale;
that is or will be used by the debtor primarily for personal, family, or
household purposes and that is secured by a mortgage, a land
contract, or another equivalent consensual security interest that
constitutes a subordinate lien on a dwelling or residential real estate.
(43) "Unique identifier" means a number or other identifier
assigned by protocols established by the NMLSR. As added by P.L.35-2010, SEC.41.
IC 24-4.5-1-302 Federal Consumer Credit Protection Act
Sec. 302. Federal Consumer Credit Protection Act _ In this
Article "Federal Consumer Credit Protection Act" means the
Consumer Credit Protection Act (Public Law 90-321; 82 Stat. 146),
as amended, and includes both the Truth in Lending Simplification
and Reform Act amendments (Public Law 96-221, Title VI, 94 Stat.
168) and any regulations issued pursuant to those laws. However, the
department may otherwise define this term by rule issued in
accordance with IC 24-4.5-6-107. (Formerly: Acts 1971, P.L.366, SEC.2.) As amended by Acts 1982,
P.L.149, SEC.2; P.L.14-1992, SEC.10.
IC 24-4.5-1-303
Repealed
(Repealed by P.L.35-2010, SEC.209.)
IC 24-4.5 ARTICLE 4.5. UNIFORM CONSUMER CREDIT
CODE
IC 24-4.5-1
Chapter 1. General Provisions and Definitions
(Part 1. Short Title, Construction, General Provisions)
IC 24-4.5-1-101 Short title
Sec. 101. Short Title _ This Article shall be known and may be
cited as Uniform Consumer Credit Code. (Formerly: Acts 1971, P.L.366, SEC.2.)
IC 24-4.5-1-102 Purposes; rules of construction; application to disguised consumer
credit transactions; violations of other consumer credit laws,
regulation, or rules; enforcing disclosure requirements for
mortgage transactions
Sec. 102. (1) This article shall be liberally construed and applied
to promote its underlying purposes and policies.
(2) The underlying purposes and policies of this article are:
(a) to simplify, clarify, and modernize the law governing retail
installment sales, consumer credit, small loans, and usury;
(b) to provide rate ceilings to assure an adequate supply of
credit to consumers;
(c) to further consumer understanding of the terms of credit
transactions and to foster competition among suppliers of
consumer credit so that consumers may obtain credit at
reasonable cost;
(d) to protect consumer buyers, lessees, and borrowers against
unfair practices by some suppliers of consumer credit, having
due regard for the interests of legitimate and scrupulous
creditors;
(e) to permit and encourage the development of fair and
economically sound consumer credit practices;
(f) to conform the regulation of consumer credit transactions to
the policies of the Federal Consumer Credit Protection Act; and
(g) to make uniform the law including administrative rules
among the various jurisdictions.
(3) A reference to a requirement imposed by this article includes
reference to a related rule or guidance of the department adopted
pursuant to this article.
(4) A reference to a federal law in IC 24-4.5 is a reference to the
law in effect December 31, 2009.
(5) This article applies to a transaction if the director determines
that the transaction:
(a) is in substance a disguised consumer credit transaction; or
(b) involves the application of subterfuge for the purpose of
avoiding this article.
A determination by the director under this paragraph must be in
writing and shall be delivered to all parties to the transaction.
IC 4-21.5-3 applies to a determination made under this paragraph.
(6) The authority of this article remains in effect, whether a
licensee, an individual, or a person subject to this article acts or
claims to act under any licensing or registration law of this state, or
claims to act without such authority.
(7) A violation of a state or federal law, regulation, or rule
applicable to consumer credit transactions is a violation of this
article.
(8) The department may enforce penalty provisions set forth in 15
U.S.C. 1640 for violations of disclosure requirements applicable to
mortgage transactions. (Formerly: Acts 1971, P.L.366, SEC.2.) As amended by P.L.14-1992,
SEC.2; P.L.122-1994, SEC.1; P.L.45-1995, SEC.2; P.L.176-1996,
SEC.1; P.L.172-1997, SEC.1; P.L.80-1998, SEC.2; P.L.23-2000,
SEC.1; P.L.63-2001, SEC.1 and P.L.134-2001, SEC.1; P.L.82-2002,
SEC.1; P.L.258-2003, SEC.1; P.L.73-2004, SEC.15; P.L.141-2005,
SEC.1; P.L.10-2006, SEC.1 and P.L.57-2006, SEC.1; P.L.213-2007,
SEC.5; P.L.217-2007, SEC.4; P.L.90-2008, SEC.4;
P.L.182-2009(ss), SEC.370; P.L.35-2010, SEC.36.
IC 24-4.5-1-103 Supplementary general principles of law applicable
Sec. 103. Unless displaced by the particular provisions of this
article, the Uniform Commercial Code (IC 26-1) and the principles
of law and equity (including the law relative to capacity to contract,
principal and agent, estoppel, fraud, misrepresentation, duress,
coercion, mistake, bankruptcy, or other validating or invalidating
cause) shall supplement its provisions. (Formerly: Acts 1971, P.L.366, SEC.2.) As amended by
P.L.152-1986, SEC.57.
IC 24-4.5-1-104 Construction against implicit repeal
Sec. 104. Construction Against Implicit Repeal _ This Article
being a general act intended as a unified coverage of its subject
matter, no part of it shall be deemed to be impliedly repealed by
subsequent legislation if such construction can reasonably be
avoided. (Formerly: Acts 1971, P.L.366, SEC.2.)
IC 24-4.5-1-105 Severability
Sec. 105. Severability _ If any provisions of this Article or the
application thereof to any person or circumstances is held invalid, the
invalidity does not affect other provisions or applications of this
Article which can be given effect without the invalid provision or
application, and to this end the provisions of this Article are
severable. (Formerly: Acts 1971, P.L.366, SEC.2.)
IC 24-4.5-1-106 Adjustment of dollar amounts
Sec. 106. (1) The dollar amounts in this article designated as
subject to change shall change, as provided in this section, according
to the Consumer Price Index for Urban Wage Earners and Clerical
Workers: U.S. City Average, All Items, 1957-59 equals 100,
compiled by Bureau of Labor Statistics, United States Department of
Labor, and referred to in this section as the Index. The Index for
October, 1971, is the Reference Base Index.
(2) The dollar amounts shall change on July 1 of each
even-numbered year if the percentage of change, calculated to the
nearest whole percentage point, between the Index at the end of the
preceding year and the Reference Base Index is ten percent (10%) or
more, except that:
(a) the portion of the percentage change in the Index in excess
of a multiple of ten percent (10%) shall be disregarded and the
dollar amounts shall change only in multiples of ten percent
(10%) of the amounts on March 5, 1971;
(b) the dollar amounts shall not change if the amounts required
by this section are those currently in effect pursuant to this
article as a result of earlier application of the section; and
(c) in no event shall the dollar amounts be reduced below the
amounts appearing in this article on March 5, 1971.
(3) If the Index is revised after December 1967, the percentage of
change shall be calculated on the basis of the revised Index. If the
revision of the Index changes the Reference Base Index, a revised
Reference Base Index shall be determined by multiplying the
Reference Base Index by the ratio of the revised Index to the current
Index, as each was for the first month in which the revised Index is
available. If the Index is superseded, the Index is the one represented
by the Bureau of Labor Statistics as reflecting most accurately
changes in the purchasing power of the dollar for consumers.
(4) The department shall issue an emergency rule announcing:
(a) on or before April 30 of each year in which dollar amounts
are to change, the changes in dollar amounts required by
subsection (2); and
(b) promptly after the changes occur, changes in the Index
required by subsection (3), including, when applicable, the
numerical equivalent of the Reference Base Index under a
revised Reference Base Index and the designation or title of any
index superseding the Index.
(5) A person does not violate this article through a transaction
otherwise complying with this article if the person relies on dollar
amounts either determined according to subsection (2) or appearing
in the last rule of the department announcing the then current dollar
amounts. (Formerly: Acts 1971, P.L.366, SEC.2; Acts 1972, P.L.182, SEC.1;
Acts 1972, P.L.182, SEC.2.) As amended by P.L.152-1986, SEC.58;
P.L.3-1990, SEC.84; P.L.14-1992, SEC.3; P.L.1-1994, SEC.117;
P.L.122-1994, SEC.2.
IC 24-4.5-1-107 Waiver; agreement to forego rights; settlement of claims
Sec. 107. Waiver; Agreement to Forego Rights; Settlement of
Claims - (1) Except as otherwise provided in this Article, a buyer,
lessee, or debtor may not waive or agree to forego rights or benefits
under this Article.
(2) A claim by a buyer, lessee, or debtor against a creditor for an
excess charge, other violation of this Article, or civil penalty, or a
claim against a buyer, lessee, or debtor for default or breach of a duty
imposed by this Article, if disputed in good faith, may be settled by
agreement.
(3) A claim, whether or not disputed against a buyer, lessee or
debtor may be settled for less value than the amount claimed.
(4) A settlement in which the buyer, lessee, or debtor waives or
agrees to forego rights or benefits under this Article is invalid if the
court as a matter of law finds the settlement to have been
unconscionable at the time it was made. The competence of the
buyer, lessee, or debtor, any deception or coercion practiced upon
him, the nature and extent of the legal advice received by him, and
the value of the consideration are relevant to the issue of
unconscionability. (Formerly: Acts 1971, P.L.366, SEC.2.)
IC 24-4.5-1-108 Effect on powers of organizations
Sec. 108. (1) This article prescribes maximum charges for all
creditors, except lessors and those excluded (IC 24-4.5-1-202),
extending consumer credit, including consumer credit sales (IC
24-4.5-1-301.5(8)), consumer loans (IC 24-4.5-1-301.5(9)), and
consumer related sales and loans (IC 24-4.5-2-602 and
IC 24-4.5-3-602), and displaces existing limitations on the powers of
those creditors based on maximum charges.
(2) With respect to sellers of goods or services, small loan
companies, licensed lenders, consumer and sales finance companies,
industrial loan and investment companies, and commercial banks and
trust companies, this article displaces existing limitations on their
powers based solely on amount or duration of credit.
(3) Except as provided in subsection (1) and IC 24-4.6-1, this
article does not displace limitations on powers of credit unions,
savings banks, savings or building and loan associations, or other
thrift institutions whether organized for the profit of shareholders or
as mutual organizations.
(4) Except as provided in subsections (1) and (2), this article does
not displace:
(a) limitations on powers of depository institutions (IC
24-4.5-1-301.5) with respect to the amount of a loan to a single
borrower, the ratio of a loan to the value of collateral, the
duration of a loan that is a mortgage transaction, or other
similar restrictions designed to protect deposits; or
(b) limitations on powers an organization is authorized to
exercise under the laws of this state or the United States. (Formerly: Acts 1971, P.L.366, SEC.2; Acts 1974, P.L.115, SEC.3.)
As amended by P.L.14-1992, SEC.4; P.L.122-1994, SEC.3;
P.L.35-2010, SEC.37.
IC 24-4.5-1-109 Persons licensed or authorized on October 1, 1971
Sec. 109. All persons licensed on October 1, 1971, under:
(1) IC 24-5-4 (before its repeal on October 1, 1971);
(2) IC 28-7-4 (before its repeal on October 1, 1971);
(3) IC 28-7-2 (before its repeal on October 1, 1971); or
(4) IC 28-5-1-4;
are licensed to make supervised loans under this article, subject to
the renewal provisions contained in this article. All provisions of this
article apply to the persons previously licensed or authorized. The
department may deliver evidence of licensing to the persons
previously licensed or authorized. As added by P.L.5-1988, SEC.128. Amended by P.L.3-1990, SEC.85;
P.L.14-1992, SEC.5; P.L.35-2010, SEC.38.
IC 24-4.5-1-201 Territorial application; activities in other states by industrial loan
and investment companies
Sec. 201. (1) Except as otherwise provided in this section, this
article applies to sales, leases, and loans made in this state and to
modifications, including refinancings, consolidations, and deferrals,
made in this state, of sales, leases, and loans, wherever made. For
purposes of this article, the following apply:
(a) A sale or modification of a sale agreement is made in this
state if the buyer's agreement or offer to purchase or to modify
is received by the seller or a person acting on behalf of the
seller in this state.
(b) A lease or modification of a lease agreement is made in this
state if the lessee's agreement or offer to lease or to modify is
received by the lessor or a person acting on behalf of the lessor
in this state.
(c) A loan or modification of a loan agreement is made in this
state if a writing signed by the debtor and evidencing the debt
is received by the lender or a person acting on behalf of the
lender in this state.
(d) Except as provided in subdivision (e), a sale, lease, or loan
transaction occurs in Indiana if a consumer who is a resident of
Indiana enters into a consumer sale, lease, or loan transaction
with a creditor or a person acting on behalf of the creditor in
another state and the creditor or the person acting on behalf of
the creditor has advertised or solicited sales, leases, or loans in
Indiana by any means, including by mail, brochure, telephone,
print, radio, television, the Internet, or electronic means.
However, during the period beginning July 1, 2007, and ending
June 30, 2009, this subdivision does not apply to an affiliate or
a subsidiary of a financial corporation issued a certificate of
authority to operate as an industrial loan and investment
company under IC 28-5 if all of the following apply:
(i) The industrial loan and investment company notifies the
department in writing that an affiliate or a subsidiary of the
industrial loan and investment company engages or plans to
engage in activity involving Indiana residents at an out of
state location. The notification required by this clause must
list all states other than Indiana in which consumer loans
may be made and must describe the nature of the proposed
transactions.
(ii) The industrial loan and investment company provides
written consent allowing the department to consult with and
review information provided by other state regulators, as
may be requested by the department, concerning the
activities identified in clause (i) of any affiliate or subsidiary
engaging in consumer lending to Indiana residents in the
states identified under clause (i).
(iii) The industrial loan and investment company provides
written consent allowing the department to inspect or
examine all out of state locations in which an affiliate or a
subsidiary of the industrial loan and investment company
engages in the activities identified under clause (i) for the
purpose of investigating the affiliate's or subsidiary's
consumer lending practices involving Indiana residents. An
inspection or examination performed by the department
under this clause is subject to the schedule of fees
established by the department under IC 28-11-3-5.
(e) A sale, lease, or loan transaction does not occur in Indiana
if a consumer who is a resident of Indiana enters into a
consumer sale, lease, or loan transaction secured by an interest
in land located outside Indiana.
For purposes of subdivisions (a) through (c), an offer is received by
a creditor or a person acting on behalf of the creditor in Indiana if the
offer is physically delivered, or otherwise transmitted or
communicated, to a person who has actual or apparent authority to
act for the creditor or the person acting on behalf of the creditor in
Indiana, regardless of whether approval, acceptance, or ratification
by any other agent or representative of the creditor or the person
acting on behalf of the creditor in another state is necessary to give
legal consequence to the consumer credit transaction.
(2) IC 24-4.5-5-101 through IC 24-4.5-5-108 apply to actions or
other proceedings brought in this state to enforce rights arising from
consumer credit sales, consumer leases, or consumer loans, or
extortionate extensions of credit, wherever made.
(3) Except as provided in subsection (2), a sale, lease, loan, or
modification thereof, made in another state to a person who was not
a resident of this state when the sale, lease, loan, or modification was
made is valid and enforceable in this state according to its terms to
the extent that it is valid and enforceable under the laws of the state
applicable to the transaction.
(4) For the purposes of this article, the residence of a buyer,
lessee, or debtor is the address given by the buyer, lessee, or debtor
as the buyer's, lessee's, or debtor's residence in any writing or
electronic communication made by the buyer, lessee, or debtor in
connection with a credit transaction. Until the buyer, lessee, or
debtor notifies the creditor or the person acting on behalf of the
creditor of a new or different address, the given address is presumed
to be unchanged.
(5) Notwithstanding other provisions of this section:
(a) except as provided in subsection (2), this article does not
apply if the buyer, lessee, or debtor is not a resident of this state
at the time of a credit transaction and the parties then agree that
the law of the buyer's, lessee's, or debtor's residence applies;
and
(b) this article applies if the buyer, lessee, or debtor is a resident
of this state at the time of a credit transaction and the parties
then agree that the law of this state applies.
(6) Except as provided in subsection (5), the following agreements
by a buyer, lessee, or debtor are invalid with respect to consumer
credit sales, consumer leases, consumer loans, or modifications
thereof, to which this article applies:
(a) that the law of another state shall apply;
(b) that the buyer, lessee, or debtor consents to the jurisdiction
of another state; and
(c) that fixes venue.
(7) The following provisions of this article specify the applicable
law governing certain cases:
(a) applicability (IC 24-4.5-6-102) of the provisions on powers
and functions of the department; and
(b) applicability (IC 24-4.5-6-201) of the provisions on
notification and fees.
(8) If a creditor or a person acting on behalf of the creditor has
violated the provisions of this article that apply to the authority to
make consumer loans (IC 24-4.5-3-502), the loan is void and the
debtor is not obligated to pay either the principal or loan finance
charge, as set forth in IC 24-4.5-5-202. (Formerly: Acts 1971, P.L.366, SEC.2.) As amended by Acts 1979,
P.L.236, SEC.1; P.L.152-1986, SEC.59; P.L.252-1987, SEC.5;
P.L.14-1992, SEC.6; P.L.122-1994, SEC.4; P.L.10-2006, SEC.2 and
P.L.57-2006, SEC.2; P.L.213-2007, SEC.6; P.L.217-2007, SEC.5;
P.L.90-2008, SEC.5.
IC 24-4.5-1-202 Exclusions
Sec. 202. This article does not apply to the following:
(1) Extensions of credit to government or governmental
agencies or instrumentalities.
(2) The sale of insurance by an insurer, except as otherwise
provided in the chapter on insurance (IC 24-4.5-4).
(3) Transactions under public utility, municipal utility, or
common carrier tariffs if a subdivision or agency of this state or
of the United States regulates the charges for the services
involved, the charges for delayed payment, and any discount
allowed for early payment.
(4) The rates and charges and the disclosure of rates and
charges of a licensed pawnbroker established in accordance
with a statute or ordinance concerning these matters.
(5) A sale of goods, services, or an interest in land in which the
goods, services, or interest in land are purchased primarily for
a purpose other than a personal, family, or household purpose.
(6) A loan in which the debt is incurred primarily for a purpose
other than a personal, family, or household purpose.
(7) An extension of credit primarily for a business, a
commercial, or an agricultural purpose.
(8) An installment agreement for the purchase of home fuels in
which a finance charge is not imposed.
(9) Loans made, insured, or guaranteed under a program
authorized by Title IV of the Higher Education Act of 1965 (20
U.S.C. 1070 et seq.).
(10) Transactions in securities or commodities accounts in
which credit is extended by a broker-dealer registered with the
Securities and Exchange Commission or the Commodity
Futures Trading Commission.
(11) Except for IC 24-4.5-3-502.1(2), IC 24-4.5-3-503.3,
IC 24-4.5-3-505(4), and IC 24-4.5-3-505(5), a loan made:
(A) in compliance with the requirements of; and
(B) by a community development corporation (as defined in
IC 4-4-28-2) acting as a subrecipient of funds from;
the Indiana housing and community development authority
established by IC 5-20-1-3.
(12) Except for IC 24-4.5-3-502.1(2), IC 24-4.5-3-503.3,
IC 24-4.5-3-505(4), and IC 24-4.5-3-505(5), a subordinate lien
mortgage transaction made by an entity that exclusively uses
funds provided by the United States Department of Housing and
Urban Development under Title 1 of the Housing and
Community Development Act of 1974, Public Law 93-383, as
amended (42 U.S.C. 5301 et seq). (Formerly: Acts 1971, P.L.366, SEC.2.) As amended by Acts 1981,
P.L.217, SEC.1; Acts 1982, P.L.149, SEC.1; P.L.247-1983, SEC.1;
P.L.14-1992, SEC.7; P.L.176-1996, SEC.2; P.L.73-2004, SEC.16;
P.L.1-2006, SEC.410 and P.L.181-2006, SEC.57; P.L.35-2010,
SEC.39.
IC 24-4.5-1-203
Repealed
(Repealed by P.L.35-2010, SEC.209.)
IC 24-4.5-1-204 Regulation of individuals also conducting loan brokerage business;
department's cooperation with securities commissioner
Sec. 204. In examinations or other regulatory activities conducted
by the department and related to licensees under this article, the
department may cooperate with the Indiana securities commissioner
in the regulation of individuals who, in addition to conducting
business regulated under this article, also conduct a loan broker
business subject to IC 23-2-5. As added by P.L.35-2010, SEC.40.
(Part 3. Definitions)
IC 24-4.5-1-301
Repealed
(Repealed by P.L.35-2010, SEC.209.)
IC 24-4.5-1-301.5 Definitions
Sec. 301.5. In addition to definitions appearing in subsequent
chapters in this article, the following definitions apply throughout
this article:
(1) "Affiliate", with respect to any person subject to this article,
means a person that, directly or indirectly, through one (1) or more
intermediaries:
(a) controls;
(b) is controlled by; or
(c) is under common control with;
the person subject to this article.
(2) "Agreement" means the bargain of the parties in fact as found
in their language or by implication from other circumstances,
including course of dealing or usage of trade or course of
performance.
(3) "Agricultural purpose" means a purpose related to the
production, harvest, exhibition, marketing, transportation,
processing, or manufacture of agricultural products by a natural
person who cultivates, plants, propagates, or nurtures the agricultural
products. "Agricultural products" includes agricultural, horticultural,
viticultural, and dairy products, livestock, wildlife, poultry, bees,
forest products, fish and shellfish, and any and all products raised or
produced on farms and any processed or manufactured products
thereof.
(4) "Average daily balance" means the sum of each of the daily
balances in a billing cycle divided by the number of days in the
billing cycle, and if the billing cycle is a month, the creditor may
elect to treat the number of days in each billing cycle as thirty (30).
(5) "Closing costs" with respect to a subordinate lien mortgage
transaction includes:
(a) fees or premiums for title examination, title insurance, or
similar purposes, including surveys;
(b) fees for preparation of a deed, settlement statement, or other
documents;
(c) escrows for future payments of taxes and insurance;
(d) fees for notarizing deeds and other documents;
(e) appraisal fees; and
(f) fees for credit reports.
(6) "Conspicuous" refers to a term or clause when it is so written
that a reasonable person against whom it is to operate ought to have
noticed it.
(7) "Consumer credit" means credit offered or extended to a
consumer primarily for a personal, family, or household purpose.
(8) "Consumer credit sale" is a sale of goods, services, or an
interest in land in which:
(a) credit is granted by a person who regularly engages as a
seller in credit transactions of the same kind;
(b) the buyer is a person other than an organization;
(c) the goods, services, or interest in land are purchased
primarily for a personal, family, or household purpose;
(d) either the debt is payable in installments or a finance charge
is made; and
(e) with respect to a sale of goods or services, either the amount
financed does not exceed fifty thousand dollars ($50,000) or the
debt is secured by personal property used or expected to be used
as the principal dwelling of the buyer.
Unless the sale is made subject to this article by agreement (IC
24-4.5-2-601), "consumer credit sale" does not include a sale in
which the seller allows the buyer to purchase goods or services
pursuant to a lender credit card or similar arrangement or except as
provided with respect to disclosure (IC 24-4.5-2-301), debtors'
remedies (IC 24-4.5-5-201), providing payoff amounts (IC
24-4.5-2-209), and powers and functions of the department (IC
24-4.5-6-101), a sale of an interest in land which is a first lien
mortgage transaction.
(9) "Consumer loan" means a loan made by a person regularly
engaged in the business of making loans in which:
(a) the debtor is a person other than an organization;
(b) the debt is primarily for a personal, family, or household
purpose;
(c) either the debt is payable in installments or a loan finance
charge is made; and
(d) either:
(i) the principal does not exceed fifty thousand dollars
($50,000); or
(ii) the debt is secured by an interest in land or by personal
property used or expected to be used as the principal
dwelling of the debtor.
Except as described in IC 24-4.5-3-105 of this chapter, the term does
not include a first lien mortgage transaction.
(10) "Credit" means the right granted by a creditor to a debtor to
defer payment of debt or to incur debt and defer its payment.
(11) "Creditor" means a person:
(a) who regularly engages in the extension of consumer credit
that is subject to a credit service charge or loan finance charge,
as applicable, or is payable by written agreement in more than
four (4) installments (not including a down payment); and
(b) to whom the obligation is initially payable, either on the
face of the note or contract, or by agreement when there is not
a note or contract.
(12) "Depository institution" has the meaning set forth in the
federal Federal Deposit Insurance Act (12 U.S.C. 1813(c)) and
includes any credit union.
(13) "Director" means the director of the department of financial
institutions or the director's designee.
(14) "Dwelling" means a residential structure that contains one (1)
to four (4) units, regardless of whether the structure is attached to
real property. The term includes an individual:
(a) condominium unit;
(b) cooperative unit;
(c) mobile home; or
(d) trailer;
that is used as a residence.
(15) "Earnings" means compensation paid or payable for personal
services, whether denominated as wages, salary, commission, bonus,
or otherwise, and includes periodic payments under a pension or
retirement program.
(16) "Employee" means an individual who is paid wages or other
compensation by an employer required under federal income tax law
to file Form W-2 on behalf of the individual.
(17) "Federal banking agencies" means the Board of Governors
of the Federal Reserve System, the Comptroller of the Currency, the
Office of Thrift Supervision, the National Credit Union
Administration, and the Federal Deposit Insurance Corporation.
(18) "First lien mortgage transaction" means:
(a) a loan; or
(b) a consumer credit sale;
that is or will be used by the debtor primarily for personal, family, or
household purposes and that is secured by a mortgage, a land
contract, or another equivalent consensual security interest that
constitutes a first lien on a dwelling or residential real estate.
(19) "Immediate family member" means a spouse, child, sibling,
parent, grandparent, or grandchild. The term includes stepparents,
stepchildren, stepsiblings, and adoptive relationships.
(20) "Individual" means a natural person.
(21) "Lender credit card or similar arrangement" means an
arrangement or loan agreement, other than a seller credit card,
pursuant to which a lender gives a debtor the privilege of using a
credit card, letter of credit, or other credit confirmation or
identification in transactions out of which debt arises:
(a) by the lender's honoring a draft or similar order for the
payment of money drawn or accepted by the debtor;
(b) by the lender's payment or agreement to pay the debtor's
obligations; or
(c) by the lender's purchase from the obligee of the debtor's
obligations.
(22) "Licensee" means a person licensed as a creditor under this
article.
(23) "Loan brokerage business" means any activity in which a
person, in return for any consideration from any source, procures,
attempts to procure, or assists in procuring, a mortgage transaction
from a third party or any other person, whether or not the person
seeking the mortgage transaction actually obtains the mortgage
transaction.
(24) "Loan processor or underwriter" means an individual who
performs clerical or support duties as an employee at the direction of,
and subject to the supervision and instruction of, a person licensed
or exempt from licensing under this article. For purposes of this
subsection, the term "clerical or support duties" may include, after
the receipt of an application, the following:
(a) The receipt, collection, distribution, and analysis of
information common for the processing or underwriting of a
mortgage transaction.
(b) The communication with a consumer to obtain the
information necessary for the processing or underwriting of a
loan, to the extent that the communication does not include:
(i) offering or negotiating loan rates or terms; or
(ii) counseling consumers about mortgage transaction rates
or terms.
An individual engaging solely in loan processor or underwriter
activities, shall not represent to the public through advertising or
other means of communicating or providing information, including
the use of business cards, stationery, brochures, signs, rate lists, or
other promotional items, that the individual can or will perform any
of the activities of a mortgage loan originator.
(25) "Mortgage loan originator" means an individual who, for
compensation or gain, or in the expectation of compensation or gain,
engages in taking a mortgage transaction application or in offering
or negotiating the terms of a mortgage transaction that either is made
under this article or under IC 24-4.5 or is made by an employee of a
person licensed or exempt from licensing under this article or under
IC 24-4.5, while the employee is engaging in the loan brokerage
business. The term does not include the following:
(a) An individual engaged solely as a loan processor or
underwriter as long as the individual works exclusively as an
employee of a person licensed or exempt from licensing under
this article.
(b) Unless the person or entity is compensated by:
(i) a creditor;
(ii) a loan broker;
(iii) other mortgage loan originator; or
(iv) any agent of the creditor, loan broker, or other mortgage
loan originator described in items (i) through (iii);
a person or entity that only performs real estate brokerage
activities and is licensed or registered in accordance with
applicable state law.
(c) A person solely involved in extensions of credit relating to
timeshare plans (as defined in 11 U.S.C. 101(53D)).
(26) "Mortgage servicer" means the last person to whom a
mortgagor or the mortgagor's successor in interest has been
instructed by a mortgagee to send payments on a loan secured by a
mortgage.
(27) "Mortgage transaction" means:
(a) a loan; or
(b) a consumer credit sale;
that is or will be used by the debtor primarily for personal, family, or
household purposes and that is secured by a mortgage, a land
contract, or another equivalent consensual security interest on a
dwelling or residential real estate.
(28) "Nationwide Mortgage Licensing System and Registry" or
"NMLSR" means a mortgage licensing system developed and
maintained by the Conference of State Bank Supervisors and the
American Association of Residential Mortgage Regulators for the
licensing and registration of creditors and mortgage loan originators.
(29) "Nontraditional mortgage product" means any mortgage
product other than a thirty (30) year fixed rate mortgage.
(30) "Official fees" means:
(a) fees and charges prescribed by law which actually are or
will be paid to public officials for determining the existence of
or for perfecting, releasing, or satisfying a security interest
related to a consumer credit sale, consumer lease, or consumer
loan; or
(b) premiums payable for insurance in lieu of perfecting a
security interest otherwise required by the creditor in
connection with the sale, lease, or loan, if the premium does not
exceed the fees and charges described in paragraph (a) that
would otherwise be payable.
(31) "Organization" means a corporation, a government or
governmental subdivision, an agency, a trust, an estate, a partnership,
a limited liability company, a cooperative, an association, a joint
venture, an unincorporated organization, or any other entity, however
organized.
(32) "Payable in installments" means that payment is required or
permitted by written agreement to be made in more than four (4)
installments not including a down payment.
(33) "Person" includes an individual or an organization.
(34) "Person related to" with respect to an individual means:
(a) the spouse of the individual;
(b) a brother, brother-in-law, sister, or sister-in-law of the
individual;
(c) an ancestor or lineal descendants of the individual or the
individual's spouse; and
(d) any other relative, by blood or marriage, of the individual or
the individual's spouse who shares the same home with the
individual.
(35) "Person related to" with respect to an organization means:
(a) a person directly or indirectly controlling, controlled by, or
under common control with the organization;
(b) a director, an executive officer, or a manager of the
organization or a person performing similar functions with
respect to the organization or to a person related to the
organization;
(c) the spouse of a person related to the organization; and
(d) a relative by blood or marriage of a person related to the
organization who shares the same home with the person.
(36) "Presumed" or "presumption" means that the trier of fact
must find the existence of the fact presumed, unless and until
evidence is introduced that would support a finding of its
nonexistence.
(37) "Real estate brokerage activity" means any activity that
involves offering or providing real estate brokerage services to the
public, including the following:
(a) Acting as a real estate agent or real estate broker for a buyer,
seller, lessor, or lessee of real property.
(b) Bringing together parties interested in the sale, purchase,
lease, rental, or exchange of real property.
(c) Negotiating, on behalf of any party, any part of a contract
relating to the sale, purchase, lease, rental, or exchange of real
property (other than in connection with providing financing
with respect to the sale, purchase, lease, rental, or exchange of
real property).
(d) Engaging in any activity for which a person is required to be
registered or licensed as a real estate agent or real estate broker
under any applicable law.
(e) Offering to engage in any activity, or act in any capacity,
described in this subsection.
(38) "Registered mortgage loan originator" means any individual
who:
(a) meets the definition of mortgage loan originator and is an
employee of:
(i) a depository institution;
(ii) a subsidiary that is owned and controlled by a depository
institution and regulated by a federal banking agency; or
(iii) an institution regulated by the Farm Credit
Administration; and
(b) is registered with, and maintains a unique identifier through,
the NMLSR.
(39) "Regularly engaged" means a person who extends consumer
credit:
(a) more than twenty-five (25) times; or
(b) at least one (1) time for a mortgage transaction secured by
a dwelling;
in the preceding calendar year. If a person did not meet these
numerical standards in the preceding calendar year, the numerical
standards shall be applied to the current calendar year.
(40) "Residential real estate" means any real property that is
located in Indiana and on which there is located or intended to be
constructed a dwelling.
(41) "Seller credit card" means an arrangement that gives to a
buyer or lessee the privilege of using a credit card, letter of credit, or
other credit confirmation or identification for the purpose of
purchasing or leasing goods or services from that person, a person
related to that person, or from that person and any other person. The
term includes a card that is issued by a person, that is in the name of
the seller, and that can be used by the buyer or lessee only for
purchases or leases at locations of the named seller.
(42) "Subordinate lien mortgage transaction" means:
(a) a loan; or
(b) a consumer credit sale;
that is or will be used by the debtor primarily for personal, family, or
household purposes and that is secured by a mortgage, a land
contract, or another equivalent consensual security interest that
constitutes a subordinate lien on a dwelling or residential real estate.
(43) "Unique identifier" means a number or other identifier
assigned by protocols established by the NMLSR. As added by P.L.35-2010, SEC.41.
IC 24-4.5-1-302 Federal Consumer Credit Protection Act
Sec. 302. Federal Consumer Credit Protection Act _ In this
Article "Federal Consumer Credit Protection Act" means the
Consumer Credit Protection Act (Public Law 90-321; 82 Stat. 146),
as amended, and includes both the Truth in Lending Simplification
and Reform Act amendments (Public Law 96-221, Title VI, 94 Stat.
168) and any regulations issued pursuant to those laws. However, the
department may otherwise define this term by rule issued in
accordance with IC 24-4.5-6-107. (Formerly: Acts 1971, P.L.366, SEC.2.) As amended by Acts 1982,
P.L.149, SEC.2; P.L.14-1992, SEC.10.
IC 24-4.5-1-303
Repealed
(Repealed by P.L.35-2010, SEC.209.)
