IC 24-4.5-2-101 Short title
Sec. 101. Short Title _ This Chapter shall be known and may be
cited as Uniform Consumer Credit Code - Credit Sales. (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-102 Application
Sec. 102. This chapter applies to consumer credit sales, including
home solicitation sales, and consumer leases. In addition,
IC 24-4.5-2-601 through IC 24-4.5-2-605 apply to consumer related
sales. Licensing under IC 24-4.5-3-502.1 applies to consumer credit
sales that are subordinate lien mortgage transactions. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by
P.L.152-1986, SEC.60; P.L.35-2010, SEC.42.
IC 24-4.5-2-103 Definitions in chapter
Sec. 103. Definitions in Chapter _ The following definitions
apply to this Article and appear in this Chapter as follows:
"Amount financed" Section 2-111
"Annual percentage rate" Section 2-304 (2)
"Cash price" Section 2-110
"Consumer credit sale" Section 2-104
"Consumer lease" Section 2-106
"Consumer related sale" Section 2-602
"Corresponding nominal annual
percentage rate" Section 2-304 (3)
"Credit service charge" Section 2-109
"Goods" Section 2-105 (1)
"Home solicitation sale" Section 2-501
"Merchandise certificate" Section 2-105 (2)
"Precomputed" Section 2-105 (7)
"Revolving charge account" Section 2-108
"Sale of goods" Section 2-105 (4)
"Sale of an interest in land" Section 2-105 (6)
"Sale of services" Section 2-105 (5)
"Seller" Section 2-107
"Services" Section 2-105 (3)
(Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-104
Repealed
(Repealed by P.L.35-2010, SEC.209.) IC 24-4.5-2-105 "Goods"; "merchandise certificate"; "services"; "sale of goods";
"sale of services"; "sale of an interest in land"; "precomputed"
Sec. 105. Definitions: "Goods"; "Merchandise Certificate";
"Services"; "Sale of Goods"; "Sale of Services"; "Sale of an Interest
in Land"; "Precomputed".
(1) "Goods" includes goods not in existence at the time the
transaction is entered into and merchandise certificates, but excludes
money, chattel paper, documents of title, and instruments.
(2) "Merchandise certificate" means a writing issued by a seller
not redeemable in cash and usable in its face amount in lieu of cash
in exchange for goods or services.
(3) "Services" includes (a) work, labor, and other personal
services, (b) privileges with respect to transportation, hotel and
restaurant accommodations, education, entertainment, recreation,
physical culture, hospital accommodations, funerals, cemetery
accommodations, and the like, and (c) insurance provided by a
person other than the insurer.
(4) "Sale of goods" includes any agreement in the form of a
bailment or lease of goods if the bailee or lessee agrees to pay as
compensation for use a sum substantially equivalent to or in excess
of the aggregate value of the goods involved and it is agreed that the
bailee or lessee will become, or for no other or a nominal
consideration has the option to become, the owner of the goods upon
full compliance with his obligations under the agreement.
(5) "Sale of services" means furnishing or agreeing to furnish
services and includes making arrangements to have services
furnished by another.
(6) "Sale of an interest in land" includes a lease in which the
lessee has an option to purchase the interest and all or a substantial
part of the rental or other payments previously made by him are
applied to the purchase price.
(7) A sale, refinancing, or consolidation is "precomputed" if the
debt is expressed as a sum comprising the amount financed and the
amount of the credit service charge computed in advance. (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-106 "Consumer lease"
Sec. 106. (1) "Consumer lease" means a lease of goods:
(a) which a lessor regularly engaged in the business of leasing
makes to a person, other than an organization, who takes under
the lease primarily for a personal, family, or household purpose;
(b) in which the amount payable under the lease does not
exceed fifty thousand dollars ($50,000); and
(c) which is for a term exceeding four (4) months.
(2) "Consumer lease" does not include a lease made pursuant to
a lender credit card or similar arrangement. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by
P.L.247-1983, SEC.3; P.L.122-1994, SEC.9. IC 24-4.5-2-107 "Seller"
Sec. 107. Definition; "Seller" - Except as otherwise provided,
"seller" means a person regularly engaged as a creditor in making
consumer credit sales. The term includes an assignee of the seller's
right to payment but use of the term does not in itself impose on an
assignee any obligation of the seller with respect to events occurring
before the assignment. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by
P.L.145-2008, SEC.22.
IC 24-4.5-2-108 "Revolving charge account"
Sec. 108. Definition: "Revolving Charge Account" _ "Revolving
charge account" means an arrangement between a seller and a buyer
pursuant to which (1) the seller may permit the buyer to purchase
goods or services on credit either from the seller or pursuant to a
seller credit card, (2) the unpaid balances of amounts financed
arising from purchases and the credit service and other appropriate
charges are debited to an account, (3) a credit service charge if made
is not precomputed but is computed on the outstanding unpaid
balances of the buyer's account from time to time, and (4) the buyer
has the privilege of paying the balances in instalments. (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-109 "Credit service charge"
Sec. 109. "Credit service charge" means the sum of:
(1) all charges payable directly or indirectly by the buyer and
imposed directly or indirectly by the seller as an incident to the
extension of credit, including any of the following types of
charges which are applicable: time price differential, service,
carrying or other charge, however denominated, premium or
other charge for any guarantee or insurance protecting the seller
against the buyer's default or other credit loss; and
(2) charges incurred for investigating the collateral or
credit-worthiness of the buyer.
The term does not include charges as a result of default, additional
charges (IC 24-4.5-2-202), delinquency charges (IC 24-4.5-2-203.5),
or deferral charges (IC 24-4.5-2-204). The term does not include
charges paid or payable to a third party that are not required by the
seller as a condition or incident to the extension of credit except for
borrower paid mortgage broker fees, including fees paid directly to
the broker or the seller (for delivery to the broker), whether the fees
are paid in cash or financed. However, borrower paid mortgage
broker fees do not include fees paid to a mortgage broker by a
creditor, including yield spread premiums and service release fees. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by
P.L.247-1983, SEC.4; P.L.14-1992, SEC.13; P.L.2-1995, SEC.90;
P.L.172-1997, SEC.3. IC 24-4.5-2-110 "Cash price"
Sec. 110. Definition: "Cash Price" _ Except as the department
may prescribe by rule, the "cash price" of goods, services, or an
interest in land means the price at which the goods, services, or
interest in land are offered for sale by the seller to cash buyers in the
ordinary course of business, and may include (1) applicable sales,
use, and excise and documentary fees, (2) the cash price of
accessories or related services such as delivery, installation,
servicing, repairs, alterations, service contracts, and improvements,
and (3) amounts actually paid or to be paid by the seller for
registration, certificate of title, or license fees. The cash price stated
by the seller to the buyer pursuant to the provisions on disclosure
(Part 3) of this Chapter is presumed to be the cash price. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by P.L.14-1992,
SEC.14; P.L.122-1994, SEC.10.
IC 24-4.5-2-111 "Amount financed"
Sec. 111. Definition: "Amount Financed" _ "Amount financed"
means the total of the following to the extent that payment is
deferred:
(1) the cash price of the goods, services, or interest in land less the
amount of down payment whether made in cash or property;
(2) the amount actually paid or to be paid by the seller pursuant
to an agreement with the buyer to discharge a security interest or lien
on property traded in; and
(3) if not included in the cash price:
(a) any applicable sales, use, excise or documentary fees;
(b) amounts actually paid or to be paid by the seller for
registration, certificate of title, or license fees; and
(c) additional charges permitted by this Chapter (IC
24-4.5-2-202). (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by
P.L.122-1994, SEC.11.
(Part 2. Maximum Charges)
IC 24-4.5-2-201 Credit service charge for consumer credit sales other than
revolving charge accounts
Sec. 201. Credit Service Charge for Consumer Credit Sales other
than Revolving Charge Accounts _ (1) With respect to a consumer
credit sale, other than a sale pursuant to a revolving charge account,
a seller may contract for and receive a credit service charge not
exceeding that permitted by this section.
(2) The credit service charge, calculated according to the actuarial
method, may not exceed the equivalent of the greater of either of the
following:
(a) the total of:
(i) thirty-six percent (36%) per year on that part of the
unpaid balances of the amount financed which is three
hundred dollars ($300) or less;
(ii) twenty-one percent (21%) per year on that part of the
unpaid balances of the amount financed which is more than
three hundred dollars ($300) but does not exceed one
thousand dollars ($1,000); and
(iii) fifteen percent (15%) per year on that part of the unpaid
balances of the amount financed which is more than one
thousand dollars ($1,000); or
(b) twenty-one percent (21%) per year on the unpaid balances
of the amount financed.
(3) This section does not limit or restrict the manner of
contracting for the credit service charge, whether by way of add-on,
discount, or otherwise, so long as the rate of the credit service charge
does not exceed that permitted by this section. If the sale is
precomputed:
(a) the credit service charge may be calculated on the
assumption that all scheduled payments will be made when due;
and
(b) the effect of prepayment is governed by the provisions on
rebate upon prepayment (IC 24-4.5-2-210).
(4) For the purposes of this section, the term of a sale agreement
commences with the date the credit is granted or, if goods are
delivered or services performed more than thirty (30) days after that
date, with the date of commencement of delivery or performance
except as set forth below:
(a) Delays attributable to the customer. Where the customer
requests delivery after the thirty (30) day period or where
delivery occurs after the thirty (30) day period for a reason
attributable to the customer (including but not limited to failure
to close on a residence or failure to obtain lease approval), the
term of the sale agreement shall commence with the date credit
is granted.
(b) Partial Deliveries. Where any portion of the order has been
delivered within the thirty (30) day period, the term of the sale
agreement shall commence with the date credit is granted.
Differences in the lengths of months are disregarded and a day may
be counted as one-thirtieth (1/30) of a month. Subject to
classifications and differentiations the seller may reasonably
establish, a part of a month in excess of fifteen (15) days may be
treated as a full month if periods of fifteen (15) days or less are
disregarded and that procedure is not consistently used to obtain a
greater yield than would otherwise be permitted.
(5) Subject to classifications and differentiations the seller may
reasonably establish, the seller may make the same credit service
charge on all amounts financed within a specified range. A credit
service charge so made does not violate subsection (2) if:
(a) when applied to the median amount within each range, it
does not exceed the maximum permitted by subsection (2); and
(b) when applied to the lowest amount within each range, it
does not produce a rate of credit service charge exceeding the
rate calculated according to paragraph (a) by more than eight
percent (8%) of the rate calculated according to paragraph (a).
(6) Notwithstanding subsection (2), the seller may contract for
and receive a minimum credit service charge of not more than thirty
dollars ($30). The minimum credit service charge allowed under this
subsection may be imposed only if:
(a) the debtor prepays in full a consumer credit sale,
refinancing, or consolidation, regardless of whether the sale,
refinancing, or consolidation is precomputed;
(b) the sale, refinancing, or consolidation prepaid by the debtor
is subject to a credit service charge that:
(i) is contracted for by the parties; and
(ii) does not exceed the rate prescribed in subsection (2); and
(c) the credit service charge earned at the time of prepayment is
less than the minimum credit service charge contracted for
under this subsection.
(7) The amounts of three hundred dollars ($300) and one thousand
dollars ($1,000) in subsection (2) are subject to change pursuant to
the provisions on adjustment of dollar amounts (IC 24-4.5-1-106).
(8) The amount of thirty dollars ($30) in subsection (6) is subject
to change under the provisions on adjustment of dollar amounts (IC
24-4.5-1-106). However, notwithstanding IC 24-4.5-1-106(1), the
Reference Base Index to be used under this subsection is the Index
for October 1992. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by Acts 1981,
P.L.219, SEC.1; P.L.14-1992, SEC.15; P.L.79-1998, SEC.26;
P.L.80-1998, SEC.4; P.L.10-2006, SEC.4 and P.L.57-2006, SEC.4;
P.L.145-2008, SEC.23.
IC 24-4.5-2-202 Permitted additional charges
Sec. 202. (1) In addition to the credit service charge permitted by
IC 24-4.5-2-201 through IC 24-4.5-2-210, a seller may contract for
and receive any of the following additional charges in connection
with a consumer credit sale:
(a) Official fees and taxes.
(b) Charges for insurance as described in subsection (2).
(c) Notwithstanding provisions of the Federal Consumer Credit
Protection Act concerning disclosure, charges for other
benefits, including insurance, conferred on the buyer, if the
benefits are of value to the buyer and if the charges are
reasonable in relation to the benefits, and are excluded as
permissible additional charges from the credit service charge.
With respect to any additional charge not specifically provided
for in this section, to be a permitted charge under this
subsection the seller must submit a written explanation of the
charge to the department indicating how the charge would be
assessed and the value or benefit to the buyer. Supporting
documents may be required by the department. The department
shall determine whether the charge would be of benefit to the
buyer and is reasonable in relation to the benefits.
(d) A charge not to exceed twenty-five dollars ($25) for each
return by a bank or other depository institution of a dishonored
check, negotiable order of withdrawal, or share draft issued by
the debtor.
(e) Annual participation fees assessed in connection with a
revolving charge account. Annual participation fees must:
(i) be reasonable in amount;
(ii) bear a reasonable relationship to the seller's costs to
maintain and monitor the charge account; and
(iii) not be assessed for the purpose of circumvention or
evasion of this article, as determined by the department.
(2) An additional charge may be made for insurance written in
connection with the sale, other than insurance protecting the seller
against the buyer's default or other credit loss:
(a) with respect to insurance against loss of or damage to
property, or against liability, if the seller furnishes a clear and
specific statement in writing to the buyer, setting forth the cost
of the insurance if obtained from or through the seller and
stating that the buyer may choose the person, subject to the
seller's reasonable approval, through whom the insurance is to
be obtained; and
(b) with respect to consumer credit insurance providing life,
accident, unemployment or other loss of income, or health
coverage, if the insurance coverage is not a factor in the
approval by the seller of the extension of credit and is clearly
disclosed in writing to the buyer, and if, in order to obtain the
insurance in connection with the extension of credit, the buyer
gives specific, affirmative, written indication of the desire to do
so after written disclosure of the cost.
(3) With respect to a subordinate lien mortgage transaction, the
following closing costs, if the costs are bona fide, reasonable in
amount, and not for the purpose of circumvention or evasion of this
article:
(a) fees for title examination, abstract of title, title insurance,
property surveys, or similar purposes;
(b) fees for preparing deeds, mortgages, and reconveyance,
settlement, and similar documents;
(c) notary and credit report fees;
(d) amounts required to be paid into escrow or trustee accounts
if the amounts would not otherwise be included in the loan
finance charge; and
(e) appraisal fees. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by
P.L.247-1983, SEC.5; P.L.181-1991, SEC.1; P.L.14-1992, SEC.16;
P.L.122-1994, SEC.12; P.L.45-1995, SEC.4; P.L.80-1998, SEC.5;
P.L.213-2007, SEC.7; P.L.217-2007, SEC.6; P.L.35-2010, SEC.43. IC 24-4.5-2-203
Repealed
(Repealed by P.L.122-1994, SEC.122.)
IC 24-4.5-2-203.5 Delinquency charges
Sec. 203.5. Delinquency Charges _ (1) With respect to a
consumer credit sale, refinancing, or consolidation, the parties may
contract for a delinquency charge of not more than five dollars ($5)
on any installment or minimum payment due not paid in full within
ten (10) days after its scheduled due date.
(2) A delinquency charge under this section may be collected only
once on an installment however long it remains in default. A
delinquency charge on consumer credit sales made under a revolving
charge account may be applied each month that the payment is less
than the minimum required payment. A delinquency charge may be
collected any time after it accrues. No delinquency charge may be
collected if the installment has been deferred and a deferral charge
(IC 24-4.5-2-204) has been paid or incurred.
(3) A delinquency charge may not be collected on an installment
or payment due that is paid in full within ten (10) days after its
scheduled due date even though an earlier maturing installment,
minimum payment, or a delinquency charge on:
(a) an earlier installment; or
(b) payment due;
may not have been paid in full. For purposes of this subsection,
payments are applied first to current installments or payments due
and then to delinquent installments or payments due.
(4) If two (2) installments or parts of two (2) installments of a
precomputed consumer credit sale are in default for ten (10) days or
more, the creditor may elect to convert the consumer credit sale from
a precomputed consumer credit sale to a consumer credit sale in
which the credit service charge is based on unpaid balances. A
creditor that makes this election shall make a rebate under the
provisions on rebates upon prepayment under IC 24-4.5-2-210 as of
the maturity date of the first delinquent installment, and thereafter
may make a credit service charge as authorized by the provisions on
credit service charges for consumer credit sales under
IC 24-4.5-2-201. The amount of the rebate shall not be reduced by
the amount of any permitted minimum charge under IC 24-4.5-2-210.
Any deferral charges made on installments due at or after the
maturity date of the first delinquent installment shall be rebated, and
no further deferral charges shall be made.
(5) The amount of five dollars ($5) in subsection (1) is subject to
change under the section on adjustment of dollar amounts (IC
24-4.5-1-106).
(6) If the parties provide by contract for a delinquency charge that
is subject to change, the seller shall disclose in the contract that the
amount of the delinquency charge is subject to change as allowed by
IC 24-4.5-1-106.
As added by P.L.247-1983, SEC.6. Amended by P.L.181-1991,
SEC.2; P.L.115-1992, SEC.1; P.L.122-1994, SEC.13; P.L.45-1995,
SEC.5.
IC 24-4.5-2-204 Deferral charges
Sec. 204. Deferral Charges _ (1) With respect to a precomputed
consumer credit sale, refinancing, or consolidation, the parties before
or after default may agree in writing to a deferral of all or part of one
or more unpaid instalments, and the seller may make and collect a
charge not exceeding the rate previously stated to the buyer pursuant
to the provisions on disclosure (Part 3) applied to the amount or
amounts deferred for the period of deferral calculated without regard
to differences in lengths of months, but proportionately for a part of
a month, counting each day as one-thirtieth (1/30) of a month. A
deferral charge may be collected at the time it is assessed or at any
time thereafter.
(2) The seller, in addition to the deferral charge, may make
appropriate additional charges (24-4.5-2-202), and the amount of
these charges which is not paid in cash may be added to the amount
deferred for the purpose of calculating the deferral charge.
(3) The parties may agree in writing at the time of a precomputed
consumer credit sale, refinancing, or consolidation that if an
instalment is not paid within ten (10) days after its due date, the
seller may unilaterally grant a deferral and make charges as provided
in this section. No deferral charge may be made for a period after the
date that the seller elects to accelerate the maturity of the agreement.
(4) A delinquency charge made by the seller on an instalment may
not be retained if a deferral charge is made pursuant to this section
with respect to the period of delinquency. (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-205 Credit service charge on refinancing
Sec. 205. Credit Service Charge on Refinancing _ With respect
to a consumer credit sale, refinancing, or consolidation, the seller
may by agreement with the buyer refinance the unpaid balance and
may contract for and receive a credit service charge based on the
amount financed resulting from the refinancing at a rate not
exceeding that permitted by the provisions on credit service charge
for consumer credit sales (IC 24-4.5-2-201). For the purpose of
determining the credit service charge permitted, the amount financed
resulting from the refinancing comprises the following:
(1) If the transaction was not precomputed, the total of the unpaid
balance and accrued charges on the date of refinancing, or, if the
transaction was precomputed, the amount which the buyer would
have been required to pay upon prepayment pursuant to the
provisions on rebate upon prepayment (IC 24-4.5-2-210) on the date
of refinancing.
(2) Appropriate additional charges (IC 24-4.5-2-202), payment of
which is deferred. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by P.L.14-1992,
SEC.17.
IC 24-4.5-2-206 Credit service charge on consolidation
Sec. 206. Credit Service Charge on Consolidation _ If a buyer
owes an unpaid balance to a seller with respect to a consumer credit
sale, refinancing, or consolidation, and becomes obligated on another
consumer credit sale, refinancing, or consolidation with the same
seller, the parties may agree to a consolidation resulting in a single
schedule of payments pursuant to either of the following subsections:
(1) The parties may agree to refinance the unpaid balance with
respect to the previous sale pursuant to the provisions on refinancing
(24-4.5-2-205) and to consolidate the amount financed resulting from
the refinancing by adding it to the amount financed with respect to
the subsequent sale. The seller may contract for and receive a credit
service charge based on the aggregate amount financed resulting
from the consolidation at a rate not exceeding that permitted by the
provisions on credit service charge for consumer credit sales
(24-4.5-2-201).
(2) The parties may agree to consolidate by adding together the
unpaid balances with respect to the two sales. (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-207 Credit service charge for revolving charge accounts
Sec. 207. Credit Service Charge for Revolving Charge Accounts
_ (1) With respect to a consumer credit sale made pursuant to a
revolving charge account, the parties to the sale may contract for the
payment by the buyer of a credit service charge not exceeding that
permitted in this section.
(2) A charge may be made in each billing cycle which is a
percentage of an amount no greater than
(a) the average daily balance of the account,
(b) the unpaid balance of the account on the same day of the
billing cycle, or
(c) the median amount within a specified range within which
the average daily balance of the account or the unpaid balance
of the account on the same day of the billing cycle is included.
A charge may be made pursuant to this paragraph only if the
seller, subject to classification and differentiations he may
reasonably establish, makes the same charge on all balances
within the specified range and if the percentage when applied
to the median amount within the range does not produce a
charge exceeding the charge resulting from applying that
percentage to the lowest amount within the range by more than
eight percent (8%) of the charge on the median amount.
(3) If the billing cycle is monthly, the charge may not exceed one
and three-fourths percent (1 3/4%) of the amount pursuant to
subsection (2). If the billing cycle is not monthly, the maximum
charge is that percentage which bears the same relation to the
applicable monthly percentage as the number of days in the billing
cycle bears to thirty (30). For the purposes of this section, a variation
of not more than four (4) days from month to month is "the same day
of the billing cycle."
(4) Notwithstanding subsection (3), if there is an unpaid balance
on the date as of which the credit service charge is applied, the seller
may contract for and receive a charge not exceeding fifty cents
($.50), if the billing cycle is monthly or longer, or the pro rata part of
fifty cents ($.50) which bears the same relation to fifty cents ($.50)
as the number of days in the billing cycle bears to thirty (30) if the
billing cycle is shorter than monthly. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by Acts 1981,
P.L.219, SEC.2; Acts 1982, P.L.150, SEC.1.
IC 24-4.5-2-208 Advances to perform covenants of buyer
Sec. 208. Advances to Perform Covenants of Buyer _ (1) If the
agreement with respect to a consumer credit sale, refinancing, or
consolidation contains covenants by the buyer to perform certain
duties pertaining to insuring or preserving collateral and the seller
pursuant to the agreement pays for performance of the duties on
behalf of the buyer, the seller may add the amounts paid to the debt.
Within a reasonable time after advancing any sums, he shall state to
the buyer in writing the amount of the sums advanced, any charges
with respect to this amount, and any revised payment schedule and,
if the duties of the buyer performed by the seller pertain to insurance,
a brief description of the insurance paid for by the seller including
the type and amount of coverages. No further information need be
given.
(2) A credit service charge may be made for sums advanced
pursuant to subsection (1) at a rate not exceeding the rate stated to
the buyer pursuant to the provisions on disclosure (Part 3) with
respect to the sale, refinancing or consolidation, except that with
respect to a revolving charge account the amount of the advance may
be added to the unpaid balance of the account and the seller may
make a credit service charge not exceeding that permitted by the
provisions on credit service charge for revolving charge accounts
(24-4.5-2-207). (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-209 Right to prepay; payoff amount; liability for failure to provide;
short sale; acknowledgment of offer; acceptance or rejection;
acceptance of payment; liability for failure to respond
Sec. 209. (1) Subject to the provisions on rebate upon prepayment
(IC 24-4.5-2-210), the buyer may prepay in full the unpaid balance
of a consumer credit sale, refinancing, or consolidation at any time
without penalty.
(2) At the time of prepayment of a credit sale not subject to the
provisions of rebate upon prepayment (IC 24-4.5-2-210), the total
credit service charge, including the prepaid credit service charge,
may not exceed the maximum charge allowed under this chapter for
the period the credit sale was in effect.
(3) The creditor or mortgage servicer shall provide an accurate
payoff of the consumer credit sale to the debtor within ten (10)
calendar days after the creditor or mortgage servicer receives the
debtor's written request for the accurate consumer credit sale payoff
amount. A creditor or mortgage servicer who fails to provide the
accurate consumer credit sale payoff amount is liable for:
(A) one hundred dollars ($100) if an accurate consumer
credit sale payoff amount is not provided by the creditor or
mortgage servicer within ten (10) calendar days after the
creditor or mortgage servicer receives the debtor's first
written request; and
(B) the greater of:
(i) one hundred dollars ($100); or
(ii) the credit service charge that accrues on the sale from
the date the creditor or mortgage servicer receives the first
written request until the date on which the accurate
consumer credit sale payoff amount is provided;
if an accurate consumer credit sale payoff amount is not
provided by the creditor or mortgage servicer within ten (10)
calendar days after the creditor or mortgage servicer receives
the debtor's second written request, and the creditor or
mortgage servicer failed to comply with clause (A).
A liability under this subsection is an excess charge under
IC 24-4.5-5-202.
(4) As used in this subsection, "mortgage transaction" means a
consumer credit sale in which a mortgage, deed of trust, or a land
contract that constitutes a lien is created or retained against land
upon which there is a dwelling that is or will be used by the debtor
primarily for personal, family, or household purposes. This
subsection applies to a mortgage transaction with respect to which
any installment or minimum payment due is delinquent for at least
sixty (60) days. The creditor, servicer, or the creditor's agent shall
acknowledge a written offer made in connection with a proposed
short sale not later than ten (10) business days after the date of the
offer if the offer complies with the requirements for a qualified
written request set forth in 12 U.S.C. 2605(e)(1)(B). The creditor,
servicer, or creditor's agent is required to acknowledge a written
offer made in connection with a proposed short sale from a third
party acting on behalf of the debtor only if the debtor has provided
written authorization for the creditor, servicer, or creditor's agent to
do so. Not later than thirty (30) business days after receipt of an offer
under this subsection, the creditor, servicer, or creditor's agent shall
respond to the offer with an acceptance or a rejection of the offer.
Payment accepted by a creditor, servicer, or creditor's agent in
connection with a short sale constitutes payment in full satisfaction
of the mortgage transaction unless the creditor, servicer, or creditor's
agent obtains:
(a) the following statement: "The debtor remains liable for any
amount still owed under the mortgage transaction."; or
(b) a statement substantially similar to the statement set forth in
subdivision (a);
acknowledged by the initials or signature of the debtor, on or before
the date on which the short sale payment is accepted. As used in this
subsection, "short sale" means a transaction in which the property
that is the subject of a mortgage transaction is sold for an amount
that is less than the amount of the debtor's outstanding obligation
under the mortgage transaction. A creditor or mortgage servicer that
fails to respond to an offer within the time prescribed by this
subsection is liable in accordance with 12 U.S.C. 2605(f) in any
action brought under that section. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by P.L.23-2000,
SEC.5; P.L.63-2001, SEC.2 and P.L.134-2001, SEC.2;
P.L.145-2008, SEC.24; P.L.35-2010, SEC.44.
IC 24-4.5-2-210 Rebate upon prepayment
Sec. 210. Rebate upon Prepayment _ (1) Except as provided in
subsection (2), upon prepayment in full of the unpaid balance of a
precomputed consumer credit sale, refinancing, or consolidation, an
amount not less than the unearned portion of the credit service
charge calculated according to this section shall be rebated to the
buyer. If the rebate required is less than one dollar ($1), no rebate
need be made.
(2) Upon prepayment in full of a consumer credit sale,
refinancing, or consolidation, other than one pursuant to a revolving
charge account, if the credit service charge then earned is less than
any permitted minimum credit service charge (IC 24-4.5-2-201(6))
contracted for, whether or not the sale, refinancing, or consolidation
is precomputed, the seller may collect or retain the minimum charge,
as if earned, not exceeding the credit service charge contracted for.
(3) The unearned portion of the credit service charge is a fraction
of the credit service charge of which the numerator is the sum of the
periodic balances scheduled to follow the computational period in
which prepayment occurs, and the denominator is the sum of all
periodic balances under either the sale agreement or, if the balance
owing resulted from a refinancing (IC 24-4.5-2-205) or a
consolidation (IC 24-4.5-2-206), under the refinancing agreement or
consolidation agreement.
(4) In this section:
(a) "periodic balance" means the amount scheduled to be
outstanding on the last day of a computational period before
deducting the payment, if any, scheduled to be made on that
day;
(b) "computational period" means one (1) month if one-half
(1/2) or more of the intervals between scheduled payments
under the agreement is one (1) month or more, and otherwise
means one (1) week;
(c) the "interval" to the due date of the first scheduled
installment or the final scheduled payment date is measured
from the date of a sale, refinancing, or consolidation, or any
later date prescribed for calculating maximum credit service
charges (IC 24-4.5-2-201(4)) and includes either the first or last
day of the interval; and
(d) if the interval to the due date of the first scheduled
installment does not exceed one (1) month by more than fifteen
(15) days when the computational period is one (1) month, or
eleven (11) days when the computational period is one (1)
week, the interval shall be considered as one (1) computational
period.
(5) This subsection applies only if the schedule of payments is not
regular.
(a) If the computational period is one (1) month and:
(i) if the number of days in the interval to the due date of the
first scheduled installment is less than one (1) month by
more than five (5) days, or more than one (1) month by more
than five (5) but not more than fifteen (15) days, the
unearned credit service charge shall be increased by an
adjustment for each day by which the interval is less than
one (1) month and, at the option of the seller, may be
reduced by an adjustment for each day by which the interval
is more than one (1) month; the adjustment for each day
shall be one-thirtieth (1/30) of that part of the credit service
charge earned in the computational period prior to the due
date of the first scheduled installment assuming that period
to be one (1) month; and
(ii) if the interval to the final scheduled payment date is a
number of computational periods plus an additional number
of days less than a full month, the additional number of days
shall be considered a computational period only if sixteen
(16) days or more. This subparagraph applies whether or not
clause (i) applies.
(b) Notwithstanding paragraph (a), if the computational period
is one (1) month, the number of days in the interval to the due
date of the first installment exceeds one (1) month by not more
than fifteen (15) days, and the schedule of payments is
otherwise regular, the seller, at the seller's option, may exclude
the extra days and the charge for the extra days in computing
the unearned credit service charge; but if the seller does so and
a rebate is required before the due date of the first scheduled
installment, the seller shall compute the earned charge for each
elapsed day as one-thirtieth (1/30) of the amount the earned
charge would have been if the first interval had been one (1)
month.
(c) If the computational period is one (1) week and:
(i) if the number of days in the interval to the due date of this
first scheduled installment is less than five (5) days or more
than nine (9) days but not more than eleven (11) days, the
unearned credit service charge shall be increased by an
adjustment for each day by which the interval is less than
seven (7) days and, at the option of the seller, may be
reduced by an adjustment for each day by which the interval
is more than seven (7) days; the adjustment for each day
shall be one-seventh (1/7) of that part of the credit service
charge earned in the computational period prior to the due
date of the first scheduled installment assuming that period
to be one (1) week; and
(ii) if the interval to the final scheduled payment date is a
number of computational periods plus an additional number
of days less than a full week, the additional number of days
shall be considered a computational period only if five (5)
days or more. This subparagraph applies whether or not
subparagraph (i) applies.
(6) If a deferral (IC 24-4.5-2-204) has been agreed to, the
unearned portion of the credit service charge shall be computed
without regard to the deferral. The amount of deferral charge earned
at the date of prepayment shall also be calculated. If the deferral
charge earned is less than the deferral charge paid, the difference
shall be added to the unearned portion of the credit service charge.
If any part of a deferral charge has been earned but has not been paid,
that part shall be subtracted from the unearned portion of the credit
service charge or shall be added to the unpaid balance.
(7) This section does not preclude the collection or retention by
the seller of delinquency charges (IC 24-4.5-2-203, repealed in
1994).
(8) If the maturity is accelerated for any reason and judgment is
obtained, the buyer is entitled to the same rebate as if payment had
been made on the date judgment is entered.
(9) Upon prepayment in full of a consumer credit sale by the
proceeds of consumer credit insurance (IC 24-4.5-4-103), the buyer
or the buyer's estate shall pay the same credit service charge or
receive the same rebate as though the buyer had prepaid the
agreement on the date the proceeds of the insurance are paid to the
seller, but no later than ten (10) business days after satisfactory proof
of loss is furnished to the seller. This subsection applies whether or
not the credit sale is precomputed.
(10) Upon prepayment in full of a transaction with a term of more
than sixty-one (61) months, the unearned part of the credit service
charge shall be computed by applying the disclosed annual
percentage rate that would yield the credit service charge originally
contracted for to the unpaid balances of the amount financed for the
full computational periods following the prepayment, as originally
scheduled or as deferred. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by P.L.14-1992,
SEC.18; P.L.122-1994, SEC.14; P.L.2-1995, SEC.91; P.L.176-1996,
SEC.4.
(Part 3. Disclosure)
IC 24-4.5-2-301 Disclosures required by Federal Consumer Credit Protection Act
Sec. 301. (1) For purposes of this section, "consumer credit sale"
includes the sale of an interest in land which is a first lien mortgage
transaction if the sale is otherwise a consumer credit sale (IC
24-4.5-1-301.5(8)).
(2) The seller shall disclose to the buyer to whom credit is
extended with respect to a consumer credit sale, and the lessor shall
disclose to the lessee with respect to a consumer lease, the
information required by the Federal Consumer Credit Protection Act.
(3) For purposes of subsection (2), disclosures shall not be
required on a consumer credit sale if the transaction is exempt from
the Federal Consumer Credit Protection Act. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by Acts 1981,
P.L.218, SEC.4; P.L.247-1983, SEC.7; P.L.45-1995, SEC.6;
P.L.35-2010, SEC.45.
IC 24-4.5-2-302
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-303
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-304
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-305
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-306
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-307
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-308
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-309
Repealed
(Repealed by P.L.247-1983, SEC.26.) IC 24-4.5-2-310
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-311
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-312
Repealed
(Repealed by P.L.247-1983, SEC.26.)
(Part 4. Limitations on Agreements and Practices)
IC 24-4.5-2-401 Scope
Sec. 401. Scope _ This Part applies to consumer credit sales and
consumer leases. (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-402 Use of multiple agreements
Sec. 402. Use of Multiple Agreements _ A seller may not use
multiple agreements with intent to obtain a higher credit service
charge than would otherwise be permitted by this Article or to avoid
disclosure of an annual percentage rate pursuant to the provisions on
disclosure and advertising (Part 3). The excess amount of credit
service charge provided for in agreements in violation of this section
is an excess charge for the purposes of the provisions on the effect
of violations on rights of parties (IC 24-4.5-5-202) and the provisions
on civil actions by the department (IC 24-4.5-6-113). (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by P.L.14-1992,
SEC.19.
IC 24-4.5-2-403
Repealed
(Repealed by P.L.122-1994, SEC.122 and P.L.129-1994, SEC.3.)
IC 24-4.5-2-404
Repealed
(Repealed by P.L.45-1995, SEC.33.)
IC 24-4.5-2-405 Balloon payments
Sec. 405. (1) With respect to a consumer credit sale, other than
one pursuant to a revolving charge account or one on which only
credit service charges are payable before the time that the final
scheduled payment is due, if any scheduled payment is more than
twice as large as the average of earlier scheduled payments, the buyer
has the right to refinance the amount of that payment at the time it is
due without penalty. The terms of the refinancing shall be no less
favorable to the buyer than the terms of the original sale. This section
does not apply to the extent that the payment schedule is adjusted to
the seasonal or irregular income of the buyer.
(2) For the purposes of this section, "terms of the refinancing"
means:
(a) in the case of a fixed-rate consumer credit sale, the
individual payment amounts, the charges as a result of default
by the buyer, and the rate of the credit service charge; and
(b) in the case of a variable rate consumer credit sale, the
method used to determine the individual payment amounts, the
charges as a result of default by the buyer, the method used to
determine the rate of the credit service charge, the
circumstances under which the rate of the credit service charge
may increase, and any limitations on the increase in the rate of
the credit service charge. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by
P.L.247-1983, SEC.10.
IC 24-4.5-2-406 Restriction on liability in consumer lease
Sec. 406. The obligation of a lessee upon expiration of a
consumer lease may not exceed three (3) times the average payment
allocable to a monthly period under the lease. This limitation does
not apply to charges for damages to the leased property or for other
default. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by
P.L.247-1983, SEC.11; P.L.45-1995, SEC.7.
IC 24-4.5-2-407 Security interests
Sec. 407. (1) With respect to a consumer credit sale, a seller may
take a security interest in the property sold. In addition, a seller may
take a security interest in goods upon which services are performed
or in which goods sold are installed or to which they are annexed, or
in land to which the goods are affixed or which is maintained,
repaired or improved as a result of the sale of the goods or services,
if, in the case of a subordinate lien mortgage transaction, the debt
secured is one thousand dollars ($1,000) or more, or, in the case of
a security interest in goods the debt secured is three hundred dollars
($300) or more. Except as provided with respect to cross-collateral
(IC 24-4.5-2-408), a seller may not otherwise take a security interest
in property of the buyer to secure the debt arising from a consumer
credit sale.
(2) With respect to a consumer lease, a lessor may not take a
security interest in property of the lessee to secure the debt arising
from the lease.
(3) A security interest taken in violation of this section is void.
(4) The amounts of one thousand dollars ($1,000) and three
hundred dollars ($300) in subsection (1) are subject to change
pursuant to the provisions on adjustment of dollar amounts (IC
24-4.5-1-106). (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by
P.L.247-1983, SEC.12; P.L.35-2010, SEC.46.
IC 24-4.5-2-408 Cross-collateral
Sec. 408. Cross-Collateral _ (1) In addition to contracting for a
security interest pursuant to the provisions on security in sales or
leases (24-4.5-2-407), a seller in a consumer credit sale may secure
the debt arising from the sale by contracting for a security interest in
other property if as a result of a prior sale the seller has an existing
security interest in the other property. The seller may also contract
for a security interest in the property sold in the subsequent sale as
security for the previous debt.
(2) If the seller contracts for a security interest in other property
pursuant to this section, the rate of credit service charge thereafter on
the aggregate unpaid balances so secured may not exceed that
permitted if the balances so secured were consolidated pursuant to
the provisions on consolidation involving a refinancing (subsection
(1) of 24-4.5-2-206). The seller has a reasonable time after so
contracting to make any adjustments required by this section.
"Seller" in this section does not include an assignee not related to the
original seller. (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-409 Debt secured by cross-collateral
Sec. 409. (1) If debts arising from two (2) or more consumer
credit sales, other than sales pursuant to a revolving charge account,
are secured by cross-collateral (IC 24-4.5-2-408) or consolidated into
one (1) debt payable on a single schedule of payments, and the debt
is secured by security interests taken with respect to one (1) or more
of the sales, payments received by the seller after the taking of the
cross-collateral or the consolidation are deemed, for the purpose of
determining the amount of the debt secured by the various security
interests, to have been first applied to the payment of the debts
arising from the sales first made. To the extent debts are paid
according to this section, security interests in items of property
terminate as the debt originally incurred with respect to each item is
paid.
(2) Payments received by the seller upon a revolving charge
account are deemed, for the purpose of determining the amount of
the debt secured by the various security interests, to have been
applied first to the payment of credit service charges in the order of
their entry to the account and then to the payment of debts in the
order in which the entries to the account showing the debts were
made.
(3) If the debts consolidated arose from two (2) or more sales
made on the same day, payments received by the seller are deemed,
for the purpose of determining the amount of the debts secured by
the various security interests, to have been applied first to the
payment of the smallest debt. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by
P.L.247-1983, SEC.13.
IC 24-4.5-2-410 No assignment of earnings
Sec. 410. No Assignment of Earnings _ A seller or lessor may
not take an assignment of earnings of the buyer or lessee for payment
or as security for payment of a claim, whether arising out of a
consumer credit sale, consumer lease or otherwise. An assignment of
earnings in violation of this section is unenforceable by the assignees
of the earnings and revocable by the buyer or lessee. This section
does not prohibit an employee from authorizing deductions from his
earnings if the authorization is revocable and is otherwise permitted
by law. (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-411 Referral sales
Sec. 411. Referral Sales _ With respect to a consumer credit sale
or consumer lease the seller or lessor may not give or offer to give a
rebate or discount or otherwise pay or offer to pay value to the buyer
or lessee as an inducement for a sale or lease in consideration of his
giving to the seller or lessor the names of prospective purchasers or
lessees, or otherwise aiding the seller or lessor in making a sale or
lease to another person, if the earning of the rebate, discount or other
value is contingent upon the occurrence of an event subsequent to the
time the buyer or lessee agrees to buy or lease. If a buyer or lessee is
induced by a violation of this section to enter into a consumer credit
sale or consumer lease, the agreement is unenforceable by the seller
or lessor and the buyer or lessee, at his option, may rescind the
agreement or retain the goods delivered and the benefit of any
services performed, without any obligation to pay for them. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by Acts 1978,
P.L.127, SEC.1.
IC 24-4.5-2-412 Notice of assignment
Sec. 412. Notice of Assignment _ The buyer or lessee is
authorized to pay the original seller or lessor until the buyer or lessee
receives notification of assignment of the rights to payment pursuant
to a consumer credit sale or consumer lease and that payment is to be
made to the assignee. A notification which does not reasonably
identify the rights assigned is ineffective. If requested by the buyer
or lessee, the assignee must seasonably furnish reasonable proof that
the assignment has been made and unless he does so the buyer or
lessee may pay the seller or lessor. (Formerly: Acts 1971, P.L.366, SEC.3.) IC 24-4.5-2-413 Attorney's fees
Sec. 413. Attorney's Fees _ With respect to a consumer credit
sale or consumer lease the agreement may provide for the payment
by the buyer or lessee of reasonable attorney's fees and after default
and referral to an attorney not a salaried employee of the seller, or of
the lessor or his assignee. A provision in violation of this section is
unenforceable. (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-414 Limitation on default charges
Sec. 414. Limitation on Default Charges _ Except for reasonable
expenses incurred in realizing on a security interest, the agreement
with respect to a consumer credit sale may not provide for any
charges as a result of default by the buyer other than those authorized
by this Article. A provision in violation of this section is
unenforceable. (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-415 Authorization to confess judgment prohibited
Sec. 415. Authorization to Confess Judgment Prohibited - A buyer
or lessee may not authorize any person to confess judgment on a
claim arising out of a consumer credit sale or consumer lease. An
authorization in violation of this section is void. (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-416
Repealed
(Repealed by P.L.122-1994, SEC.122.)
(Part 5. Home Solicitation Sales)
IC 24-4.5-2-501 "Home solicitation sale"
Sec. 501. Definition: "Home Solicitation Sale" _ "Home
solicitation sale" means a consumer credit sale of goods, other than
farm equipment, or services in which:
(1) the seller or a person acting for him engages in a personal
solicitation of the sale, including a solicitation over the
telephone, at a residence of the buyer and the buyer's agreement
or offer to purchase is there given to the seller or a person
acting for him; or
(2) the seller or his agent, solicits a sale in a city or town in
which the seller does not have a permanent business
establishment, through mailings, advertisements, or telephone
calls, which require the buyer to meet the seller or his agent at
a place other than the seller's permanent business establishment.
It does not include a sale made pursuant to a preexisting revolving
charge account, or a sale made pursuant to prior negotiations
between the parties at a business establishment at a fixed location
where goods or services are offered or exhibited for sale. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by Acts 1979,
P.L.237, SEC.1.
IC 24-4.5-2-502 Buyer's right to cancel
Sec. 502. Buyer's Right to Cancel _ The requirements of 16 CFR
429 must be met in regard to the following provisions concerning
home solicitation sales:
(1) Period within which cancellation may be made by the buyer.
(2) Notice of cancellation.
(3) Form of cancellation.
(4) Form of agreement or offer to purchase.
(5) Statement of buyer's rights.
(6) Restoration of down payment.
(7) Retention of cancellation fee.
(8) Duty of buyer.
(9) Any other relevant requirements in 16 CFR 429. (Formerly: Acts 1971, P.L.
IC 24-4.5-2-101 Short title
Sec. 101. Short Title _ This Chapter shall be known and may be
cited as Uniform Consumer Credit Code - Credit Sales. (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-102 Application
Sec. 102. This chapter applies to consumer credit sales, including
home solicitation sales, and consumer leases. In addition,
IC 24-4.5-2-601 through IC 24-4.5-2-605 apply to consumer related
sales. Licensing under IC 24-4.5-3-502.1 applies to consumer credit
sales that are subordinate lien mortgage transactions. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by
P.L.152-1986, SEC.60; P.L.35-2010, SEC.42.
IC 24-4.5-2-103 Definitions in chapter
Sec. 103. Definitions in Chapter _ The following definitions
apply to this Article and appear in this Chapter as follows:
"Amount financed" Section 2-111
"Annual percentage rate" Section 2-304 (2)
"Cash price" Section 2-110
"Consumer credit sale" Section 2-104
"Consumer lease" Section 2-106
"Consumer related sale" Section 2-602
"Corresponding nominal annual
percentage rate" Section 2-304 (3)
"Credit service charge" Section 2-109
"Goods" Section 2-105 (1)
"Home solicitation sale" Section 2-501
"Merchandise certificate" Section 2-105 (2)
"Precomputed" Section 2-105 (7)
"Revolving charge account" Section 2-108
"Sale of goods" Section 2-105 (4)
"Sale of an interest in land" Section 2-105 (6)
"Sale of services" Section 2-105 (5)
"Seller" Section 2-107
"Services" Section 2-105 (3)
(Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-104
Repealed
(Repealed by P.L.35-2010, SEC.209.) IC 24-4.5-2-105 "Goods"; "merchandise certificate"; "services"; "sale of goods";
"sale of services"; "sale of an interest in land"; "precomputed"
Sec. 105. Definitions: "Goods"; "Merchandise Certificate";
"Services"; "Sale of Goods"; "Sale of Services"; "Sale of an Interest
in Land"; "Precomputed".
(1) "Goods" includes goods not in existence at the time the
transaction is entered into and merchandise certificates, but excludes
money, chattel paper, documents of title, and instruments.
(2) "Merchandise certificate" means a writing issued by a seller
not redeemable in cash and usable in its face amount in lieu of cash
in exchange for goods or services.
(3) "Services" includes (a) work, labor, and other personal
services, (b) privileges with respect to transportation, hotel and
restaurant accommodations, education, entertainment, recreation,
physical culture, hospital accommodations, funerals, cemetery
accommodations, and the like, and (c) insurance provided by a
person other than the insurer.
(4) "Sale of goods" includes any agreement in the form of a
bailment or lease of goods if the bailee or lessee agrees to pay as
compensation for use a sum substantially equivalent to or in excess
of the aggregate value of the goods involved and it is agreed that the
bailee or lessee will become, or for no other or a nominal
consideration has the option to become, the owner of the goods upon
full compliance with his obligations under the agreement.
(5) "Sale of services" means furnishing or agreeing to furnish
services and includes making arrangements to have services
furnished by another.
(6) "Sale of an interest in land" includes a lease in which the
lessee has an option to purchase the interest and all or a substantial
part of the rental or other payments previously made by him are
applied to the purchase price.
(7) A sale, refinancing, or consolidation is "precomputed" if the
debt is expressed as a sum comprising the amount financed and the
amount of the credit service charge computed in advance. (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-106 "Consumer lease"
Sec. 106. (1) "Consumer lease" means a lease of goods:
(a) which a lessor regularly engaged in the business of leasing
makes to a person, other than an organization, who takes under
the lease primarily for a personal, family, or household purpose;
(b) in which the amount payable under the lease does not
exceed fifty thousand dollars ($50,000); and
(c) which is for a term exceeding four (4) months.
(2) "Consumer lease" does not include a lease made pursuant to
a lender credit card or similar arrangement. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by
P.L.247-1983, SEC.3; P.L.122-1994, SEC.9. IC 24-4.5-2-107 "Seller"
Sec. 107. Definition; "Seller" - Except as otherwise provided,
"seller" means a person regularly engaged as a creditor in making
consumer credit sales. The term includes an assignee of the seller's
right to payment but use of the term does not in itself impose on an
assignee any obligation of the seller with respect to events occurring
before the assignment. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by
P.L.145-2008, SEC.22.
IC 24-4.5-2-108 "Revolving charge account"
Sec. 108. Definition: "Revolving Charge Account" _ "Revolving
charge account" means an arrangement between a seller and a buyer
pursuant to which (1) the seller may permit the buyer to purchase
goods or services on credit either from the seller or pursuant to a
seller credit card, (2) the unpaid balances of amounts financed
arising from purchases and the credit service and other appropriate
charges are debited to an account, (3) a credit service charge if made
is not precomputed but is computed on the outstanding unpaid
balances of the buyer's account from time to time, and (4) the buyer
has the privilege of paying the balances in instalments. (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-109 "Credit service charge"
Sec. 109. "Credit service charge" means the sum of:
(1) all charges payable directly or indirectly by the buyer and
imposed directly or indirectly by the seller as an incident to the
extension of credit, including any of the following types of
charges which are applicable: time price differential, service,
carrying or other charge, however denominated, premium or
other charge for any guarantee or insurance protecting the seller
against the buyer's default or other credit loss; and
(2) charges incurred for investigating the collateral or
credit-worthiness of the buyer.
The term does not include charges as a result of default, additional
charges (IC 24-4.5-2-202), delinquency charges (IC 24-4.5-2-203.5),
or deferral charges (IC 24-4.5-2-204). The term does not include
charges paid or payable to a third party that are not required by the
seller as a condition or incident to the extension of credit except for
borrower paid mortgage broker fees, including fees paid directly to
the broker or the seller (for delivery to the broker), whether the fees
are paid in cash or financed. However, borrower paid mortgage
broker fees do not include fees paid to a mortgage broker by a
creditor, including yield spread premiums and service release fees. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by
P.L.247-1983, SEC.4; P.L.14-1992, SEC.13; P.L.2-1995, SEC.90;
P.L.172-1997, SEC.3. IC 24-4.5-2-110 "Cash price"
Sec. 110. Definition: "Cash Price" _ Except as the department
may prescribe by rule, the "cash price" of goods, services, or an
interest in land means the price at which the goods, services, or
interest in land are offered for sale by the seller to cash buyers in the
ordinary course of business, and may include (1) applicable sales,
use, and excise and documentary fees, (2) the cash price of
accessories or related services such as delivery, installation,
servicing, repairs, alterations, service contracts, and improvements,
and (3) amounts actually paid or to be paid by the seller for
registration, certificate of title, or license fees. The cash price stated
by the seller to the buyer pursuant to the provisions on disclosure
(Part 3) of this Chapter is presumed to be the cash price. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by P.L.14-1992,
SEC.14; P.L.122-1994, SEC.10.
IC 24-4.5-2-111 "Amount financed"
Sec. 111. Definition: "Amount Financed" _ "Amount financed"
means the total of the following to the extent that payment is
deferred:
(1) the cash price of the goods, services, or interest in land less the
amount of down payment whether made in cash or property;
(2) the amount actually paid or to be paid by the seller pursuant
to an agreement with the buyer to discharge a security interest or lien
on property traded in; and
(3) if not included in the cash price:
(a) any applicable sales, use, excise or documentary fees;
(b) amounts actually paid or to be paid by the seller for
registration, certificate of title, or license fees; and
(c) additional charges permitted by this Chapter (IC
24-4.5-2-202). (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by
P.L.122-1994, SEC.11.
(Part 2. Maximum Charges)
IC 24-4.5-2-201 Credit service charge for consumer credit sales other than
revolving charge accounts
Sec. 201. Credit Service Charge for Consumer Credit Sales other
than Revolving Charge Accounts _ (1) With respect to a consumer
credit sale, other than a sale pursuant to a revolving charge account,
a seller may contract for and receive a credit service charge not
exceeding that permitted by this section.
(2) The credit service charge, calculated according to the actuarial
method, may not exceed the equivalent of the greater of either of the
following:
(a) the total of:
(i) thirty-six percent (36%) per year on that part of the
unpaid balances of the amount financed which is three
hundred dollars ($300) or less;
(ii) twenty-one percent (21%) per year on that part of the
unpaid balances of the amount financed which is more than
three hundred dollars ($300) but does not exceed one
thousand dollars ($1,000); and
(iii) fifteen percent (15%) per year on that part of the unpaid
balances of the amount financed which is more than one
thousand dollars ($1,000); or
(b) twenty-one percent (21%) per year on the unpaid balances
of the amount financed.
(3) This section does not limit or restrict the manner of
contracting for the credit service charge, whether by way of add-on,
discount, or otherwise, so long as the rate of the credit service charge
does not exceed that permitted by this section. If the sale is
precomputed:
(a) the credit service charge may be calculated on the
assumption that all scheduled payments will be made when due;
and
(b) the effect of prepayment is governed by the provisions on
rebate upon prepayment (IC 24-4.5-2-210).
(4) For the purposes of this section, the term of a sale agreement
commences with the date the credit is granted or, if goods are
delivered or services performed more than thirty (30) days after that
date, with the date of commencement of delivery or performance
except as set forth below:
(a) Delays attributable to the customer. Where the customer
requests delivery after the thirty (30) day period or where
delivery occurs after the thirty (30) day period for a reason
attributable to the customer (including but not limited to failure
to close on a residence or failure to obtain lease approval), the
term of the sale agreement shall commence with the date credit
is granted.
(b) Partial Deliveries. Where any portion of the order has been
delivered within the thirty (30) day period, the term of the sale
agreement shall commence with the date credit is granted.
Differences in the lengths of months are disregarded and a day may
be counted as one-thirtieth (1/30) of a month. Subject to
classifications and differentiations the seller may reasonably
establish, a part of a month in excess of fifteen (15) days may be
treated as a full month if periods of fifteen (15) days or less are
disregarded and that procedure is not consistently used to obtain a
greater yield than would otherwise be permitted.
(5) Subject to classifications and differentiations the seller may
reasonably establish, the seller may make the same credit service
charge on all amounts financed within a specified range. A credit
service charge so made does not violate subsection (2) if:
(a) when applied to the median amount within each range, it
does not exceed the maximum permitted by subsection (2); and
(b) when applied to the lowest amount within each range, it
does not produce a rate of credit service charge exceeding the
rate calculated according to paragraph (a) by more than eight
percent (8%) of the rate calculated according to paragraph (a).
(6) Notwithstanding subsection (2), the seller may contract for
and receive a minimum credit service charge of not more than thirty
dollars ($30). The minimum credit service charge allowed under this
subsection may be imposed only if:
(a) the debtor prepays in full a consumer credit sale,
refinancing, or consolidation, regardless of whether the sale,
refinancing, or consolidation is precomputed;
(b) the sale, refinancing, or consolidation prepaid by the debtor
is subject to a credit service charge that:
(i) is contracted for by the parties; and
(ii) does not exceed the rate prescribed in subsection (2); and
(c) the credit service charge earned at the time of prepayment is
less than the minimum credit service charge contracted for
under this subsection.
(7) The amounts of three hundred dollars ($300) and one thousand
dollars ($1,000) in subsection (2) are subject to change pursuant to
the provisions on adjustment of dollar amounts (IC 24-4.5-1-106).
(8) The amount of thirty dollars ($30) in subsection (6) is subject
to change under the provisions on adjustment of dollar amounts (IC
24-4.5-1-106). However, notwithstanding IC 24-4.5-1-106(1), the
Reference Base Index to be used under this subsection is the Index
for October 1992. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by Acts 1981,
P.L.219, SEC.1; P.L.14-1992, SEC.15; P.L.79-1998, SEC.26;
P.L.80-1998, SEC.4; P.L.10-2006, SEC.4 and P.L.57-2006, SEC.4;
P.L.145-2008, SEC.23.
IC 24-4.5-2-202 Permitted additional charges
Sec. 202. (1) In addition to the credit service charge permitted by
IC 24-4.5-2-201 through IC 24-4.5-2-210, a seller may contract for
and receive any of the following additional charges in connection
with a consumer credit sale:
(a) Official fees and taxes.
(b) Charges for insurance as described in subsection (2).
(c) Notwithstanding provisions of the Federal Consumer Credit
Protection Act concerning disclosure, charges for other
benefits, including insurance, conferred on the buyer, if the
benefits are of value to the buyer and if the charges are
reasonable in relation to the benefits, and are excluded as
permissible additional charges from the credit service charge.
With respect to any additional charge not specifically provided
for in this section, to be a permitted charge under this
subsection the seller must submit a written explanation of the
charge to the department indicating how the charge would be
assessed and the value or benefit to the buyer. Supporting
documents may be required by the department. The department
shall determine whether the charge would be of benefit to the
buyer and is reasonable in relation to the benefits.
(d) A charge not to exceed twenty-five dollars ($25) for each
return by a bank or other depository institution of a dishonored
check, negotiable order of withdrawal, or share draft issued by
the debtor.
(e) Annual participation fees assessed in connection with a
revolving charge account. Annual participation fees must:
(i) be reasonable in amount;
(ii) bear a reasonable relationship to the seller's costs to
maintain and monitor the charge account; and
(iii) not be assessed for the purpose of circumvention or
evasion of this article, as determined by the department.
(2) An additional charge may be made for insurance written in
connection with the sale, other than insurance protecting the seller
against the buyer's default or other credit loss:
(a) with respect to insurance against loss of or damage to
property, or against liability, if the seller furnishes a clear and
specific statement in writing to the buyer, setting forth the cost
of the insurance if obtained from or through the seller and
stating that the buyer may choose the person, subject to the
seller's reasonable approval, through whom the insurance is to
be obtained; and
(b) with respect to consumer credit insurance providing life,
accident, unemployment or other loss of income, or health
coverage, if the insurance coverage is not a factor in the
approval by the seller of the extension of credit and is clearly
disclosed in writing to the buyer, and if, in order to obtain the
insurance in connection with the extension of credit, the buyer
gives specific, affirmative, written indication of the desire to do
so after written disclosure of the cost.
(3) With respect to a subordinate lien mortgage transaction, the
following closing costs, if the costs are bona fide, reasonable in
amount, and not for the purpose of circumvention or evasion of this
article:
(a) fees for title examination, abstract of title, title insurance,
property surveys, or similar purposes;
(b) fees for preparing deeds, mortgages, and reconveyance,
settlement, and similar documents;
(c) notary and credit report fees;
(d) amounts required to be paid into escrow or trustee accounts
if the amounts would not otherwise be included in the loan
finance charge; and
(e) appraisal fees. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by
P.L.247-1983, SEC.5; P.L.181-1991, SEC.1; P.L.14-1992, SEC.16;
P.L.122-1994, SEC.12; P.L.45-1995, SEC.4; P.L.80-1998, SEC.5;
P.L.213-2007, SEC.7; P.L.217-2007, SEC.6; P.L.35-2010, SEC.43. IC 24-4.5-2-203
Repealed
(Repealed by P.L.122-1994, SEC.122.)
IC 24-4.5-2-203.5 Delinquency charges
Sec. 203.5. Delinquency Charges _ (1) With respect to a
consumer credit sale, refinancing, or consolidation, the parties may
contract for a delinquency charge of not more than five dollars ($5)
on any installment or minimum payment due not paid in full within
ten (10) days after its scheduled due date.
(2) A delinquency charge under this section may be collected only
once on an installment however long it remains in default. A
delinquency charge on consumer credit sales made under a revolving
charge account may be applied each month that the payment is less
than the minimum required payment. A delinquency charge may be
collected any time after it accrues. No delinquency charge may be
collected if the installment has been deferred and a deferral charge
(IC 24-4.5-2-204) has been paid or incurred.
(3) A delinquency charge may not be collected on an installment
or payment due that is paid in full within ten (10) days after its
scheduled due date even though an earlier maturing installment,
minimum payment, or a delinquency charge on:
(a) an earlier installment; or
(b) payment due;
may not have been paid in full. For purposes of this subsection,
payments are applied first to current installments or payments due
and then to delinquent installments or payments due.
(4) If two (2) installments or parts of two (2) installments of a
precomputed consumer credit sale are in default for ten (10) days or
more, the creditor may elect to convert the consumer credit sale from
a precomputed consumer credit sale to a consumer credit sale in
which the credit service charge is based on unpaid balances. A
creditor that makes this election shall make a rebate under the
provisions on rebates upon prepayment under IC 24-4.5-2-210 as of
the maturity date of the first delinquent installment, and thereafter
may make a credit service charge as authorized by the provisions on
credit service charges for consumer credit sales under
IC 24-4.5-2-201. The amount of the rebate shall not be reduced by
the amount of any permitted minimum charge under IC 24-4.5-2-210.
Any deferral charges made on installments due at or after the
maturity date of the first delinquent installment shall be rebated, and
no further deferral charges shall be made.
(5) The amount of five dollars ($5) in subsection (1) is subject to
change under the section on adjustment of dollar amounts (IC
24-4.5-1-106).
(6) If the parties provide by contract for a delinquency charge that
is subject to change, the seller shall disclose in the contract that the
amount of the delinquency charge is subject to change as allowed by
IC 24-4.5-1-106.
As added by P.L.247-1983, SEC.6. Amended by P.L.181-1991,
SEC.2; P.L.115-1992, SEC.1; P.L.122-1994, SEC.13; P.L.45-1995,
SEC.5.
IC 24-4.5-2-204 Deferral charges
Sec. 204. Deferral Charges _ (1) With respect to a precomputed
consumer credit sale, refinancing, or consolidation, the parties before
or after default may agree in writing to a deferral of all or part of one
or more unpaid instalments, and the seller may make and collect a
charge not exceeding the rate previously stated to the buyer pursuant
to the provisions on disclosure (Part 3) applied to the amount or
amounts deferred for the period of deferral calculated without regard
to differences in lengths of months, but proportionately for a part of
a month, counting each day as one-thirtieth (1/30) of a month. A
deferral charge may be collected at the time it is assessed or at any
time thereafter.
(2) The seller, in addition to the deferral charge, may make
appropriate additional charges (24-4.5-2-202), and the amount of
these charges which is not paid in cash may be added to the amount
deferred for the purpose of calculating the deferral charge.
(3) The parties may agree in writing at the time of a precomputed
consumer credit sale, refinancing, or consolidation that if an
instalment is not paid within ten (10) days after its due date, the
seller may unilaterally grant a deferral and make charges as provided
in this section. No deferral charge may be made for a period after the
date that the seller elects to accelerate the maturity of the agreement.
(4) A delinquency charge made by the seller on an instalment may
not be retained if a deferral charge is made pursuant to this section
with respect to the period of delinquency. (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-205 Credit service charge on refinancing
Sec. 205. Credit Service Charge on Refinancing _ With respect
to a consumer credit sale, refinancing, or consolidation, the seller
may by agreement with the buyer refinance the unpaid balance and
may contract for and receive a credit service charge based on the
amount financed resulting from the refinancing at a rate not
exceeding that permitted by the provisions on credit service charge
for consumer credit sales (IC 24-4.5-2-201). For the purpose of
determining the credit service charge permitted, the amount financed
resulting from the refinancing comprises the following:
(1) If the transaction was not precomputed, the total of the unpaid
balance and accrued charges on the date of refinancing, or, if the
transaction was precomputed, the amount which the buyer would
have been required to pay upon prepayment pursuant to the
provisions on rebate upon prepayment (IC 24-4.5-2-210) on the date
of refinancing.
(2) Appropriate additional charges (IC 24-4.5-2-202), payment of
which is deferred. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by P.L.14-1992,
SEC.17.
IC 24-4.5-2-206 Credit service charge on consolidation
Sec. 206. Credit Service Charge on Consolidation _ If a buyer
owes an unpaid balance to a seller with respect to a consumer credit
sale, refinancing, or consolidation, and becomes obligated on another
consumer credit sale, refinancing, or consolidation with the same
seller, the parties may agree to a consolidation resulting in a single
schedule of payments pursuant to either of the following subsections:
(1) The parties may agree to refinance the unpaid balance with
respect to the previous sale pursuant to the provisions on refinancing
(24-4.5-2-205) and to consolidate the amount financed resulting from
the refinancing by adding it to the amount financed with respect to
the subsequent sale. The seller may contract for and receive a credit
service charge based on the aggregate amount financed resulting
from the consolidation at a rate not exceeding that permitted by the
provisions on credit service charge for consumer credit sales
(24-4.5-2-201).
(2) The parties may agree to consolidate by adding together the
unpaid balances with respect to the two sales. (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-207 Credit service charge for revolving charge accounts
Sec. 207. Credit Service Charge for Revolving Charge Accounts
_ (1) With respect to a consumer credit sale made pursuant to a
revolving charge account, the parties to the sale may contract for the
payment by the buyer of a credit service charge not exceeding that
permitted in this section.
(2) A charge may be made in each billing cycle which is a
percentage of an amount no greater than
(a) the average daily balance of the account,
(b) the unpaid balance of the account on the same day of the
billing cycle, or
(c) the median amount within a specified range within which
the average daily balance of the account or the unpaid balance
of the account on the same day of the billing cycle is included.
A charge may be made pursuant to this paragraph only if the
seller, subject to classification and differentiations he may
reasonably establish, makes the same charge on all balances
within the specified range and if the percentage when applied
to the median amount within the range does not produce a
charge exceeding the charge resulting from applying that
percentage to the lowest amount within the range by more than
eight percent (8%) of the charge on the median amount.
(3) If the billing cycle is monthly, the charge may not exceed one
and three-fourths percent (1 3/4%) of the amount pursuant to
subsection (2). If the billing cycle is not monthly, the maximum
charge is that percentage which bears the same relation to the
applicable monthly percentage as the number of days in the billing
cycle bears to thirty (30). For the purposes of this section, a variation
of not more than four (4) days from month to month is "the same day
of the billing cycle."
(4) Notwithstanding subsection (3), if there is an unpaid balance
on the date as of which the credit service charge is applied, the seller
may contract for and receive a charge not exceeding fifty cents
($.50), if the billing cycle is monthly or longer, or the pro rata part of
fifty cents ($.50) which bears the same relation to fifty cents ($.50)
as the number of days in the billing cycle bears to thirty (30) if the
billing cycle is shorter than monthly. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by Acts 1981,
P.L.219, SEC.2; Acts 1982, P.L.150, SEC.1.
IC 24-4.5-2-208 Advances to perform covenants of buyer
Sec. 208. Advances to Perform Covenants of Buyer _ (1) If the
agreement with respect to a consumer credit sale, refinancing, or
consolidation contains covenants by the buyer to perform certain
duties pertaining to insuring or preserving collateral and the seller
pursuant to the agreement pays for performance of the duties on
behalf of the buyer, the seller may add the amounts paid to the debt.
Within a reasonable time after advancing any sums, he shall state to
the buyer in writing the amount of the sums advanced, any charges
with respect to this amount, and any revised payment schedule and,
if the duties of the buyer performed by the seller pertain to insurance,
a brief description of the insurance paid for by the seller including
the type and amount of coverages. No further information need be
given.
(2) A credit service charge may be made for sums advanced
pursuant to subsection (1) at a rate not exceeding the rate stated to
the buyer pursuant to the provisions on disclosure (Part 3) with
respect to the sale, refinancing or consolidation, except that with
respect to a revolving charge account the amount of the advance may
be added to the unpaid balance of the account and the seller may
make a credit service charge not exceeding that permitted by the
provisions on credit service charge for revolving charge accounts
(24-4.5-2-207). (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-209 Right to prepay; payoff amount; liability for failure to provide;
short sale; acknowledgment of offer; acceptance or rejection;
acceptance of payment; liability for failure to respond
Sec. 209. (1) Subject to the provisions on rebate upon prepayment
(IC 24-4.5-2-210), the buyer may prepay in full the unpaid balance
of a consumer credit sale, refinancing, or consolidation at any time
without penalty.
(2) At the time of prepayment of a credit sale not subject to the
provisions of rebate upon prepayment (IC 24-4.5-2-210), the total
credit service charge, including the prepaid credit service charge,
may not exceed the maximum charge allowed under this chapter for
the period the credit sale was in effect.
(3) The creditor or mortgage servicer shall provide an accurate
payoff of the consumer credit sale to the debtor within ten (10)
calendar days after the creditor or mortgage servicer receives the
debtor's written request for the accurate consumer credit sale payoff
amount. A creditor or mortgage servicer who fails to provide the
accurate consumer credit sale payoff amount is liable for:
(A) one hundred dollars ($100) if an accurate consumer
credit sale payoff amount is not provided by the creditor or
mortgage servicer within ten (10) calendar days after the
creditor or mortgage servicer receives the debtor's first
written request; and
(B) the greater of:
(i) one hundred dollars ($100); or
(ii) the credit service charge that accrues on the sale from
the date the creditor or mortgage servicer receives the first
written request until the date on which the accurate
consumer credit sale payoff amount is provided;
if an accurate consumer credit sale payoff amount is not
provided by the creditor or mortgage servicer within ten (10)
calendar days after the creditor or mortgage servicer receives
the debtor's second written request, and the creditor or
mortgage servicer failed to comply with clause (A).
A liability under this subsection is an excess charge under
IC 24-4.5-5-202.
(4) As used in this subsection, "mortgage transaction" means a
consumer credit sale in which a mortgage, deed of trust, or a land
contract that constitutes a lien is created or retained against land
upon which there is a dwelling that is or will be used by the debtor
primarily for personal, family, or household purposes. This
subsection applies to a mortgage transaction with respect to which
any installment or minimum payment due is delinquent for at least
sixty (60) days. The creditor, servicer, or the creditor's agent shall
acknowledge a written offer made in connection with a proposed
short sale not later than ten (10) business days after the date of the
offer if the offer complies with the requirements for a qualified
written request set forth in 12 U.S.C. 2605(e)(1)(B). The creditor,
servicer, or creditor's agent is required to acknowledge a written
offer made in connection with a proposed short sale from a third
party acting on behalf of the debtor only if the debtor has provided
written authorization for the creditor, servicer, or creditor's agent to
do so. Not later than thirty (30) business days after receipt of an offer
under this subsection, the creditor, servicer, or creditor's agent shall
respond to the offer with an acceptance or a rejection of the offer.
Payment accepted by a creditor, servicer, or creditor's agent in
connection with a short sale constitutes payment in full satisfaction
of the mortgage transaction unless the creditor, servicer, or creditor's
agent obtains:
(a) the following statement: "The debtor remains liable for any
amount still owed under the mortgage transaction."; or
(b) a statement substantially similar to the statement set forth in
subdivision (a);
acknowledged by the initials or signature of the debtor, on or before
the date on which the short sale payment is accepted. As used in this
subsection, "short sale" means a transaction in which the property
that is the subject of a mortgage transaction is sold for an amount
that is less than the amount of the debtor's outstanding obligation
under the mortgage transaction. A creditor or mortgage servicer that
fails to respond to an offer within the time prescribed by this
subsection is liable in accordance with 12 U.S.C. 2605(f) in any
action brought under that section. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by P.L.23-2000,
SEC.5; P.L.63-2001, SEC.2 and P.L.134-2001, SEC.2;
P.L.145-2008, SEC.24; P.L.35-2010, SEC.44.
IC 24-4.5-2-210 Rebate upon prepayment
Sec. 210. Rebate upon Prepayment _ (1) Except as provided in
subsection (2), upon prepayment in full of the unpaid balance of a
precomputed consumer credit sale, refinancing, or consolidation, an
amount not less than the unearned portion of the credit service
charge calculated according to this section shall be rebated to the
buyer. If the rebate required is less than one dollar ($1), no rebate
need be made.
(2) Upon prepayment in full of a consumer credit sale,
refinancing, or consolidation, other than one pursuant to a revolving
charge account, if the credit service charge then earned is less than
any permitted minimum credit service charge (IC 24-4.5-2-201(6))
contracted for, whether or not the sale, refinancing, or consolidation
is precomputed, the seller may collect or retain the minimum charge,
as if earned, not exceeding the credit service charge contracted for.
(3) The unearned portion of the credit service charge is a fraction
of the credit service charge of which the numerator is the sum of the
periodic balances scheduled to follow the computational period in
which prepayment occurs, and the denominator is the sum of all
periodic balances under either the sale agreement or, if the balance
owing resulted from a refinancing (IC 24-4.5-2-205) or a
consolidation (IC 24-4.5-2-206), under the refinancing agreement or
consolidation agreement.
(4) In this section:
(a) "periodic balance" means the amount scheduled to be
outstanding on the last day of a computational period before
deducting the payment, if any, scheduled to be made on that
day;
(b) "computational period" means one (1) month if one-half
(1/2) or more of the intervals between scheduled payments
under the agreement is one (1) month or more, and otherwise
means one (1) week;
(c) the "interval" to the due date of the first scheduled
installment or the final scheduled payment date is measured
from the date of a sale, refinancing, or consolidation, or any
later date prescribed for calculating maximum credit service
charges (IC 24-4.5-2-201(4)) and includes either the first or last
day of the interval; and
(d) if the interval to the due date of the first scheduled
installment does not exceed one (1) month by more than fifteen
(15) days when the computational period is one (1) month, or
eleven (11) days when the computational period is one (1)
week, the interval shall be considered as one (1) computational
period.
(5) This subsection applies only if the schedule of payments is not
regular.
(a) If the computational period is one (1) month and:
(i) if the number of days in the interval to the due date of the
first scheduled installment is less than one (1) month by
more than five (5) days, or more than one (1) month by more
than five (5) but not more than fifteen (15) days, the
unearned credit service charge shall be increased by an
adjustment for each day by which the interval is less than
one (1) month and, at the option of the seller, may be
reduced by an adjustment for each day by which the interval
is more than one (1) month; the adjustment for each day
shall be one-thirtieth (1/30) of that part of the credit service
charge earned in the computational period prior to the due
date of the first scheduled installment assuming that period
to be one (1) month; and
(ii) if the interval to the final scheduled payment date is a
number of computational periods plus an additional number
of days less than a full month, the additional number of days
shall be considered a computational period only if sixteen
(16) days or more. This subparagraph applies whether or not
clause (i) applies.
(b) Notwithstanding paragraph (a), if the computational period
is one (1) month, the number of days in the interval to the due
date of the first installment exceeds one (1) month by not more
than fifteen (15) days, and the schedule of payments is
otherwise regular, the seller, at the seller's option, may exclude
the extra days and the charge for the extra days in computing
the unearned credit service charge; but if the seller does so and
a rebate is required before the due date of the first scheduled
installment, the seller shall compute the earned charge for each
elapsed day as one-thirtieth (1/30) of the amount the earned
charge would have been if the first interval had been one (1)
month.
(c) If the computational period is one (1) week and:
(i) if the number of days in the interval to the due date of this
first scheduled installment is less than five (5) days or more
than nine (9) days but not more than eleven (11) days, the
unearned credit service charge shall be increased by an
adjustment for each day by which the interval is less than
seven (7) days and, at the option of the seller, may be
reduced by an adjustment for each day by which the interval
is more than seven (7) days; the adjustment for each day
shall be one-seventh (1/7) of that part of the credit service
charge earned in the computational period prior to the due
date of the first scheduled installment assuming that period
to be one (1) week; and
(ii) if the interval to the final scheduled payment date is a
number of computational periods plus an additional number
of days less than a full week, the additional number of days
shall be considered a computational period only if five (5)
days or more. This subparagraph applies whether or not
subparagraph (i) applies.
(6) If a deferral (IC 24-4.5-2-204) has been agreed to, the
unearned portion of the credit service charge shall be computed
without regard to the deferral. The amount of deferral charge earned
at the date of prepayment shall also be calculated. If the deferral
charge earned is less than the deferral charge paid, the difference
shall be added to the unearned portion of the credit service charge.
If any part of a deferral charge has been earned but has not been paid,
that part shall be subtracted from the unearned portion of the credit
service charge or shall be added to the unpaid balance.
(7) This section does not preclude the collection or retention by
the seller of delinquency charges (IC 24-4.5-2-203, repealed in
1994).
(8) If the maturity is accelerated for any reason and judgment is
obtained, the buyer is entitled to the same rebate as if payment had
been made on the date judgment is entered.
(9) Upon prepayment in full of a consumer credit sale by the
proceeds of consumer credit insurance (IC 24-4.5-4-103), the buyer
or the buyer's estate shall pay the same credit service charge or
receive the same rebate as though the buyer had prepaid the
agreement on the date the proceeds of the insurance are paid to the
seller, but no later than ten (10) business days after satisfactory proof
of loss is furnished to the seller. This subsection applies whether or
not the credit sale is precomputed.
(10) Upon prepayment in full of a transaction with a term of more
than sixty-one (61) months, the unearned part of the credit service
charge shall be computed by applying the disclosed annual
percentage rate that would yield the credit service charge originally
contracted for to the unpaid balances of the amount financed for the
full computational periods following the prepayment, as originally
scheduled or as deferred. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by P.L.14-1992,
SEC.18; P.L.122-1994, SEC.14; P.L.2-1995, SEC.91; P.L.176-1996,
SEC.4.
(Part 3. Disclosure)
IC 24-4.5-2-301 Disclosures required by Federal Consumer Credit Protection Act
Sec. 301. (1) For purposes of this section, "consumer credit sale"
includes the sale of an interest in land which is a first lien mortgage
transaction if the sale is otherwise a consumer credit sale (IC
24-4.5-1-301.5(8)).
(2) The seller shall disclose to the buyer to whom credit is
extended with respect to a consumer credit sale, and the lessor shall
disclose to the lessee with respect to a consumer lease, the
information required by the Federal Consumer Credit Protection Act.
(3) For purposes of subsection (2), disclosures shall not be
required on a consumer credit sale if the transaction is exempt from
the Federal Consumer Credit Protection Act. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by Acts 1981,
P.L.218, SEC.4; P.L.247-1983, SEC.7; P.L.45-1995, SEC.6;
P.L.35-2010, SEC.45.
IC 24-4.5-2-302
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-303
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-304
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-305
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-306
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-307
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-308
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-309
Repealed
(Repealed by P.L.247-1983, SEC.26.) IC 24-4.5-2-310
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-311
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-312
Repealed
(Repealed by P.L.247-1983, SEC.26.)
(Part 4. Limitations on Agreements and Practices)
IC 24-4.5-2-401 Scope
Sec. 401. Scope _ This Part applies to consumer credit sales and
consumer leases. (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-402 Use of multiple agreements
Sec. 402. Use of Multiple Agreements _ A seller may not use
multiple agreements with intent to obtain a higher credit service
charge than would otherwise be permitted by this Article or to avoid
disclosure of an annual percentage rate pursuant to the provisions on
disclosure and advertising (Part 3). The excess amount of credit
service charge provided for in agreements in violation of this section
is an excess charge for the purposes of the provisions on the effect
of violations on rights of parties (IC 24-4.5-5-202) and the provisions
on civil actions by the department (IC 24-4.5-6-113). (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by P.L.14-1992,
SEC.19.
IC 24-4.5-2-403
Repealed
(Repealed by P.L.122-1994, SEC.122 and P.L.129-1994, SEC.3.)
IC 24-4.5-2-404
Repealed
(Repealed by P.L.45-1995, SEC.33.)
IC 24-4.5-2-405 Balloon payments
Sec. 405. (1) With respect to a consumer credit sale, other than
one pursuant to a revolving charge account or one on which only
credit service charges are payable before the time that the final
scheduled payment is due, if any scheduled payment is more than
twice as large as the average of earlier scheduled payments, the buyer
has the right to refinance the amount of that payment at the time it is
due without penalty. The terms of the refinancing shall be no less
favorable to the buyer than the terms of the original sale. This section
does not apply to the extent that the payment schedule is adjusted to
the seasonal or irregular income of the buyer.
(2) For the purposes of this section, "terms of the refinancing"
means:
(a) in the case of a fixed-rate consumer credit sale, the
individual payment amounts, the charges as a result of default
by the buyer, and the rate of the credit service charge; and
(b) in the case of a variable rate consumer credit sale, the
method used to determine the individual payment amounts, the
charges as a result of default by the buyer, the method used to
determine the rate of the credit service charge, the
circumstances under which the rate of the credit service charge
may increase, and any limitations on the increase in the rate of
the credit service charge. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by
P.L.247-1983, SEC.10.
IC 24-4.5-2-406 Restriction on liability in consumer lease
Sec. 406. The obligation of a lessee upon expiration of a
consumer lease may not exceed three (3) times the average payment
allocable to a monthly period under the lease. This limitation does
not apply to charges for damages to the leased property or for other
default. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by
P.L.247-1983, SEC.11; P.L.45-1995, SEC.7.
IC 24-4.5-2-407 Security interests
Sec. 407. (1) With respect to a consumer credit sale, a seller may
take a security interest in the property sold. In addition, a seller may
take a security interest in goods upon which services are performed
or in which goods sold are installed or to which they are annexed, or
in land to which the goods are affixed or which is maintained,
repaired or improved as a result of the sale of the goods or services,
if, in the case of a subordinate lien mortgage transaction, the debt
secured is one thousand dollars ($1,000) or more, or, in the case of
a security interest in goods the debt secured is three hundred dollars
($300) or more. Except as provided with respect to cross-collateral
(IC 24-4.5-2-408), a seller may not otherwise take a security interest
in property of the buyer to secure the debt arising from a consumer
credit sale.
(2) With respect to a consumer lease, a lessor may not take a
security interest in property of the lessee to secure the debt arising
from the lease.
(3) A security interest taken in violation of this section is void.
(4) The amounts of one thousand dollars ($1,000) and three
hundred dollars ($300) in subsection (1) are subject to change
pursuant to the provisions on adjustment of dollar amounts (IC
24-4.5-1-106). (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by
P.L.247-1983, SEC.12; P.L.35-2010, SEC.46.
IC 24-4.5-2-408 Cross-collateral
Sec. 408. Cross-Collateral _ (1) In addition to contracting for a
security interest pursuant to the provisions on security in sales or
leases (24-4.5-2-407), a seller in a consumer credit sale may secure
the debt arising from the sale by contracting for a security interest in
other property if as a result of a prior sale the seller has an existing
security interest in the other property. The seller may also contract
for a security interest in the property sold in the subsequent sale as
security for the previous debt.
(2) If the seller contracts for a security interest in other property
pursuant to this section, the rate of credit service charge thereafter on
the aggregate unpaid balances so secured may not exceed that
permitted if the balances so secured were consolidated pursuant to
the provisions on consolidation involving a refinancing (subsection
(1) of 24-4.5-2-206). The seller has a reasonable time after so
contracting to make any adjustments required by this section.
"Seller" in this section does not include an assignee not related to the
original seller. (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-409 Debt secured by cross-collateral
Sec. 409. (1) If debts arising from two (2) or more consumer
credit sales, other than sales pursuant to a revolving charge account,
are secured by cross-collateral (IC 24-4.5-2-408) or consolidated into
one (1) debt payable on a single schedule of payments, and the debt
is secured by security interests taken with respect to one (1) or more
of the sales, payments received by the seller after the taking of the
cross-collateral or the consolidation are deemed, for the purpose of
determining the amount of the debt secured by the various security
interests, to have been first applied to the payment of the debts
arising from the sales first made. To the extent debts are paid
according to this section, security interests in items of property
terminate as the debt originally incurred with respect to each item is
paid.
(2) Payments received by the seller upon a revolving charge
account are deemed, for the purpose of determining the amount of
the debt secured by the various security interests, to have been
applied first to the payment of credit service charges in the order of
their entry to the account and then to the payment of debts in the
order in which the entries to the account showing the debts were
made.
(3) If the debts consolidated arose from two (2) or more sales
made on the same day, payments received by the seller are deemed,
for the purpose of determining the amount of the debts secured by
the various security interests, to have been applied first to the
payment of the smallest debt. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by
P.L.247-1983, SEC.13.
IC 24-4.5-2-410 No assignment of earnings
Sec. 410. No Assignment of Earnings _ A seller or lessor may
not take an assignment of earnings of the buyer or lessee for payment
or as security for payment of a claim, whether arising out of a
consumer credit sale, consumer lease or otherwise. An assignment of
earnings in violation of this section is unenforceable by the assignees
of the earnings and revocable by the buyer or lessee. This section
does not prohibit an employee from authorizing deductions from his
earnings if the authorization is revocable and is otherwise permitted
by law. (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-411 Referral sales
Sec. 411. Referral Sales _ With respect to a consumer credit sale
or consumer lease the seller or lessor may not give or offer to give a
rebate or discount or otherwise pay or offer to pay value to the buyer
or lessee as an inducement for a sale or lease in consideration of his
giving to the seller or lessor the names of prospective purchasers or
lessees, or otherwise aiding the seller or lessor in making a sale or
lease to another person, if the earning of the rebate, discount or other
value is contingent upon the occurrence of an event subsequent to the
time the buyer or lessee agrees to buy or lease. If a buyer or lessee is
induced by a violation of this section to enter into a consumer credit
sale or consumer lease, the agreement is unenforceable by the seller
or lessor and the buyer or lessee, at his option, may rescind the
agreement or retain the goods delivered and the benefit of any
services performed, without any obligation to pay for them. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by Acts 1978,
P.L.127, SEC.1.
IC 24-4.5-2-412 Notice of assignment
Sec. 412. Notice of Assignment _ The buyer or lessee is
authorized to pay the original seller or lessor until the buyer or lessee
receives notification of assignment of the rights to payment pursuant
to a consumer credit sale or consumer lease and that payment is to be
made to the assignee. A notification which does not reasonably
identify the rights assigned is ineffective. If requested by the buyer
or lessee, the assignee must seasonably furnish reasonable proof that
the assignment has been made and unless he does so the buyer or
lessee may pay the seller or lessor. (Formerly: Acts 1971, P.L.366, SEC.3.) IC 24-4.5-2-413 Attorney's fees
Sec. 413. Attorney's Fees _ With respect to a consumer credit
sale or consumer lease the agreement may provide for the payment
by the buyer or lessee of reasonable attorney's fees and after default
and referral to an attorney not a salaried employee of the seller, or of
the lessor or his assignee. A provision in violation of this section is
unenforceable. (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-414 Limitation on default charges
Sec. 414. Limitation on Default Charges _ Except for reasonable
expenses incurred in realizing on a security interest, the agreement
with respect to a consumer credit sale may not provide for any
charges as a result of default by the buyer other than those authorized
by this Article. A provision in violation of this section is
unenforceable. (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-415 Authorization to confess judgment prohibited
Sec. 415. Authorization to Confess Judgment Prohibited - A buyer
or lessee may not authorize any person to confess judgment on a
claim arising out of a consumer credit sale or consumer lease. An
authorization in violation of this section is void. (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-416
Repealed
(Repealed by P.L.122-1994, SEC.122.)
(Part 5. Home Solicitation Sales)
IC 24-4.5-2-501 "Home solicitation sale"
Sec. 501. Definition: "Home Solicitation Sale" _ "Home
solicitation sale" means a consumer credit sale of goods, other than
farm equipment, or services in which:
(1) the seller or a person acting for him engages in a personal
solicitation of the sale, including a solicitation over the
telephone, at a residence of the buyer and the buyer's agreement
or offer to purchase is there given to the seller or a person
acting for him; or
(2) the seller or his agent, solicits a sale in a city or town in
which the seller does not have a permanent business
establishment, through mailings, advertisements, or telephone
calls, which require the buyer to meet the seller or his agent at
a place other than the seller's permanent business establishment.
It does not include a sale made pursuant to a preexisting revolving
charge account, or a sale made pursuant to prior negotiations
between the parties at a business establishment at a fixed location
where goods or services are offered or exhibited for sale. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by Acts 1979,
P.L.237, SEC.1.
IC 24-4.5-2-502 Buyer's right to cancel
Sec. 502. Buyer's Right to Cancel _ The requirements of 16 CFR
429 must be met in regard to the following provisions concerning
home solicitation sales:
(1) Period within which cancellation may be made by the buyer.
(2) Notice of cancellation.
(3) Form of cancellation.
(4) Form of agreement or offer to purchase.
(5) Statement of buyer's rights.
(6) Restoration of down payment.
(7) Retention of cancellation fee.
(8) Duty of buyer.
(9) Any other relevant requirements in 16 CFR 429. (Formerly: Acts 1971, P.L.
IC 24-4.5-2-101 Short title
Sec. 101. Short Title _ This Chapter shall be known and may be
cited as Uniform Consumer Credit Code - Credit Sales. (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-102 Application
Sec. 102. This chapter applies to consumer credit sales, including
home solicitation sales, and consumer leases. In addition,
IC 24-4.5-2-601 through IC 24-4.5-2-605 apply to consumer related
sales. Licensing under IC 24-4.5-3-502.1 applies to consumer credit
sales that are subordinate lien mortgage transactions. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by
P.L.152-1986, SEC.60; P.L.35-2010, SEC.42.
IC 24-4.5-2-103 Definitions in chapter
Sec. 103. Definitions in Chapter _ The following definitions
apply to this Article and appear in this Chapter as follows:
"Amount financed" Section 2-111
"Annual percentage rate" Section 2-304 (2)
"Cash price" Section 2-110
"Consumer credit sale" Section 2-104
"Consumer lease" Section 2-106
"Consumer related sale" Section 2-602
"Corresponding nominal annual
percentage rate" Section 2-304 (3)
"Credit service charge" Section 2-109
"Goods" Section 2-105 (1)
"Home solicitation sale" Section 2-501
"Merchandise certificate" Section 2-105 (2)
"Precomputed" Section 2-105 (7)
"Revolving charge account" Section 2-108
"Sale of goods" Section 2-105 (4)
"Sale of an interest in land" Section 2-105 (6)
"Sale of services" Section 2-105 (5)
"Seller" Section 2-107
"Services" Section 2-105 (3)
(Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-104
Repealed
(Repealed by P.L.35-2010, SEC.209.) IC 24-4.5-2-105 "Goods"; "merchandise certificate"; "services"; "sale of goods";
"sale of services"; "sale of an interest in land"; "precomputed"
Sec. 105. Definitions: "Goods"; "Merchandise Certificate";
"Services"; "Sale of Goods"; "Sale of Services"; "Sale of an Interest
in Land"; "Precomputed".
(1) "Goods" includes goods not in existence at the time the
transaction is entered into and merchandise certificates, but excludes
money, chattel paper, documents of title, and instruments.
(2) "Merchandise certificate" means a writing issued by a seller
not redeemable in cash and usable in its face amount in lieu of cash
in exchange for goods or services.
(3) "Services" includes (a) work, labor, and other personal
services, (b) privileges with respect to transportation, hotel and
restaurant accommodations, education, entertainment, recreation,
physical culture, hospital accommodations, funerals, cemetery
accommodations, and the like, and (c) insurance provided by a
person other than the insurer.
(4) "Sale of goods" includes any agreement in the form of a
bailment or lease of goods if the bailee or lessee agrees to pay as
compensation for use a sum substantially equivalent to or in excess
of the aggregate value of the goods involved and it is agreed that the
bailee or lessee will become, or for no other or a nominal
consideration has the option to become, the owner of the goods upon
full compliance with his obligations under the agreement.
(5) "Sale of services" means furnishing or agreeing to furnish
services and includes making arrangements to have services
furnished by another.
(6) "Sale of an interest in land" includes a lease in which the
lessee has an option to purchase the interest and all or a substantial
part of the rental or other payments previously made by him are
applied to the purchase price.
(7) A sale, refinancing, or consolidation is "precomputed" if the
debt is expressed as a sum comprising the amount financed and the
amount of the credit service charge computed in advance. (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-106 "Consumer lease"
Sec. 106. (1) "Consumer lease" means a lease of goods:
(a) which a lessor regularly engaged in the business of leasing
makes to a person, other than an organization, who takes under
the lease primarily for a personal, family, or household purpose;
(b) in which the amount payable under the lease does not
exceed fifty thousand dollars ($50,000); and
(c) which is for a term exceeding four (4) months.
(2) "Consumer lease" does not include a lease made pursuant to
a lender credit card or similar arrangement. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by
P.L.247-1983, SEC.3; P.L.122-1994, SEC.9. IC 24-4.5-2-107 "Seller"
Sec. 107. Definition; "Seller" - Except as otherwise provided,
"seller" means a person regularly engaged as a creditor in making
consumer credit sales. The term includes an assignee of the seller's
right to payment but use of the term does not in itself impose on an
assignee any obligation of the seller with respect to events occurring
before the assignment. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by
P.L.145-2008, SEC.22.
IC 24-4.5-2-108 "Revolving charge account"
Sec. 108. Definition: "Revolving Charge Account" _ "Revolving
charge account" means an arrangement between a seller and a buyer
pursuant to which (1) the seller may permit the buyer to purchase
goods or services on credit either from the seller or pursuant to a
seller credit card, (2) the unpaid balances of amounts financed
arising from purchases and the credit service and other appropriate
charges are debited to an account, (3) a credit service charge if made
is not precomputed but is computed on the outstanding unpaid
balances of the buyer's account from time to time, and (4) the buyer
has the privilege of paying the balances in instalments. (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-109 "Credit service charge"
Sec. 109. "Credit service charge" means the sum of:
(1) all charges payable directly or indirectly by the buyer and
imposed directly or indirectly by the seller as an incident to the
extension of credit, including any of the following types of
charges which are applicable: time price differential, service,
carrying or other charge, however denominated, premium or
other charge for any guarantee or insurance protecting the seller
against the buyer's default or other credit loss; and
(2) charges incurred for investigating the collateral or
credit-worthiness of the buyer.
The term does not include charges as a result of default, additional
charges (IC 24-4.5-2-202), delinquency charges (IC 24-4.5-2-203.5),
or deferral charges (IC 24-4.5-2-204). The term does not include
charges paid or payable to a third party that are not required by the
seller as a condition or incident to the extension of credit except for
borrower paid mortgage broker fees, including fees paid directly to
the broker or the seller (for delivery to the broker), whether the fees
are paid in cash or financed. However, borrower paid mortgage
broker fees do not include fees paid to a mortgage broker by a
creditor, including yield spread premiums and service release fees. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by
P.L.247-1983, SEC.4; P.L.14-1992, SEC.13; P.L.2-1995, SEC.90;
P.L.172-1997, SEC.3. IC 24-4.5-2-110 "Cash price"
Sec. 110. Definition: "Cash Price" _ Except as the department
may prescribe by rule, the "cash price" of goods, services, or an
interest in land means the price at which the goods, services, or
interest in land are offered for sale by the seller to cash buyers in the
ordinary course of business, and may include (1) applicable sales,
use, and excise and documentary fees, (2) the cash price of
accessories or related services such as delivery, installation,
servicing, repairs, alterations, service contracts, and improvements,
and (3) amounts actually paid or to be paid by the seller for
registration, certificate of title, or license fees. The cash price stated
by the seller to the buyer pursuant to the provisions on disclosure
(Part 3) of this Chapter is presumed to be the cash price. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by P.L.14-1992,
SEC.14; P.L.122-1994, SEC.10.
IC 24-4.5-2-111 "Amount financed"
Sec. 111. Definition: "Amount Financed" _ "Amount financed"
means the total of the following to the extent that payment is
deferred:
(1) the cash price of the goods, services, or interest in land less the
amount of down payment whether made in cash or property;
(2) the amount actually paid or to be paid by the seller pursuant
to an agreement with the buyer to discharge a security interest or lien
on property traded in; and
(3) if not included in the cash price:
(a) any applicable sales, use, excise or documentary fees;
(b) amounts actually paid or to be paid by the seller for
registration, certificate of title, or license fees; and
(c) additional charges permitted by this Chapter (IC
24-4.5-2-202). (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by
P.L.122-1994, SEC.11.
(Part 2. Maximum Charges)
IC 24-4.5-2-201 Credit service charge for consumer credit sales other than
revolving charge accounts
Sec. 201. Credit Service Charge for Consumer Credit Sales other
than Revolving Charge Accounts _ (1) With respect to a consumer
credit sale, other than a sale pursuant to a revolving charge account,
a seller may contract for and receive a credit service charge not
exceeding that permitted by this section.
(2) The credit service charge, calculated according to the actuarial
method, may not exceed the equivalent of the greater of either of the
following:
(a) the total of:
(i) thirty-six percent (36%) per year on that part of the
unpaid balances of the amount financed which is three
hundred dollars ($300) or less;
(ii) twenty-one percent (21%) per year on that part of the
unpaid balances of the amount financed which is more than
three hundred dollars ($300) but does not exceed one
thousand dollars ($1,000); and
(iii) fifteen percent (15%) per year on that part of the unpaid
balances of the amount financed which is more than one
thousand dollars ($1,000); or
(b) twenty-one percent (21%) per year on the unpaid balances
of the amount financed.
(3) This section does not limit or restrict the manner of
contracting for the credit service charge, whether by way of add-on,
discount, or otherwise, so long as the rate of the credit service charge
does not exceed that permitted by this section. If the sale is
precomputed:
(a) the credit service charge may be calculated on the
assumption that all scheduled payments will be made when due;
and
(b) the effect of prepayment is governed by the provisions on
rebate upon prepayment (IC 24-4.5-2-210).
(4) For the purposes of this section, the term of a sale agreement
commences with the date the credit is granted or, if goods are
delivered or services performed more than thirty (30) days after that
date, with the date of commencement of delivery or performance
except as set forth below:
(a) Delays attributable to the customer. Where the customer
requests delivery after the thirty (30) day period or where
delivery occurs after the thirty (30) day period for a reason
attributable to the customer (including but not limited to failure
to close on a residence or failure to obtain lease approval), the
term of the sale agreement shall commence with the date credit
is granted.
(b) Partial Deliveries. Where any portion of the order has been
delivered within the thirty (30) day period, the term of the sale
agreement shall commence with the date credit is granted.
Differences in the lengths of months are disregarded and a day may
be counted as one-thirtieth (1/30) of a month. Subject to
classifications and differentiations the seller may reasonably
establish, a part of a month in excess of fifteen (15) days may be
treated as a full month if periods of fifteen (15) days or less are
disregarded and that procedure is not consistently used to obtain a
greater yield than would otherwise be permitted.
(5) Subject to classifications and differentiations the seller may
reasonably establish, the seller may make the same credit service
charge on all amounts financed within a specified range. A credit
service charge so made does not violate subsection (2) if:
(a) when applied to the median amount within each range, it
does not exceed the maximum permitted by subsection (2); and
(b) when applied to the lowest amount within each range, it
does not produce a rate of credit service charge exceeding the
rate calculated according to paragraph (a) by more than eight
percent (8%) of the rate calculated according to paragraph (a).
(6) Notwithstanding subsection (2), the seller may contract for
and receive a minimum credit service charge of not more than thirty
dollars ($30). The minimum credit service charge allowed under this
subsection may be imposed only if:
(a) the debtor prepays in full a consumer credit sale,
refinancing, or consolidation, regardless of whether the sale,
refinancing, or consolidation is precomputed;
(b) the sale, refinancing, or consolidation prepaid by the debtor
is subject to a credit service charge that:
(i) is contracted for by the parties; and
(ii) does not exceed the rate prescribed in subsection (2); and
(c) the credit service charge earned at the time of prepayment is
less than the minimum credit service charge contracted for
under this subsection.
(7) The amounts of three hundred dollars ($300) and one thousand
dollars ($1,000) in subsection (2) are subject to change pursuant to
the provisions on adjustment of dollar amounts (IC 24-4.5-1-106).
(8) The amount of thirty dollars ($30) in subsection (6) is subject
to change under the provisions on adjustment of dollar amounts (IC
24-4.5-1-106). However, notwithstanding IC 24-4.5-1-106(1), the
Reference Base Index to be used under this subsection is the Index
for October 1992. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by Acts 1981,
P.L.219, SEC.1; P.L.14-1992, SEC.15; P.L.79-1998, SEC.26;
P.L.80-1998, SEC.4; P.L.10-2006, SEC.4 and P.L.57-2006, SEC.4;
P.L.145-2008, SEC.23.
IC 24-4.5-2-202 Permitted additional charges
Sec. 202. (1) In addition to the credit service charge permitted by
IC 24-4.5-2-201 through IC 24-4.5-2-210, a seller may contract for
and receive any of the following additional charges in connection
with a consumer credit sale:
(a) Official fees and taxes.
(b) Charges for insurance as described in subsection (2).
(c) Notwithstanding provisions of the Federal Consumer Credit
Protection Act concerning disclosure, charges for other
benefits, including insurance, conferred on the buyer, if the
benefits are of value to the buyer and if the charges are
reasonable in relation to the benefits, and are excluded as
permissible additional charges from the credit service charge.
With respect to any additional charge not specifically provided
for in this section, to be a permitted charge under this
subsection the seller must submit a written explanation of the
charge to the department indicating how the charge would be
assessed and the value or benefit to the buyer. Supporting
documents may be required by the department. The department
shall determine whether the charge would be of benefit to the
buyer and is reasonable in relation to the benefits.
(d) A charge not to exceed twenty-five dollars ($25) for each
return by a bank or other depository institution of a dishonored
check, negotiable order of withdrawal, or share draft issued by
the debtor.
(e) Annual participation fees assessed in connection with a
revolving charge account. Annual participation fees must:
(i) be reasonable in amount;
(ii) bear a reasonable relationship to the seller's costs to
maintain and monitor the charge account; and
(iii) not be assessed for the purpose of circumvention or
evasion of this article, as determined by the department.
(2) An additional charge may be made for insurance written in
connection with the sale, other than insurance protecting the seller
against the buyer's default or other credit loss:
(a) with respect to insurance against loss of or damage to
property, or against liability, if the seller furnishes a clear and
specific statement in writing to the buyer, setting forth the cost
of the insurance if obtained from or through the seller and
stating that the buyer may choose the person, subject to the
seller's reasonable approval, through whom the insurance is to
be obtained; and
(b) with respect to consumer credit insurance providing life,
accident, unemployment or other loss of income, or health
coverage, if the insurance coverage is not a factor in the
approval by the seller of the extension of credit and is clearly
disclosed in writing to the buyer, and if, in order to obtain the
insurance in connection with the extension of credit, the buyer
gives specific, affirmative, written indication of the desire to do
so after written disclosure of the cost.
(3) With respect to a subordinate lien mortgage transaction, the
following closing costs, if the costs are bona fide, reasonable in
amount, and not for the purpose of circumvention or evasion of this
article:
(a) fees for title examination, abstract of title, title insurance,
property surveys, or similar purposes;
(b) fees for preparing deeds, mortgages, and reconveyance,
settlement, and similar documents;
(c) notary and credit report fees;
(d) amounts required to be paid into escrow or trustee accounts
if the amounts would not otherwise be included in the loan
finance charge; and
(e) appraisal fees. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by
P.L.247-1983, SEC.5; P.L.181-1991, SEC.1; P.L.14-1992, SEC.16;
P.L.122-1994, SEC.12; P.L.45-1995, SEC.4; P.L.80-1998, SEC.5;
P.L.213-2007, SEC.7; P.L.217-2007, SEC.6; P.L.35-2010, SEC.43. IC 24-4.5-2-203
Repealed
(Repealed by P.L.122-1994, SEC.122.)
IC 24-4.5-2-203.5 Delinquency charges
Sec. 203.5. Delinquency Charges _ (1) With respect to a
consumer credit sale, refinancing, or consolidation, the parties may
contract for a delinquency charge of not more than five dollars ($5)
on any installment or minimum payment due not paid in full within
ten (10) days after its scheduled due date.
(2) A delinquency charge under this section may be collected only
once on an installment however long it remains in default. A
delinquency charge on consumer credit sales made under a revolving
charge account may be applied each month that the payment is less
than the minimum required payment. A delinquency charge may be
collected any time after it accrues. No delinquency charge may be
collected if the installment has been deferred and a deferral charge
(IC 24-4.5-2-204) has been paid or incurred.
(3) A delinquency charge may not be collected on an installment
or payment due that is paid in full within ten (10) days after its
scheduled due date even though an earlier maturing installment,
minimum payment, or a delinquency charge on:
(a) an earlier installment; or
(b) payment due;
may not have been paid in full. For purposes of this subsection,
payments are applied first to current installments or payments due
and then to delinquent installments or payments due.
(4) If two (2) installments or parts of two (2) installments of a
precomputed consumer credit sale are in default for ten (10) days or
more, the creditor may elect to convert the consumer credit sale from
a precomputed consumer credit sale to a consumer credit sale in
which the credit service charge is based on unpaid balances. A
creditor that makes this election shall make a rebate under the
provisions on rebates upon prepayment under IC 24-4.5-2-210 as of
the maturity date of the first delinquent installment, and thereafter
may make a credit service charge as authorized by the provisions on
credit service charges for consumer credit sales under
IC 24-4.5-2-201. The amount of the rebate shall not be reduced by
the amount of any permitted minimum charge under IC 24-4.5-2-210.
Any deferral charges made on installments due at or after the
maturity date of the first delinquent installment shall be rebated, and
no further deferral charges shall be made.
(5) The amount of five dollars ($5) in subsection (1) is subject to
change under the section on adjustment of dollar amounts (IC
24-4.5-1-106).
(6) If the parties provide by contract for a delinquency charge that
is subject to change, the seller shall disclose in the contract that the
amount of the delinquency charge is subject to change as allowed by
IC 24-4.5-1-106.
As added by P.L.247-1983, SEC.6. Amended by P.L.181-1991,
SEC.2; P.L.115-1992, SEC.1; P.L.122-1994, SEC.13; P.L.45-1995,
SEC.5.
IC 24-4.5-2-204 Deferral charges
Sec. 204. Deferral Charges _ (1) With respect to a precomputed
consumer credit sale, refinancing, or consolidation, the parties before
or after default may agree in writing to a deferral of all or part of one
or more unpaid instalments, and the seller may make and collect a
charge not exceeding the rate previously stated to the buyer pursuant
to the provisions on disclosure (Part 3) applied to the amount or
amounts deferred for the period of deferral calculated without regard
to differences in lengths of months, but proportionately for a part of
a month, counting each day as one-thirtieth (1/30) of a month. A
deferral charge may be collected at the time it is assessed or at any
time thereafter.
(2) The seller, in addition to the deferral charge, may make
appropriate additional charges (24-4.5-2-202), and the amount of
these charges which is not paid in cash may be added to the amount
deferred for the purpose of calculating the deferral charge.
(3) The parties may agree in writing at the time of a precomputed
consumer credit sale, refinancing, or consolidation that if an
instalment is not paid within ten (10) days after its due date, the
seller may unilaterally grant a deferral and make charges as provided
in this section. No deferral charge may be made for a period after the
date that the seller elects to accelerate the maturity of the agreement.
(4) A delinquency charge made by the seller on an instalment may
not be retained if a deferral charge is made pursuant to this section
with respect to the period of delinquency. (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-205 Credit service charge on refinancing
Sec. 205. Credit Service Charge on Refinancing _ With respect
to a consumer credit sale, refinancing, or consolidation, the seller
may by agreement with the buyer refinance the unpaid balance and
may contract for and receive a credit service charge based on the
amount financed resulting from the refinancing at a rate not
exceeding that permitted by the provisions on credit service charge
for consumer credit sales (IC 24-4.5-2-201). For the purpose of
determining the credit service charge permitted, the amount financed
resulting from the refinancing comprises the following:
(1) If the transaction was not precomputed, the total of the unpaid
balance and accrued charges on the date of refinancing, or, if the
transaction was precomputed, the amount which the buyer would
have been required to pay upon prepayment pursuant to the
provisions on rebate upon prepayment (IC 24-4.5-2-210) on the date
of refinancing.
(2) Appropriate additional charges (IC 24-4.5-2-202), payment of
which is deferred. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by P.L.14-1992,
SEC.17.
IC 24-4.5-2-206 Credit service charge on consolidation
Sec. 206. Credit Service Charge on Consolidation _ If a buyer
owes an unpaid balance to a seller with respect to a consumer credit
sale, refinancing, or consolidation, and becomes obligated on another
consumer credit sale, refinancing, or consolidation with the same
seller, the parties may agree to a consolidation resulting in a single
schedule of payments pursuant to either of the following subsections:
(1) The parties may agree to refinance the unpaid balance with
respect to the previous sale pursuant to the provisions on refinancing
(24-4.5-2-205) and to consolidate the amount financed resulting from
the refinancing by adding it to the amount financed with respect to
the subsequent sale. The seller may contract for and receive a credit
service charge based on the aggregate amount financed resulting
from the consolidation at a rate not exceeding that permitted by the
provisions on credit service charge for consumer credit sales
(24-4.5-2-201).
(2) The parties may agree to consolidate by adding together the
unpaid balances with respect to the two sales. (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-207 Credit service charge for revolving charge accounts
Sec. 207. Credit Service Charge for Revolving Charge Accounts
_ (1) With respect to a consumer credit sale made pursuant to a
revolving charge account, the parties to the sale may contract for the
payment by the buyer of a credit service charge not exceeding that
permitted in this section.
(2) A charge may be made in each billing cycle which is a
percentage of an amount no greater than
(a) the average daily balance of the account,
(b) the unpaid balance of the account on the same day of the
billing cycle, or
(c) the median amount within a specified range within which
the average daily balance of the account or the unpaid balance
of the account on the same day of the billing cycle is included.
A charge may be made pursuant to this paragraph only if the
seller, subject to classification and differentiations he may
reasonably establish, makes the same charge on all balances
within the specified range and if the percentage when applied
to the median amount within the range does not produce a
charge exceeding the charge resulting from applying that
percentage to the lowest amount within the range by more than
eight percent (8%) of the charge on the median amount.
(3) If the billing cycle is monthly, the charge may not exceed one
and three-fourths percent (1 3/4%) of the amount pursuant to
subsection (2). If the billing cycle is not monthly, the maximum
charge is that percentage which bears the same relation to the
applicable monthly percentage as the number of days in the billing
cycle bears to thirty (30). For the purposes of this section, a variation
of not more than four (4) days from month to month is "the same day
of the billing cycle."
(4) Notwithstanding subsection (3), if there is an unpaid balance
on the date as of which the credit service charge is applied, the seller
may contract for and receive a charge not exceeding fifty cents
($.50), if the billing cycle is monthly or longer, or the pro rata part of
fifty cents ($.50) which bears the same relation to fifty cents ($.50)
as the number of days in the billing cycle bears to thirty (30) if the
billing cycle is shorter than monthly. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by Acts 1981,
P.L.219, SEC.2; Acts 1982, P.L.150, SEC.1.
IC 24-4.5-2-208 Advances to perform covenants of buyer
Sec. 208. Advances to Perform Covenants of Buyer _ (1) If the
agreement with respect to a consumer credit sale, refinancing, or
consolidation contains covenants by the buyer to perform certain
duties pertaining to insuring or preserving collateral and the seller
pursuant to the agreement pays for performance of the duties on
behalf of the buyer, the seller may add the amounts paid to the debt.
Within a reasonable time after advancing any sums, he shall state to
the buyer in writing the amount of the sums advanced, any charges
with respect to this amount, and any revised payment schedule and,
if the duties of the buyer performed by the seller pertain to insurance,
a brief description of the insurance paid for by the seller including
the type and amount of coverages. No further information need be
given.
(2) A credit service charge may be made for sums advanced
pursuant to subsection (1) at a rate not exceeding the rate stated to
the buyer pursuant to the provisions on disclosure (Part 3) with
respect to the sale, refinancing or consolidation, except that with
respect to a revolving charge account the amount of the advance may
be added to the unpaid balance of the account and the seller may
make a credit service charge not exceeding that permitted by the
provisions on credit service charge for revolving charge accounts
(24-4.5-2-207). (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-209 Right to prepay; payoff amount; liability for failure to provide;
short sale; acknowledgment of offer; acceptance or rejection;
acceptance of payment; liability for failure to respond
Sec. 209. (1) Subject to the provisions on rebate upon prepayment
(IC 24-4.5-2-210), the buyer may prepay in full the unpaid balance
of a consumer credit sale, refinancing, or consolidation at any time
without penalty.
(2) At the time of prepayment of a credit sale not subject to the
provisions of rebate upon prepayment (IC 24-4.5-2-210), the total
credit service charge, including the prepaid credit service charge,
may not exceed the maximum charge allowed under this chapter for
the period the credit sale was in effect.
(3) The creditor or mortgage servicer shall provide an accurate
payoff of the consumer credit sale to the debtor within ten (10)
calendar days after the creditor or mortgage servicer receives the
debtor's written request for the accurate consumer credit sale payoff
amount. A creditor or mortgage servicer who fails to provide the
accurate consumer credit sale payoff amount is liable for:
(A) one hundred dollars ($100) if an accurate consumer
credit sale payoff amount is not provided by the creditor or
mortgage servicer within ten (10) calendar days after the
creditor or mortgage servicer receives the debtor's first
written request; and
(B) the greater of:
(i) one hundred dollars ($100); or
(ii) the credit service charge that accrues on the sale from
the date the creditor or mortgage servicer receives the first
written request until the date on which the accurate
consumer credit sale payoff amount is provided;
if an accurate consumer credit sale payoff amount is not
provided by the creditor or mortgage servicer within ten (10)
calendar days after the creditor or mortgage servicer receives
the debtor's second written request, and the creditor or
mortgage servicer failed to comply with clause (A).
A liability under this subsection is an excess charge under
IC 24-4.5-5-202.
(4) As used in this subsection, "mortgage transaction" means a
consumer credit sale in which a mortgage, deed of trust, or a land
contract that constitutes a lien is created or retained against land
upon which there is a dwelling that is or will be used by the debtor
primarily for personal, family, or household purposes. This
subsection applies to a mortgage transaction with respect to which
any installment or minimum payment due is delinquent for at least
sixty (60) days. The creditor, servicer, or the creditor's agent shall
acknowledge a written offer made in connection with a proposed
short sale not later than ten (10) business days after the date of the
offer if the offer complies with the requirements for a qualified
written request set forth in 12 U.S.C. 2605(e)(1)(B). The creditor,
servicer, or creditor's agent is required to acknowledge a written
offer made in connection with a proposed short sale from a third
party acting on behalf of the debtor only if the debtor has provided
written authorization for the creditor, servicer, or creditor's agent to
do so. Not later than thirty (30) business days after receipt of an offer
under this subsection, the creditor, servicer, or creditor's agent shall
respond to the offer with an acceptance or a rejection of the offer.
Payment accepted by a creditor, servicer, or creditor's agent in
connection with a short sale constitutes payment in full satisfaction
of the mortgage transaction unless the creditor, servicer, or creditor's
agent obtains:
(a) the following statement: "The debtor remains liable for any
amount still owed under the mortgage transaction."; or
(b) a statement substantially similar to the statement set forth in
subdivision (a);
acknowledged by the initials or signature of the debtor, on or before
the date on which the short sale payment is accepted. As used in this
subsection, "short sale" means a transaction in which the property
that is the subject of a mortgage transaction is sold for an amount
that is less than the amount of the debtor's outstanding obligation
under the mortgage transaction. A creditor or mortgage servicer that
fails to respond to an offer within the time prescribed by this
subsection is liable in accordance with 12 U.S.C. 2605(f) in any
action brought under that section. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by P.L.23-2000,
SEC.5; P.L.63-2001, SEC.2 and P.L.134-2001, SEC.2;
P.L.145-2008, SEC.24; P.L.35-2010, SEC.44.
IC 24-4.5-2-210 Rebate upon prepayment
Sec. 210. Rebate upon Prepayment _ (1) Except as provided in
subsection (2), upon prepayment in full of the unpaid balance of a
precomputed consumer credit sale, refinancing, or consolidation, an
amount not less than the unearned portion of the credit service
charge calculated according to this section shall be rebated to the
buyer. If the rebate required is less than one dollar ($1), no rebate
need be made.
(2) Upon prepayment in full of a consumer credit sale,
refinancing, or consolidation, other than one pursuant to a revolving
charge account, if the credit service charge then earned is less than
any permitted minimum credit service charge (IC 24-4.5-2-201(6))
contracted for, whether or not the sale, refinancing, or consolidation
is precomputed, the seller may collect or retain the minimum charge,
as if earned, not exceeding the credit service charge contracted for.
(3) The unearned portion of the credit service charge is a fraction
of the credit service charge of which the numerator is the sum of the
periodic balances scheduled to follow the computational period in
which prepayment occurs, and the denominator is the sum of all
periodic balances under either the sale agreement or, if the balance
owing resulted from a refinancing (IC 24-4.5-2-205) or a
consolidation (IC 24-4.5-2-206), under the refinancing agreement or
consolidation agreement.
(4) In this section:
(a) "periodic balance" means the amount scheduled to be
outstanding on the last day of a computational period before
deducting the payment, if any, scheduled to be made on that
day;
(b) "computational period" means one (1) month if one-half
(1/2) or more of the intervals between scheduled payments
under the agreement is one (1) month or more, and otherwise
means one (1) week;
(c) the "interval" to the due date of the first scheduled
installment or the final scheduled payment date is measured
from the date of a sale, refinancing, or consolidation, or any
later date prescribed for calculating maximum credit service
charges (IC 24-4.5-2-201(4)) and includes either the first or last
day of the interval; and
(d) if the interval to the due date of the first scheduled
installment does not exceed one (1) month by more than fifteen
(15) days when the computational period is one (1) month, or
eleven (11) days when the computational period is one (1)
week, the interval shall be considered as one (1) computational
period.
(5) This subsection applies only if the schedule of payments is not
regular.
(a) If the computational period is one (1) month and:
(i) if the number of days in the interval to the due date of the
first scheduled installment is less than one (1) month by
more than five (5) days, or more than one (1) month by more
than five (5) but not more than fifteen (15) days, the
unearned credit service charge shall be increased by an
adjustment for each day by which the interval is less than
one (1) month and, at the option of the seller, may be
reduced by an adjustment for each day by which the interval
is more than one (1) month; the adjustment for each day
shall be one-thirtieth (1/30) of that part of the credit service
charge earned in the computational period prior to the due
date of the first scheduled installment assuming that period
to be one (1) month; and
(ii) if the interval to the final scheduled payment date is a
number of computational periods plus an additional number
of days less than a full month, the additional number of days
shall be considered a computational period only if sixteen
(16) days or more. This subparagraph applies whether or not
clause (i) applies.
(b) Notwithstanding paragraph (a), if the computational period
is one (1) month, the number of days in the interval to the due
date of the first installment exceeds one (1) month by not more
than fifteen (15) days, and the schedule of payments is
otherwise regular, the seller, at the seller's option, may exclude
the extra days and the charge for the extra days in computing
the unearned credit service charge; but if the seller does so and
a rebate is required before the due date of the first scheduled
installment, the seller shall compute the earned charge for each
elapsed day as one-thirtieth (1/30) of the amount the earned
charge would have been if the first interval had been one (1)
month.
(c) If the computational period is one (1) week and:
(i) if the number of days in the interval to the due date of this
first scheduled installment is less than five (5) days or more
than nine (9) days but not more than eleven (11) days, the
unearned credit service charge shall be increased by an
adjustment for each day by which the interval is less than
seven (7) days and, at the option of the seller, may be
reduced by an adjustment for each day by which the interval
is more than seven (7) days; the adjustment for each day
shall be one-seventh (1/7) of that part of the credit service
charge earned in the computational period prior to the due
date of the first scheduled installment assuming that period
to be one (1) week; and
(ii) if the interval to the final scheduled payment date is a
number of computational periods plus an additional number
of days less than a full week, the additional number of days
shall be considered a computational period only if five (5)
days or more. This subparagraph applies whether or not
subparagraph (i) applies.
(6) If a deferral (IC 24-4.5-2-204) has been agreed to, the
unearned portion of the credit service charge shall be computed
without regard to the deferral. The amount of deferral charge earned
at the date of prepayment shall also be calculated. If the deferral
charge earned is less than the deferral charge paid, the difference
shall be added to the unearned portion of the credit service charge.
If any part of a deferral charge has been earned but has not been paid,
that part shall be subtracted from the unearned portion of the credit
service charge or shall be added to the unpaid balance.
(7) This section does not preclude the collection or retention by
the seller of delinquency charges (IC 24-4.5-2-203, repealed in
1994).
(8) If the maturity is accelerated for any reason and judgment is
obtained, the buyer is entitled to the same rebate as if payment had
been made on the date judgment is entered.
(9) Upon prepayment in full of a consumer credit sale by the
proceeds of consumer credit insurance (IC 24-4.5-4-103), the buyer
or the buyer's estate shall pay the same credit service charge or
receive the same rebate as though the buyer had prepaid the
agreement on the date the proceeds of the insurance are paid to the
seller, but no later than ten (10) business days after satisfactory proof
of loss is furnished to the seller. This subsection applies whether or
not the credit sale is precomputed.
(10) Upon prepayment in full of a transaction with a term of more
than sixty-one (61) months, the unearned part of the credit service
charge shall be computed by applying the disclosed annual
percentage rate that would yield the credit service charge originally
contracted for to the unpaid balances of the amount financed for the
full computational periods following the prepayment, as originally
scheduled or as deferred. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by P.L.14-1992,
SEC.18; P.L.122-1994, SEC.14; P.L.2-1995, SEC.91; P.L.176-1996,
SEC.4.
(Part 3. Disclosure)
IC 24-4.5-2-301 Disclosures required by Federal Consumer Credit Protection Act
Sec. 301. (1) For purposes of this section, "consumer credit sale"
includes the sale of an interest in land which is a first lien mortgage
transaction if the sale is otherwise a consumer credit sale (IC
24-4.5-1-301.5(8)).
(2) The seller shall disclose to the buyer to whom credit is
extended with respect to a consumer credit sale, and the lessor shall
disclose to the lessee with respect to a consumer lease, the
information required by the Federal Consumer Credit Protection Act.
(3) For purposes of subsection (2), disclosures shall not be
required on a consumer credit sale if the transaction is exempt from
the Federal Consumer Credit Protection Act. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by Acts 1981,
P.L.218, SEC.4; P.L.247-1983, SEC.7; P.L.45-1995, SEC.6;
P.L.35-2010, SEC.45.
IC 24-4.5-2-302
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-303
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-304
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-305
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-306
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-307
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-308
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-309
Repealed
(Repealed by P.L.247-1983, SEC.26.) IC 24-4.5-2-310
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-311
Repealed
(Repealed by P.L.247-1983, SEC.26.)
IC 24-4.5-2-312
Repealed
(Repealed by P.L.247-1983, SEC.26.)
(Part 4. Limitations on Agreements and Practices)
IC 24-4.5-2-401 Scope
Sec. 401. Scope _ This Part applies to consumer credit sales and
consumer leases. (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-402 Use of multiple agreements
Sec. 402. Use of Multiple Agreements _ A seller may not use
multiple agreements with intent to obtain a higher credit service
charge than would otherwise be permitted by this Article or to avoid
disclosure of an annual percentage rate pursuant to the provisions on
disclosure and advertising (Part 3). The excess amount of credit
service charge provided for in agreements in violation of this section
is an excess charge for the purposes of the provisions on the effect
of violations on rights of parties (IC 24-4.5-5-202) and the provisions
on civil actions by the department (IC 24-4.5-6-113). (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by P.L.14-1992,
SEC.19.
IC 24-4.5-2-403
Repealed
(Repealed by P.L.122-1994, SEC.122 and P.L.129-1994, SEC.3.)
IC 24-4.5-2-404
Repealed
(Repealed by P.L.45-1995, SEC.33.)
IC 24-4.5-2-405 Balloon payments
Sec. 405. (1) With respect to a consumer credit sale, other than
one pursuant to a revolving charge account or one on which only
credit service charges are payable before the time that the final
scheduled payment is due, if any scheduled payment is more than
twice as large as the average of earlier scheduled payments, the buyer
has the right to refinance the amount of that payment at the time it is
due without penalty. The terms of the refinancing shall be no less
favorable to the buyer than the terms of the original sale. This section
does not apply to the extent that the payment schedule is adjusted to
the seasonal or irregular income of the buyer.
(2) For the purposes of this section, "terms of the refinancing"
means:
(a) in the case of a fixed-rate consumer credit sale, the
individual payment amounts, the charges as a result of default
by the buyer, and the rate of the credit service charge; and
(b) in the case of a variable rate consumer credit sale, the
method used to determine the individual payment amounts, the
charges as a result of default by the buyer, the method used to
determine the rate of the credit service charge, the
circumstances under which the rate of the credit service charge
may increase, and any limitations on the increase in the rate of
the credit service charge. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by
P.L.247-1983, SEC.10.
IC 24-4.5-2-406 Restriction on liability in consumer lease
Sec. 406. The obligation of a lessee upon expiration of a
consumer lease may not exceed three (3) times the average payment
allocable to a monthly period under the lease. This limitation does
not apply to charges for damages to the leased property or for other
default. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by
P.L.247-1983, SEC.11; P.L.45-1995, SEC.7.
IC 24-4.5-2-407 Security interests
Sec. 407. (1) With respect to a consumer credit sale, a seller may
take a security interest in the property sold. In addition, a seller may
take a security interest in goods upon which services are performed
or in which goods sold are installed or to which they are annexed, or
in land to which the goods are affixed or which is maintained,
repaired or improved as a result of the sale of the goods or services,
if, in the case of a subordinate lien mortgage transaction, the debt
secured is one thousand dollars ($1,000) or more, or, in the case of
a security interest in goods the debt secured is three hundred dollars
($300) or more. Except as provided with respect to cross-collateral
(IC 24-4.5-2-408), a seller may not otherwise take a security interest
in property of the buyer to secure the debt arising from a consumer
credit sale.
(2) With respect to a consumer lease, a lessor may not take a
security interest in property of the lessee to secure the debt arising
from the lease.
(3) A security interest taken in violation of this section is void.
(4) The amounts of one thousand dollars ($1,000) and three
hundred dollars ($300) in subsection (1) are subject to change
pursuant to the provisions on adjustment of dollar amounts (IC
24-4.5-1-106). (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by
P.L.247-1983, SEC.12; P.L.35-2010, SEC.46.
IC 24-4.5-2-408 Cross-collateral
Sec. 408. Cross-Collateral _ (1) In addition to contracting for a
security interest pursuant to the provisions on security in sales or
leases (24-4.5-2-407), a seller in a consumer credit sale may secure
the debt arising from the sale by contracting for a security interest in
other property if as a result of a prior sale the seller has an existing
security interest in the other property. The seller may also contract
for a security interest in the property sold in the subsequent sale as
security for the previous debt.
(2) If the seller contracts for a security interest in other property
pursuant to this section, the rate of credit service charge thereafter on
the aggregate unpaid balances so secured may not exceed that
permitted if the balances so secured were consolidated pursuant to
the provisions on consolidation involving a refinancing (subsection
(1) of 24-4.5-2-206). The seller has a reasonable time after so
contracting to make any adjustments required by this section.
"Seller" in this section does not include an assignee not related to the
original seller. (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-409 Debt secured by cross-collateral
Sec. 409. (1) If debts arising from two (2) or more consumer
credit sales, other than sales pursuant to a revolving charge account,
are secured by cross-collateral (IC 24-4.5-2-408) or consolidated into
one (1) debt payable on a single schedule of payments, and the debt
is secured by security interests taken with respect to one (1) or more
of the sales, payments received by the seller after the taking of the
cross-collateral or the consolidation are deemed, for the purpose of
determining the amount of the debt secured by the various security
interests, to have been first applied to the payment of the debts
arising from the sales first made. To the extent debts are paid
according to this section, security interests in items of property
terminate as the debt originally incurred with respect to each item is
paid.
(2) Payments received by the seller upon a revolving charge
account are deemed, for the purpose of determining the amount of
the debt secured by the various security interests, to have been
applied first to the payment of credit service charges in the order of
their entry to the account and then to the payment of debts in the
order in which the entries to the account showing the debts were
made.
(3) If the debts consolidated arose from two (2) or more sales
made on the same day, payments received by the seller are deemed,
for the purpose of determining the amount of the debts secured by
the various security interests, to have been applied first to the
payment of the smallest debt. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by
P.L.247-1983, SEC.13.
IC 24-4.5-2-410 No assignment of earnings
Sec. 410. No Assignment of Earnings _ A seller or lessor may
not take an assignment of earnings of the buyer or lessee for payment
or as security for payment of a claim, whether arising out of a
consumer credit sale, consumer lease or otherwise. An assignment of
earnings in violation of this section is unenforceable by the assignees
of the earnings and revocable by the buyer or lessee. This section
does not prohibit an employee from authorizing deductions from his
earnings if the authorization is revocable and is otherwise permitted
by law. (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-411 Referral sales
Sec. 411. Referral Sales _ With respect to a consumer credit sale
or consumer lease the seller or lessor may not give or offer to give a
rebate or discount or otherwise pay or offer to pay value to the buyer
or lessee as an inducement for a sale or lease in consideration of his
giving to the seller or lessor the names of prospective purchasers or
lessees, or otherwise aiding the seller or lessor in making a sale or
lease to another person, if the earning of the rebate, discount or other
value is contingent upon the occurrence of an event subsequent to the
time the buyer or lessee agrees to buy or lease. If a buyer or lessee is
induced by a violation of this section to enter into a consumer credit
sale or consumer lease, the agreement is unenforceable by the seller
or lessor and the buyer or lessee, at his option, may rescind the
agreement or retain the goods delivered and the benefit of any
services performed, without any obligation to pay for them. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by Acts 1978,
P.L.127, SEC.1.
IC 24-4.5-2-412 Notice of assignment
Sec. 412. Notice of Assignment _ The buyer or lessee is
authorized to pay the original seller or lessor until the buyer or lessee
receives notification of assignment of the rights to payment pursuant
to a consumer credit sale or consumer lease and that payment is to be
made to the assignee. A notification which does not reasonably
identify the rights assigned is ineffective. If requested by the buyer
or lessee, the assignee must seasonably furnish reasonable proof that
the assignment has been made and unless he does so the buyer or
lessee may pay the seller or lessor. (Formerly: Acts 1971, P.L.366, SEC.3.) IC 24-4.5-2-413 Attorney's fees
Sec. 413. Attorney's Fees _ With respect to a consumer credit
sale or consumer lease the agreement may provide for the payment
by the buyer or lessee of reasonable attorney's fees and after default
and referral to an attorney not a salaried employee of the seller, or of
the lessor or his assignee. A provision in violation of this section is
unenforceable. (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-414 Limitation on default charges
Sec. 414. Limitation on Default Charges _ Except for reasonable
expenses incurred in realizing on a security interest, the agreement
with respect to a consumer credit sale may not provide for any
charges as a result of default by the buyer other than those authorized
by this Article. A provision in violation of this section is
unenforceable. (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-415 Authorization to confess judgment prohibited
Sec. 415. Authorization to Confess Judgment Prohibited - A buyer
or lessee may not authorize any person to confess judgment on a
claim arising out of a consumer credit sale or consumer lease. An
authorization in violation of this section is void. (Formerly: Acts 1971, P.L.366, SEC.3.)
IC 24-4.5-2-416
Repealed
(Repealed by P.L.122-1994, SEC.122.)
(Part 5. Home Solicitation Sales)
IC 24-4.5-2-501 "Home solicitation sale"
Sec. 501. Definition: "Home Solicitation Sale" _ "Home
solicitation sale" means a consumer credit sale of goods, other than
farm equipment, or services in which:
(1) the seller or a person acting for him engages in a personal
solicitation of the sale, including a solicitation over the
telephone, at a residence of the buyer and the buyer's agreement
or offer to purchase is there given to the seller or a person
acting for him; or
(2) the seller or his agent, solicits a sale in a city or town in
which the seller does not have a permanent business
establishment, through mailings, advertisements, or telephone
calls, which require the buyer to meet the seller or his agent at
a place other than the seller's permanent business establishment.
It does not include a sale made pursuant to a preexisting revolving
charge account, or a sale made pursuant to prior negotiations
between the parties at a business establishment at a fixed location
where goods or services are offered or exhibited for sale. (Formerly: Acts 1971, P.L.366, SEC.3.) As amended by Acts 1979,
P.L.237, SEC.1.
IC 24-4.5-2-502 Buyer's right to cancel
Sec. 502. Buyer's Right to Cancel _ The requirements of 16 CFR
429 must be met in regard to the following provisions concerning
home solicitation sales:
(1) Period within which cancellation may be made by the buyer.
(2) Notice of cancellation.
(3) Form of cancellation.
(4) Form of agreement or offer to purchase.
(5) Statement of buyer's rights.
(6) Restoration of down payment.
(7) Retention of cancellation fee.
(8) Duty of buyer.
(9) Any other relevant requirements in 16 CFR 429. (Formerly: Acts 1971, P.L.
