IC 28-1-11
Chapter 11. Powers of Banks and Trust Companies
IC 28-1-11-1 Additional rights, privileges, and powers; "bank or trust
company", "bank and trust company", "community based
economic development", and "community development
corporation" defined
Sec. 1. (a) In addition to the general rights, privileges, and powers
conferred by IC 28-1-4 through IC 28-1-9 and subject to the
limitations and restrictions contained in this article and in the articles
of incorporation, every bank or trust company shall possess and may
exercise the rights, privileges, and powers enumerated in this
chapter.
(b) Unless the language used specifically indicates otherwise, the
terms "bank or trust company" and "bank and trust company" as used
in IC 28-1-11 through IC 28-1-20 mean any bank or trust company
organized under this article and any bank of discount and deposit,
loan and trust and safe deposit company, or trust company organized
under any statute enacted prior to February 24, 1933.
(c) As used in this chapter, "community based economic
development" refers to activities that seek to address economic
causes of poverty within specific geographic areas, revitalizing the
economic and social base of low income communities through
activities that include:
(1) affordable housing development;
(2) small business and micro-enterprise support;
(3) commercial, industrial, and retail revitalization, retention,
and expansion;
(4) capacity development and technical assistance support for
community development corporations;
(5) employment and training efforts;
(6) human resource development; and
(7) social service enterprises.
(d) As used in this chapter, "community development corporation"
means a private, nonprofit corporation:
(1) whose board of directors is comprised primarily of
community representatives and business, civic, and community
leaders; and
(2) whose principal purpose includes the provision of:
(A) housing;
(B) community-based economic development projects; and
(C) social services;
that primarily benefit low-income individuals and communities. (Formerly: Acts 1933, c.40, s.170.) As amended by P.L.263-1985,
SEC.58; P.L.3-1990, SEC.101; P.L.14-1992, SEC.80; P.L.42-1993,
SEC.26; P.L.136-1994, SEC.1.
IC 28-1-11-2 Fiscal or transfer agent; transportation agent; insurance producer
or broker; attorney in fact
Sec. 2. Any bank or trust company shall have power to act as
fiscal or transfer agent of the United States or of any state,
municipality, body politic or corporation; and in such capacity to
receive and disburse money; to transfer, register and countersign
certificates of stock, bonds or other evidence of indebtedness; to
authenticate and certify any such bonds and certificates of
indebtedness; to act as agent to buy and sell domestic and foreign
transportation; to solicit and write insurance as an insurance
producer or broker for any insurance company authorized to do
business in the state or states where the insurance producer or broker
operates; and to act as attorney in fact or agent of any person or
corporation, foreign or domestic, for any lawful purpose. (Formerly: Acts 1933, c.40, s.171.) As amended by P.L.188-1997,
SEC.3; P.L.63-2001, SEC.6 and P.L.134-2001, SEC.7;
P.L.178-2003, SEC.89.
IC 28-1-11-2.5 Sale of life insurance policy or annuity contract
Sec. 2.5. (a) A bank or trust company may act as an insurance
producer for the sale of any life insurance policy or annuity contract
issued by a life insurance company authorized to do business in any
state in which the agent operates.
(b) A bank or trust company that acts as an insurance producer for
the sale of a life insurance policy or an annuity contract in Indiana:
(1) is subject to all requirements of IC 27; and
(2) must comply with the disclosure requirements under
IC 27-1-38.
(c) A bank or trust company may not condition:
(1) an extension of credit;
(2) a lease or sale of real or personal property;
(3) the performance of services; or
(4) the amount charged for:
(A) extending credit;
(B) leasing or selling real or personal property; or
(C) performing services;
upon a person's purchase of a life insurance policy or an annuity
contract from the bank or trust company or an affiliate (as defined in
IC 28-2-13-3) of the bank or trust company.
(d) This section does not prohibit a bank or trust company from
requiring that a person, as a condition to a transaction, obtain a life
insurance policy from an insurance company acceptable to the bank
or trust company. As added by P.L.262-1995, SEC.29. Amended by P.L.188-1997,
SEC.4; P.L.130-2002, SEC.5; P.L.192-2003, SEC.2; P.L.178-2003,
SEC.90.
IC 28-1-11-2.6
Repealed
(Repealed by P.L.130-2002, SEC.10.) IC 28-1-11-3
Repealed
(Repealed by Acts 1980, P.L.40, SEC.8.)
IC 28-1-11-3.1 Powers necessary and usual in carrying on banking business;
enumerated powers; community development investments; new
markets tax credit investments
Sec. 3.1. (a) Any bank or trust company shall have the power to
discount, negotiate, sell and guarantee promissory notes, bonds,
drafts, acceptances, bills of exchange, and other evidences of debt;
to buy and sell, exchange, coin and bullion; to loan money; to borrow
money and to issue its notes, bonds, or debentures to evidence any
such borrowing and to mortgage, pledge, or hypothecate any of its
assets to secure the repayment thereof; to receive savings deposits
and deposits of money subject to check, and deposits of securities or
other personal property from any person or corporation, upon such
terms as may be agreed upon by the parties; to contract for and
receive on loans and discounts the highest rate of interest allowed by
the laws of this state to be contracted for and received by individuals;
to accept, for payment at a future date, drafts drawn upon it by its
customers and to issue letters of credit authorizing the holders
thereof to draw drafts upon it or its correspondents at sight or on
time, however, the letter of credit must state a specific expiration
date; and to exercise all the powers incidental and proper or which
may be necessary and usual in carrying on a general banking
business, but it shall have no right to issue bills to circulate as
money.
(b) Subject to such regulations as the department finds to be
necessary and proper, any bank or trust company shall have the
following powers:
(1) To make such loans and advances of credit and purchases of
obligations representing loans and advances of credit as are
eligible for insurance by the federal housing administrator, and
to obtain such insurance.
(2) To make such loans secured by mortgages on real property
or leasehold, as the federal housing administrator insures or
makes a commitment to insure, and to obtain such insurance.
(3) To purchase, invest in, and dispose of notes or bonds
secured by mortgage or trust deed insured by the federal
housing administrator or debentures issued by the federal
housing administrator, or bonds or other securities issued by
national mortgage associations.
(4) To extend credit to any state agency, with the approval of
the department, notwithstanding any other provisions or
limitations of IC 28-1. No law of this state prescribing the
nature, amount, or form of security or requiring security upon
which loans or advances of credit may be made, or prescribing
or limiting interest rates upon loans or advances of credit, or
prescribing or limiting the period for which loans or advances
of credit may be made, shall be deemed to apply to loans,
advances of credit, or purchases made pursuant to subdivisions
(1), (2), and (3) and this subdivision.
(5) To purchase, take, hold, and dispose of notes, and mortgages
securing such notes, made to any joint stock land bank
heretofore incorporated, in any case in which not less than
ninety-nine percent (99%) of the stock of said joint stock land
bank is owned by the bank or trust company at the time such
notes or mortgages be acquired by the bank or trust company;
and upon dissolution of any such joint stock land bank, or at
any stage in the process of such dissolution, any bank or trust
company then owning not less than ninety-nine percent (99%)
of the stock of such joint stock land bank may take, hold, and
dispose of any notes, mortgages, or other assets of such joint
stock land bank of whatsoever nature, including real estate,
wheresoever situated, which such joint stock land bank shall
assign, transfer, convey, or otherwise make over to such bank
or trust company by way of final or partial distribution of its
assets to its stockholders upon such dissolution or in connection
with the process of such dissolution. No law of this state
prescribing the nature, amount, location, or form of security, or
requiring security upon which loans or advances of credit may
be made, or prescribing or limiting interest rates upon loans or
advances of credit, or prescribing or limiting the period for
which loan or advances of credit may be made, or prescribing
any ratio between the amount of any loan and the appraised
value of the security for such loan, or requiring periodical
reductions of the principal of any loan, shall be deemed to apply
to loans, notes, mortgages, real estate, or other assets mentioned
in this subdivision.
(6) To adopt stock purchase programs for employees and to
grant options to purchase, and to issue and sell, shares of its
capital stock to its employees, or to a trustee on their behalf
(which may be the bank or trust company issuing such capital
stock), without first offering the same to its shareholders, for
such consideration, not less than par value, and upon such terms
and conditions as shall be approved by its board of directors and
by the holders of a majority of its shares entitled to vote with
respect thereto, and by the department. In the absence of actual
fraud in the transaction, the judgment of the directors as to the
consideration for the issuances of such options and the
sufficiency thereof shall be conclusive. Any bank or trust
company exercising the powers granted in this subsection may,
to the extent approved by the department, have authorized and
unissued stock required to fulfill any stock option or other
arrangement authorized herein.
(7) Subject to such restrictions as the department may impose,
to become the owner or lessor of personal or real property
acquired upon the request and for the use of a customer and to
incur such additional obligations as may be incident to
becoming an owner or lessor of such property.
(8) To purchase or construct buildings and hold legal title
thereto to be leased to municipal corporations or other public
authorities, for public purposes, having resources sufficient to
make payment of all rentals as they become due. Each lease
agreement shall provide that upon expiration, the lessee will
become the owner of the building.
(8.1) Subject to the prior written approval of the department,
and notwithstanding section 5 of this chapter, to purchase, hold,
and convey real estate which is:
(A) improved or to be improved by a single, freestanding
building; and
(B) to be used, in part, as a branch or the principal office of
that bank or trust company and, in part, as rental property for
one (1) or more lessees.
Unless a written extension of time is given by the department,
the bank or trust company shall open the branch or principal
office within two (2) years from the acquisition date of the real
estate. If the bank or trust company does not open a branch or
its principal office on the real estate in that time period or if the
bank or trust company removes its branch or principal office
from the real estate, the bank or trust company shall divest itself
of all interest in the real estate within five (5) years from the
acquisition date of the real estate, if a branch was not opened,
or five (5) years from the removal date of the branch office,
whichever applies. Except with the written approval of the
department, the sum invested in real estate and buildings used
for the convenient transaction of its business as provided in this
subdivision shall not exceed fifty percent (50%) of the capital
and surplus of the bank or trust company as provided in section
5 of this chapter.
(9) Except as provided in subsections (c) and (d), and subject to
subsection (e), to invest directly or indirectly in community
development corporations and projects of a predominantly
civic, community, or public nature, including equity
investments in corporations, limited partnerships, limited
liability companies, or other entities organized for such
purposes. Investments by a bank or trust company under this
subdivision may not exceed:
(A) in any one (1) project, two percent (2%); and
(B) in the aggregate, five percent (5%);
of the capital and surplus of the bank or trust company. As used
in this subdivision and in subsection (c), "capital and surplus"
has the meaning set forth in IC 28-1-1-3(10).
(10) Subject to section 3.2 of this chapter, to exercise the rights
and privileges (as defined in section 3.2(a) of this chapter) that
are or may be granted to national banks domiciled in Indiana.
(c) Investments by a bank or trust company under subsection
(b)(9) may exceed the limit set forth in subsection (b)(9)(B) if the
director determines that:
(1) the aggregate investments by the bank or trust company
under subsection (b)(9) in excess of five percent (5%) of the
capital and surplus of the bank or trust company will not pose
a significant risk to the affected deposit insurance fund; and
(2) the bank or trust company is adequately capitalized.
However, in no case shall the aggregate investments by a bank or
trust company under subsection (b)(9) exceed ten percent (10%) of
the capital and surplus of the bank or trust company.
(d) Investments by a bank or trust company under subsection
(b)(9) in equity investments qualifying for the new markets tax
credits under 26 U.S.C. 45D or other programs approved by the
director:
(1) are not subject to the limit set forth in subsection (b)(9)(A);
and
(2) may exceed the limit set forth in subsection (b)(9)(B) if the
director determines that:
(A) the aggregate equity investments qualifying for the new
markets tax credit or other programs that are:
(i) made by the bank or trust company under subsection
(b)(9); and
(ii) in excess of five percent (5%) of the capital and
surplus of the bank or trust company;
will not pose a significant risk to the affected deposit
insurance fund; and
(B) the bank or trust company is adequately capitalized.
However, in no case shall the aggregate equity investments
qualifying for the new markets tax credit or other programs and
made by a bank or trust company exceed fifteen percent (15%)
of the capital and surplus of the bank or trust company.
(e) A bank or trust company shall not make any investment under
subsection (b)(9) if the investment would expose the bank or trust
company to unlimited liability.
(f) Any rule made and promulgated under and pursuant to this
section may apply to one (1) or more banks or trust companies or to
one (1) or more localities in the state as the department, in its
discretion, may determine. As added by Acts 1980, P.L.40, SEC.7. Amended by P.L.33-1991,
SEC.14; P.L.14-1992, SEC.81; P.L.136-1994, SEC.2; P.L.176-1996,
SEC.11; P.L.194-1997, SEC.1; P.L.215-1999, SEC.2; P.L.10-2006,
SEC.30 and P.L.57-2006, SEC.30; P.L.213-2007, SEC.38;
P.L.217-2007, SEC.36; P.L.35-2010, SEC.116.
IC 28-1-11-3.2 Request to exercise rights and privileges granted to national bank;
procedures; appeal
Sec. 3.2. (a) As used in this section, "rights and privileges" means
the power:
(1) to:
(A) create;
(B) deliver;
(C) acquire; or
(D) sell;
a product, a service, or an investment that is available to or
offered by; or
(2) to engage in mergers, consolidations, reorganizations, or
other activities or to exercise other powers authorized for;
national banks domiciled in Indiana.
(b) A bank that intends to exercise any rights and privileges that
are:
(1) granted to national banks; but
(2) not authorized for banks under the Indiana Code (except for
this section) or any rule adopted under the Indiana Code;
shall submit a letter to the department describing in detail the
requested rights and privileges granted to national banks that the
bank intends to exercise. If available, copies of relevant federal law,
regulations, and interpretive letters must be attached to the letter
submitted by the bank.
(c) The department shall promptly notify the requesting bank of
the department's receipt of the letter submitted under subsection (b).
Except as provided in subsection (e), the bank may exercise the
requested rights and privileges sixty (60) days after the date on which
the department receives the letter unless otherwise notified by the
department.
(d) The department may deny the requested rights and privileges
if the department finds that:
(1) national banks domiciled in Indiana do not possess the
requested rights and privileges;
(2) the exercise of the requested rights and privileges by the
bank would adversely affect the safety and soundness of the
bank;
(3) the exercise of the requested rights and privileges by the
bank would result in an unacceptable curtailment of consumer
protection; or
(4) the failure of the department to approve the requested rights
and privileges will not result in a competitive disadvantage to
the bank.
(e) The sixty (60) day period referred to in subsection (c) may be
extended by the department based on a determination that the bank's
letter raised issues requiring additional information or additional
time for analysis. If the sixty (60) day period is extended under this
subsection, the bank may exercise the requested rights and privileges
only if the bank receives prior written approval from the department.
However:
(1) the department must:
(A) approve or deny the requested rights and privileges; or
(B) convene a hearing;
not later than sixty (60) days after the department receives the
bank's letter; and
(2) if a hearing is convened, the department must approve or
deny the requested rights and privileges not later than sixty (60)
days after the hearing is concluded.
(f) The exercise of rights and privileges by a bank in compliance
with and in the manner authorized by this section is not a violation
of any provision of the Indiana Code or rules adopted under
IC 4-22-2.
(g) If a bank receives approval to exercise the requested rights and
privileges granted to national banks domiciled in Indiana, the
department shall determine by order whether all banks may exercise
the same rights and privileges. In making the determination required
by this subsection, the department must ensure that the exercise of
the rights and privileges by all banks will not:
(1) adversely affect their safety and soundness; or
(2) unduly constrain Indiana consumer protection provisions.
(h) If the department denies the request of a bank under this
section to exercise any rights and privileges that are granted to
national banks, the bank may appeal the decision of the department
to the circuit court with jurisdiction in the county in which the
principal office of the bank is located. In an appeal under this
section, the court shall determine the matter de novo. As added by P.L.194-1997, SEC.2. Amended by P.L.73-2004,
SEC.34; P.L.213-2007, SEC.39; P.L.217-2007, SEC.37;
P.L.35-2010, SEC.117.
IC 28-1-11-4 Investment securities
Sec. 4. (a) Except as otherwise provided in this article, the
business of dealing in investment securities by any bank or trust
company is limited to purchasing and selling securities without
recourse, solely upon the order and for the account of customers and
in no event for its own account. A bank or trust company may not
underwrite or guarantee all or any part of any issue of securities other
than obligations issued or guaranteed by or on behalf of the state or
any political subdivision of the state or any agency or instrumentality
of either. A bank or trust company may purchase for its own account
and sell investment securities under such limitations and restrictions
as the department prescribes by rule, but in no event may the total
amount of the investment securities of any one (1) obligor or maker,
purchased or held by a bank or trust company for its own account,
exceed at any time ten percent (10%) of the amount of the total
equity capital of the bank or trust company. The limitations imposed
by this section do not apply to the direct or indirect obligations of the
United States or the direct obligations of a United States territory or
insular possession or of the state of Indiana or any municipal
corporation or taxing district in Indiana. A bank or trust company
may purchase for its own account and sell shares of stock in federal
or state chartered small business investment companies that have
received a permit or license to operate under the federal Small
Business Investment Act (15 U.S.C. 681). However, a bank or trust
company may not acquire shares in any small business investment
company if, upon the making of that acquisition, the aggregate
amount of shares in small business investment companies then held
by the bank would exceed five percent (5%) of its total equity
capital.
(b) A bank or trust company may purchase for its own account
and sell:
(1) shares of open-end investment companies the portfolios of
which consist solely of securities that are eligible for purchase
and sale by national banking associations; and
(2) collateralized obligations that are eligible for purchase and
sale by national banking associations. However, a bank or trust
company may purchase for its own account and sell the
obligations only to the extent that a national banking association
can purchase and sell those obligations.
(c) A bank or trust company may deposit its funds in:
(1) a federally chartered savings association; or
(2) a savings association or other entity organized and operated
according to federal law or the laws of any state or the District
of Columbia;
the accounts of which are insured by the Saving Association
Insurance Fund of the Federal Deposit Insurance Corporation.
(d) A bank or trust company may not purchase for its own account
any bond, note, or other evidence of indebtedness that is commonly
designated as a security that is speculative in character or that has
speculative characteristics. For the purposes of this subsection, a
security is speculative or has speculative characteristics if at the time
of purchase the security:
(1) is rated below the first four (4) rating classes by a generally
recognized security rating service; or
(2) is in default.
(e) A bank or trust company may purchase for its own account a
security that is not rated by a generally recognized security rating
service if the bank or trust company at the time of purchase obtains
financial information that is adequate to document the investment
quality of the security.
(f) Except as otherwise authorized by this title, a bank or trust
company may not purchase any share of stock of a corporation that
is not a subsidiary of that bank or trust company unless the purchase
is considered expedient to prevent loss from a debt previously
contracted in good faith. Any shares of stock thus acquired by a bank
or trust company that would not have been eligible for purchase shall
be sold and disposed of within six (6) months from the date of
acquisition unless the director grants an extension of time for the sale
and disposition.
(g) Notwithstanding any other provision of this article, a bank or
trust company may purchase for its own account shares of stock of
a banker's bank insured by the Bank Insurance Fund of the Federal
Deposit Insurance Corporation or a holding company that owns or
controls a banker's bank insured by the Bank Insurance Fund of the
Federal Deposit Insurance Corporation. For the purposes of this
subsection, a "banker's bank" is a bank (as defined in IC 28-2-14-2):
(1) the stock of which is owned exclusively by other banks (as
defined in IC 28-2-14-2), or by a bank holding company the
stock of which is owned exclusively by other banks (as defined
in IC 28-2-14-2); and
(2) that is engaged exclusively in providing services to other
banks (as defined in IC 28-2-14-2), and to their officers,
directors, and employees.
A bank's or trust company's holdings of the stock of an insured
banker's bank or of a holding company that owns or controls an
insured banker's bank may not exceed ten percent (10%) of the
capital and surplus of the bank or trust company. A bank or trust
company may not purchase the stock of an insured banker's bank or
of a holding company that owns or controls an insured banker's bank
if, after the purchase, the bank or trust company would own more
than five percent (5%) of any class of voting securities of the
banker's bank or holding company.
(h) Notwithstanding any other provision of this article, a bank or
trust company may invest in a casualty insurance company organized
solely for the purpose of insuring banks, trust companies, and bank
holding companies and their officers and directors from and against
liabilities, including those covered by bankers' blanket bonds and
director and officer liability insurance and other public liability
insurance. The investment must take the form of:
(1) the purchase for the bank's or trust company's own account
of shares of stock of the casualty insurance company or shares
of stock of an association of banks organized for the purpose of
funding the casualty insurance company; or
(2) loans to such an association of banks.
The total investment of any bank or trust company under this
subsection may not exceed five percent (5%) of the capital and
surplus of the bank or trust company.
(i) Any bank or trust company may establish or acquire a
subsidiary that engages in:
(1) the sale, distribution, or underwriting of securities issued by
investment companies (as defined in Section 3 of the
Investment Company Act of 1940 (15 U.S.C. 80a-3); or
(2) the underwriting or distribution of securities backed by or
representing an interest in mortgages.
(j) As used in this section, "total equity capital" means unimpaired
capital stock, unimpaired surplus, unimpaired undivided profits,
subordinated debt that has been approved by the state or federal
regulatory agencies, and one hundred percent (100%) of loan
reserves.
(k) The department may define an investment security by
department policy or by rule.
(l) A bank or trust company may establish a trading account for
the purchase and resale of securities that are otherwise eligible for
purchase or resale by the bank or trust company. The trading account
must comply with the requirements established by policy or rule of
the department.
(m) A bank or trust company that purchases a security for its own
account shall maintain sufficient records of the security to allow the
security to be properly identified by the department for examination
purposes. (Formerly: Acts 1933, c.40, s.173; Acts 1935, c.5, s.26; Acts 1937,
c.33, s.18; Acts 1959, c.125, s.1; Acts 1965, c.356, s.10; Acts 1967,
c.260, s.11; Acts 1971, P.L.394, SEC.28.) As amended by
P.L.141-1984, SEC.7; P.L.265-1985, SEC.2; P.L.169-1986, SEC.1;
P.L.36-1987, SEC.8; P.L.165-1988, SEC.1; P.L.164-1988, SEC.3;
P.L.8-1991, SEC.11; P.L.42-1993, SEC.27; P.L.176-1996, SEC.12;
P.L.192-1997, SEC.4; P.L.79-1998, SEC.44; P.L.192-2003, SEC.3.
IC 28-1-11-5 Real estate
Sec. 5. (a) Any bank or trust company shall have power to
purchase, hold, and convey real estate for the following purposes,
and for no others:
(1) Such as shall be necessary for the convenient transaction of
its business.
(2) Such as shall be mortgaged to it or to its assignor immediate
or remote, in good faith by way of security for debts.
(3) Such as shall be conveyed to it in satisfaction of debts
contracted in the course of its dealings, or in satisfaction of
debts, notes, or mortgages purchased by or assigned to it, or in
exchange for real estate so conveyed to it.
(4) Such as it shall purchase at sales under judgments, decrees,
or mortgages held by the bank or trust company or shall
purchase to secure debts due it.
(b) Except with the approval in writing of the department, after
July 1, 1933, the sum invested in real estate and buildings used for
the convenient transaction of its business shall not exceed fifty
percent (50%) of the capital and surplus of such bank or trust
company. Such investment may be made in the stock of a corporation
organized to own and hold the real estate and building occupied and
used wholly or in part by such bank or trust company.
(c) No bank or trust company shall hold the title or possession of
any real estate purchased or otherwise acquired to secure any debts
due to it for a longer period than ten (10) years after such real estate
is or has been purchased or otherwise acquired, or after July 1, 1933,
without the consent in writing of the department.
(d) For the purposes of subsection (a)(1), real estate purchased or
held for the convenient transaction of the business of a bank or trust
company includes the following:
(1) Real estate on which the principal office or a branch office
of the bank or trust company is located.
(2) Real estate that is the location of facilities supporting the
operations of the bank or trust company, such as parking
facilities, data processing centers, loan production offices,
automated teller machines, night depositories, facilities
necessary for the operations of a bank or trust company
subsidiary, or other facilities that are approved by the director.
(3) Real estate that the board of directors of the bank or trust
company expects, in good faith, to use as a bank or trust
company office or facility in the future.
(e) If real estate referred to in subsection (d)(3) is held by a bank
or trust company for one (1) year without being used as a bank or
trust company office or facility, the board of directors of the bank or
trust company shall state, by resolution, definite plans for the use of
the real estate. A resolution adopted under this subsection shall be
made available for inspection by the department.
(f) Real estate referred to in subsection (d)(3) may not be held by
a bank or trust company for more than three (3) years without being
used as a bank or trust company office or facility unless:
(1) the board of directors of the bank or trust company, by
resolution:
(A) reaffirms annually that the bank or trust company
expects to use the real estate as a bank or trust company
office or facility in the future; and
(B) explains the reason why the real estate has not yet been
used as a bank or trust company office or facility; and
(2) the director determines that:
(A) the continued holding of the real estate by the bank or
trust company does not endanger the safety and soundness
of the bank or trust company; and
(B) the bank or trust company is holding the real estate to
use the real estate in the future for one (1) of the purposes
set forth in subsection (d)(1) and (d)(2).
(g) Real estate referred to in subsection (d)(3) may not be held by
a bank or trust company for more than ten (10) years without being
used as a bank or trust company office or facility unless the
department consents in writing to the continued holding of the real
estate by the bank or trust company. (Formerly: Acts 1933, c.40, s.174; Acts 1935, c.5, s.27; Acts 1943,
c.86, s.1; Acts 1959, c.39, s.1; Acts 1965, c.356, s.11; Acts 1967,
c.260, s.12.) As amended by P.L.263-1985, SEC.59; P.L.14-1992,
SEC.82; P.L.213-2007, SEC.40; P.L.217-2007, SEC.38.
IC 28-1-11-6 Appointment as fiduciary
Sec. 6. Any bank or trust company may be appointed and act
under the order of appointment of any court of competent jurisdiction
as commissioner for the sale of real estate, guardian of the person
and estate of persons under the age of eighteen (18) years, and
incapacitated persons (as defined in IC 29-3-1-7.5), or as trustee,
receiver, conservator, or committee of the property or estate of a
person, corporation, or company, in insolvency or bankruptcy
proceedings, or as depository of money paid into court, whether for
the benefit of a person, regardless of age, corporation, or party, and
in any other fiduciary capacity. (Formerly: Acts 1933, c.40, s.175; Acts 1973, P.L.280, SEC.3.) As
amended by P.L.33-1989, SEC.27.
IC 28-1-11-7 Testamentary and probate fiduciary appointments
Sec. 7. Any bank or trust company shall have power to be
appointed and to accept the appointment and act as executor or
trustee under the last will and testament, or as administrator, with or
without the will annexed, of the estate of any deceased person, and
to be appointed and to act under the order of appointment of any
court of competent jurisdiction as executor of or trustee under any
last will and testament, whenever it shall be the successor to any
corporation appointed in such last will and testament, whether such
succession is the result of merger, consolidation or otherwise.
Whenever a natural person is appointed with such corporation in any
appointment as receiver, guardian, commissioner, trustee, executor,
administrator with or without the will annexed, his appointment may
be under such limitation of powers, and upon such terms and
conditions as to the possession and control of the trust assets by such
corporation, or otherwise, and as to the bond or security, if any, to be
given by him, as the person appointed and such corporation may
agree and the court or judge making the appointment shall approve.
Whenever any natural person who is appointed in any fiduciary
capacity is required to give a bond or security for the faithful
performance of his duties, such corporation shall have the power and
authority to guarantee or become surety for such natural person if
such corporation shall take possession and control of the assets
belonging to any such estate or other fiduciary relationship, and if
approved by the court having jurisdiction of the fiduciary. (Formerly: Acts 1933, c.40, s.176.)
IC 28-1-11-8 Appointment as successor guardian, trustee, executor, or
administrator
Sec. 8. Any bank or trust company shall have power to be
appointed and to act under the order of appointment of any court of
competent jurisdiction as guardian, trustee, executor or
administrator, with or without the will annexed, on the application or
consent of any person acting as such or entitled to such appointment
and in the place and stead of such person, but such appointment shall
be made upon such notice as is required by law to the persons
interested in the estate or fund and on the consent of such of the
principal beneficiaries or other persons interested in the estate or
fund as the court or judge thereof making the appointment shall deem
proper. (Formerly: Acts 1933, c.40, s.177.)
IC 28-1-11-9 Trust business
Sec. 9. Any bank or trust company shall have power to take,
accept and execute any and all legal trusts, duties, and powers in
regard to the holding, management, sale and disposition of any
property or estate, real or personal, wherever located, and the rents
and profits thereof, which may be granted or confided to it by any
court of competent jurisdiction, or by any person, corporation,
municipality or other authority; to take, accept and execute any and
all trusts and powers of whatsoever nature or description which may
be conferred upon or entrusted or submitted to it by any person, firm,
company, or any body politic, corporation, foreign or domestic, or
other authority, by grant, assignment, transfer, devise, bequest or
otherwise, or which may be entrusted or committed or transferred to
it or vested in it by order of any court of competent jurisdiction; and
generally to execute trusts of every description not inconsistent with
the laws of this state or of the United States. (Formerly: Acts 1933, c.40, s.178.)
IC 28-1-11-10 Service as fiduciary without bond; judicial control; requirement of
security
Sec. 10. Except as otherwise provided in this chapter, any bank or
trust company shall have power to act in each and every fiduciary
capacity permitted by the terms of this article, and as commissioner
for the sale of real estate, without bond or other security, and
administer oaths attested by the signature of its secretary or cashier
and its seal wherever it is acting in any such fiduciary capacity and
whenever an individual acting in the same capacity is authorized by
law to administer oaths. The court having jurisdiction of the
fiduciary at any time, whether before or after acceptance of any
fiduciary appointment, may require a bond or other security, and
upon failure of such corporation to give a bond or security as
required, may remove such corporation and revoke its appointment.
No bank or trust company shall pledge or deposit any of its assets as
a condition to the exercise of any of its powers as a fiduciary. (Formerly: Acts 1933, c.40, s.179.) As amended by P.L.263-1985,
SEC.60.
IC 28-1-11-11 Safe deposits and escrows
Sec. 11. Any bank or trust company shall have power to receive,
upon terms and conditions to be prescribed by such corporation, not
inconsistent with the provisions of this section, upon deposit for
safe-keeping, or in escrow, moneys, bonds, mortgages, jewelry, plate,
stock, securities and valuable papers of any kind, and other personal
property for hire, and to rent or lease receptacles for safe deposits of
personal property. No bank or trust company nor any of the assets
thereof shall be liable, for the value of any property received by it
pursuant to the power conferred by this section nor for damages for
the loss, theft or misappropriation thereof. Any bank or trust
company may procure and carry a policy or policies of insurance for
the benefit of the owners of any property received by it pursuant to
the power conferred by this section.
(Formerly: Acts 1933, c.40, s.180.)
IC 28-1-11-12 Federal reserve system and federal deposit insurance corporation
membership; federal securities
Sec. 12. Every bank or trust company shall have power:
(1) to purchase and hold for the purpose of becoming a member
of the federal reserve system:
(A) so much of the capital stock of a federal reserve bank as
shall qualify it for membership, pursuant to the Federal
Reserve Act (12 U.S.C. 221 et seq.); and
(B) so much of the capital stock of the Federal Deposit
Insurance Corporation as will qualify it for membership,
pursuant to the Federal Deposit Insurance Act (12 U.S.C.
1811 through 1833e);
(2) to do anything necessary or appropriate to acquire and
maintain insurance of its deposits in accordance with the
provisions of any federal law in force on or after July 1, 1933;
(3) to become a member of the federal reserve system; and
(4) to have and exercise all powers, not in conflict with the laws
of this state, which are conferred upon any such member by the
Federal Reserve Act. With the express approval of the
department, and except as otherwise provided in this chapter,
any bank or trust company shall have the power to purchase and
hold shares of the capital stock, bonds, notes, debentures, or any
other securities or obligations issued at any time by any agency
or instrumentality of the federal government. After July 1, 1933,
no bank or trust company shall purchase the capital stock of any
joint stock land bank organized pursuant to 12 U.S.C. 2001
through 2279aa-14 and hold the stock so purchased in an
amount in excess of ten percent (10%) of the capital and surplus
of such bank or trust company. (Formerly: Acts 1933, c.40, s.181; Acts 1935, c.5, s.28; Acts 1937,
c.33, s.19.) As amended by P.L.263-1985, SEC.61; P.L.8-1991,
SEC.12; P.L.42-1993, SEC.28; P.L.213-2007, SEC.41;
P.L.217-2007, SEC.39.
IC 28-1-11-12.5 Federal home loan bank; investments; membership; loans;
transfer, assignment, and pledge of bonds, notes, contracts,
mortgages, securities, and other property
Sec. 12.5. Subject to any limitations imposed by the department
through policy, a bank or trust company may do any of the following:
(1) Invest the money deposited in the bank or trust company in
the shares of the capital stock, bonds, debentures, notes, or
other obligations of a federal home loan bank of the United
States.
(2) Become a member of the federal home loan bank of the
district in which Indiana is located or an adjoining district.
(3) Borrow money from:
(A) a federal home loan bank described in subdivision (2);
(B) the Federal Deposit Insurance Corporation; or
(C) any other corporation.
(4) Transfer, assign to, and pledge with a federal home loan
bank described in subdivision (2), the Federal Deposit
Insurance Corporation, or other corporation any of the bonds,
notes, contracts, mortgages, securities, or any other property of
the bank or trust company held or acquired as security for the
payment of loans entered into under subdivision (3).
(5) Exercise all rights, powers, and privileges conferred upon,
and do all things and perform all acts required of, members or
shareholders of a federal home loan bank by the Federal Home
Loan Bank Act (12 U.S.C. 1421 through 1449). As added by P.L.258-2003, SEC.5.
IC 28-1-11-13 Compensation for services
Sec. 13. Any bank or trust company shall have power to demand
and receive for the faithful performance and discharge of services
performed pursuant to the powers vested in it by this article
reasonable compensation, or such compensation as shall have been
fixed by agreement of the parties, together with any and all advances
necessarily paid out and expended in the discharge and performance
of its duties, and unless otherwise agreed upon, interest at the legal
rate on such advances. No compensation or commission paid or
agreed to be paid for the negotiation of any loan or the execution of
any trust by any such corporation shall be deemed to be interest
within the meaning of any law of this state, nor shall any excess
thereof over any rate of interest permitted by the laws of this state be
decreed or held to be usury in any court of law or equity. The
advances contemplated in this section may include the compensation
paid for the employment of legal services when necessary for the
protection of any trust or other fiduciary relation. (Formerly: Acts 1933, c.40, s.182.) As amended by P.L.263-1985,
SEC.62.
IC 28-1-11
Chapter 11. Powers of Banks and Trust Companies
IC 28-1-11-1 Additional rights, privileges, and powers; "bank or trust
company", "bank and trust company", "community based
economic development", and "community development
corporation" defined
Sec. 1. (a) In addition to the general rights, privileges, and powers
conferred by IC 28-1-4 through IC 28-1-9 and subject to the
limitations and restrictions contained in this article and in the articles
of incorporation, every bank or trust company shall possess and may
exercise the rights, privileges, and powers enumerated in this
chapter.
(b) Unless the language used specifically indicates otherwise, the
terms "bank or trust company" and "bank and trust company" as used
in IC 28-1-11 through IC 28-1-20 mean any bank or trust company
organized under this article and any bank of discount and deposit,
loan and trust and safe deposit company, or trust company organized
under any statute enacted prior to February 24, 1933.
(c) As used in this chapter, "community based economic
development" refers to activities that seek to address economic
causes of poverty within specific geographic areas, revitalizing the
economic and social base of low income communities through
activities that include:
(1) affordable housing development;
(2) small business and micro-enterprise support;
(3) commercial, industrial, and retail revitalization, retention,
and expansion;
(4) capacity development and technical assistance support for
community development corporations;
(5) employment and training efforts;
(6) human resource development; and
(7) social service enterprises.
(d) As used in this chapter, "community development corporation"
means a private, nonprofit corporation:
(1) whose board of directors is comprised primarily of
community representatives and business, civic, and community
leaders; and
(2) whose principal purpose includes the provision of:
(A) housing;
(B) community-based economic development projects; and
(C) social services;
that primarily benefit low-income individuals and communities. (Formerly: Acts 1933, c.40, s.170.) As amended by P.L.263-1985,
SEC.58; P.L.3-1990, SEC.101; P.L.14-1992, SEC.80; P.L.42-1993,
SEC.26; P.L.136-1994, SEC.1.
IC 28-1-11-2 Fiscal or transfer agent; transportation agent; insurance producer
or broker; attorney in fact
Sec. 2. Any bank or trust company shall have power to act as
fiscal or transfer agent of the United States or of any state,
municipality, body politic or corporation; and in such capacity to
receive and disburse money; to transfer, register and countersign
certificates of stock, bonds or other evidence of indebtedness; to
authenticate and certify any such bonds and certificates of
indebtedness; to act as agent to buy and sell domestic and foreign
transportation; to solicit and write insurance as an insurance
producer or broker for any insurance company authorized to do
business in the state or states where the insurance producer or broker
operates; and to act as attorney in fact or agent of any person or
corporation, foreign or domestic, for any lawful purpose. (Formerly: Acts 1933, c.40, s.171.) As amended by P.L.188-1997,
SEC.3; P.L.63-2001, SEC.6 and P.L.134-2001, SEC.7;
P.L.178-2003, SEC.89.
IC 28-1-11-2.5 Sale of life insurance policy or annuity contract
Sec. 2.5. (a) A bank or trust company may act as an insurance
producer for the sale of any life insurance policy or annuity contract
issued by a life insurance company authorized to do business in any
state in which the agent operates.
(b) A bank or trust company that acts as an insurance producer for
the sale of a life insurance policy or an annuity contract in Indiana:
(1) is subject to all requirements of IC 27; and
(2) must comply with the disclosure requirements under
IC 27-1-38.
(c) A bank or trust company may not condition:
(1) an extension of credit;
(2) a lease or sale of real or personal property;
(3) the performance of services; or
(4) the amount charged for:
(A) extending credit;
(B) leasing or selling real or personal property; or
(C) performing services;
upon a person's purchase of a life insurance policy or an annuity
contract from the bank or trust company or an affiliate (as defined in
IC 28-2-13-3) of the bank or trust company.
(d) This section does not prohibit a bank or trust company from
requiring that a person, as a condition to a transaction, obtain a life
insurance policy from an insurance company acceptable to the bank
or trust company. As added by P.L.262-1995, SEC.29. Amended by P.L.188-1997,
SEC.4; P.L.130-2002, SEC.5; P.L.192-2003, SEC.2; P.L.178-2003,
SEC.90.
IC 28-1-11-2.6
Repealed
(Repealed by P.L.130-2002, SEC.10.) IC 28-1-11-3
Repealed
(Repealed by Acts 1980, P.L.40, SEC.8.)
IC 28-1-11-3.1 Powers necessary and usual in carrying on banking business;
enumerated powers; community development investments; new
markets tax credit investments
Sec. 3.1. (a) Any bank or trust company shall have the power to
discount, negotiate, sell and guarantee promissory notes, bonds,
drafts, acceptances, bills of exchange, and other evidences of debt;
to buy and sell, exchange, coin and bullion; to loan money; to borrow
money and to issue its notes, bonds, or debentures to evidence any
such borrowing and to mortgage, pledge, or hypothecate any of its
assets to secure the repayment thereof; to receive savings deposits
and deposits of money subject to check, and deposits of securities or
other personal property from any person or corporation, upon such
terms as may be agreed upon by the parties; to contract for and
receive on loans and discounts the highest rate of interest allowed by
the laws of this state to be contracted for and received by individuals;
to accept, for payment at a future date, drafts drawn upon it by its
customers and to issue letters of credit authorizing the holders
thereof to draw drafts upon it or its correspondents at sight or on
time, however, the letter of credit must state a specific expiration
date; and to exercise all the powers incidental and proper or which
may be necessary and usual in carrying on a general banking
business, but it shall have no right to issue bills to circulate as
money.
(b) Subject to such regulations as the department finds to be
necessary and proper, any bank or trust company shall have the
following powers:
(1) To make such loans and advances of credit and purchases of
obligations representing loans and advances of credit as are
eligible for insurance by the federal housing administrator, and
to obtain such insurance.
(2) To make such loans secured by mortgages on real property
or leasehold, as the federal housing administrator insures or
makes a commitment to insure, and to obtain such insurance.
(3) To purchase, invest in, and dispose of notes or bonds
secured by mortgage or trust deed insured by the federal
housing administrator or debentures issued by the federal
housing administrator, or bonds or other securities issued by
national mortgage associations.
(4) To extend credit to any state agency, with the approval of
the department, notwithstanding any other provisions or
limitations of IC 28-1. No law of this state prescribing the
nature, amount, or form of security or requiring security upon
which loans or advances of credit may be made, or prescribing
or limiting interest rates upon loans or advances of credit, or
prescribing or limiting the period for which loans or advances
of credit may be made, shall be deemed to apply to loans,
advances of credit, or purchases made pursuant to subdivisions
(1), (2), and (3) and this subdivision.
(5) To purchase, take, hold, and dispose of notes, and mortgages
securing such notes, made to any joint stock land bank
heretofore incorporated, in any case in which not less than
ninety-nine percent (99%) of the stock of said joint stock land
bank is owned by the bank or trust company at the time such
notes or mortgages be acquired by the bank or trust company;
and upon dissolution of any such joint stock land bank, or at
any stage in the process of such dissolution, any bank or trust
company then owning not less than ninety-nine percent (99%)
of the stock of such joint stock land bank may take, hold, and
dispose of any notes, mortgages, or other assets of such joint
stock land bank of whatsoever nature, including real estate,
wheresoever situated, which such joint stock land bank shall
assign, transfer, convey, or otherwise make over to such bank
or trust company by way of final or partial distribution of its
assets to its stockholders upon such dissolution or in connection
with the process of such dissolution. No law of this state
prescribing the nature, amount, location, or form of security, or
requiring security upon which loans or advances of credit may
be made, or prescribing or limiting interest rates upon loans or
advances of credit, or prescribing or limiting the period for
which loan or advances of credit may be made, or prescribing
any ratio between the amount of any loan and the appraised
value of the security for such loan, or requiring periodical
reductions of the principal of any loan, shall be deemed to apply
to loans, notes, mortgages, real estate, or other assets mentioned
in this subdivision.
(6) To adopt stock purchase programs for employees and to
grant options to purchase, and to issue and sell, shares of its
capital stock to its employees, or to a trustee on their behalf
(which may be the bank or trust company issuing such capital
stock), without first offering the same to its shareholders, for
such consideration, not less than par value, and upon such terms
and conditions as shall be approved by its board of directors and
by the holders of a majority of its shares entitled to vote with
respect thereto, and by the department. In the absence of actual
fraud in the transaction, the judgment of the directors as to the
consideration for the issuances of such options and the
sufficiency thereof shall be conclusive. Any bank or trust
company exercising the powers granted in this subsection may,
to the extent approved by the department, have authorized and
unissued stock required to fulfill any stock option or other
arrangement authorized herein.
(7) Subject to such restrictions as the department may impose,
to become the owner or lessor of personal or real property
acquired upon the request and for the use of a customer and to
incur such additional obligations as may be incident to
becoming an owner or lessor of such property.
(8) To purchase or construct buildings and hold legal title
thereto to be leased to municipal corporations or other public
authorities, for public purposes, having resources sufficient to
make payment of all rentals as they become due. Each lease
agreement shall provide that upon expiration, the lessee will
become the owner of the building.
(8.1) Subject to the prior written approval of the department,
and notwithstanding section 5 of this chapter, to purchase, hold,
and convey real estate which is:
(A) improved or to be improved by a single, freestanding
building; and
(B) to be used, in part, as a branch or the principal office of
that bank or trust company and, in part, as rental property for
one (1) or more lessees.
Unless a written extension of time is given by the department,
the bank or trust company shall open the branch or principal
office within two (2) years from the acquisition date of the real
estate. If the bank or trust company does not open a branch or
its principal office on the real estate in that time period or if the
bank or trust company removes its branch or principal office
from the real estate, the bank or trust company shall divest itself
of all interest in the real estate within five (5) years from the
acquisition date of the real estate, if a branch was not opened,
or five (5) years from the removal date of the branch office,
whichever applies. Except with the written approval of the
department, the sum invested in real estate and buildings used
for the convenient transaction of its business as provided in this
subdivision shall not exceed fifty percent (50%) of the capital
and surplus of the bank or trust company as provided in section
5 of this chapter.
(9) Except as provided in subsections (c) and (d), and subject to
subsection (e), to invest directly or indirectly in community
development corporations and projects of a predominantly
civic, community, or public nature, including equity
investments in corporations, limited partnerships, limited
liability companies, or other entities organized for such
purposes. Investments by a bank or trust company under this
subdivision may not exceed:
(A) in any one (1) project, two percent (2%); and
(B) in the aggregate, five percent (5%);
of the capital and surplus of the bank or trust company. As used
in this subdivision and in subsection (c), "capital and surplus"
has the meaning set forth in IC 28-1-1-3(10).
(10) Subject to section 3.2 of this chapter, to exercise the rights
and privileges (as defined in section 3.2(a) of this chapter) that
are or may be granted to national banks domiciled in Indiana.
(c) Investments by a bank or trust company under subsection
(b)(9) may exceed the limit set forth in subsection (b)(9)(B) if the
director determines that:
(1) the aggregate investments by the bank or trust company
under subsection (b)(9) in excess of five percent (5%) of the
capital and surplus of the bank or trust company will not pose
a significant risk to the affected deposit insurance fund; and
(2) the bank or trust company is adequately capitalized.
However, in no case shall the aggregate investments by a bank or
trust company under subsection (b)(9) exceed ten percent (10%) of
the capital and surplus of the bank or trust company.
(d) Investments by a bank or trust company under subsection
(b)(9) in equity investments qualifying for the new markets tax
credits under 26 U.S.C. 45D or other programs approved by the
director:
(1) are not subject to the limit set forth in subsection (b)(9)(A);
and
(2) may exceed the limit set forth in subsection (b)(9)(B) if the
director determines that:
(A) the aggregate equity investments qualifying for the new
markets tax credit or other programs that are:
(i) made by the bank or trust company under subsection
(b)(9); and
(ii) in excess of five percent (5%) of the capital and
surplus of the bank or trust company;
will not pose a significant risk to the affected deposit
insurance fund; and
(B) the bank or trust company is adequately capitalized.
However, in no case shall the aggregate equity investments
qualifying for the new markets tax credit or other programs and
made by a bank or trust company exceed fifteen percent (15%)
of the capital and surplus of the bank or trust company.
(e) A bank or trust company shall not make any investment under
subsection (b)(9) if the investment would expose the bank or trust
company to unlimited liability.
(f) Any rule made and promulgated under and pursuant to this
section may apply to one (1) or more banks or trust companies or to
one (1) or more localities in the state as the department, in its
discretion, may determine. As added by Acts 1980, P.L.40, SEC.7. Amended by P.L.33-1991,
SEC.14; P.L.14-1992, SEC.81; P.L.136-1994, SEC.2; P.L.176-1996,
SEC.11; P.L.194-1997, SEC.1; P.L.215-1999, SEC.2; P.L.10-2006,
SEC.30 and P.L.57-2006, SEC.30; P.L.213-2007, SEC.38;
P.L.217-2007, SEC.36; P.L.35-2010, SEC.116.
IC 28-1-11-3.2 Request to exercise rights and privileges granted to national bank;
procedures; appeal
Sec. 3.2. (a) As used in this section, "rights and privileges" means
the power:
(1) to:
(A) create;
(B) deliver;
(C) acquire; or
(D) sell;
a product, a service, or an investment that is available to or
offered by; or
(2) to engage in mergers, consolidations, reorganizations, or
other activities or to exercise other powers authorized for;
national banks domiciled in Indiana.
(b) A bank that intends to exercise any rights and privileges that
are:
(1) granted to national banks; but
(2) not authorized for banks under the Indiana Code (except for
this section) or any rule adopted under the Indiana Code;
shall submit a letter to the department describing in detail the
requested rights and privileges granted to national banks that the
bank intends to exercise. If available, copies of relevant federal law,
regulations, and interpretive letters must be attached to the letter
submitted by the bank.
(c) The department shall promptly notify the requesting bank of
the department's receipt of the letter submitted under subsection (b).
Except as provided in subsection (e), the bank may exercise the
requested rights and privileges sixty (60) days after the date on which
the department receives the letter unless otherwise notified by the
department.
(d) The department may deny the requested rights and privileges
if the department finds that:
(1) national banks domiciled in Indiana do not possess the
requested rights and privileges;
(2) the exercise of the requested rights and privileges by the
bank would adversely affect the safety and soundness of the
bank;
(3) the exercise of the requested rights and privileges by the
bank would result in an unacceptable curtailment of consumer
protection; or
(4) the failure of the department to approve the requested rights
and privileges will not result in a competitive disadvantage to
the bank.
(e) The sixty (60) day period referred to in subsection (c) may be
extended by the department based on a determination that the bank's
letter raised issues requiring additional information or additional
time for analysis. If the sixty (60) day period is extended under this
subsection, the bank may exercise the requested rights and privileges
only if the bank receives prior written approval from the department.
However:
(1) the department must:
(A) approve or deny the requested rights and privileges; or
(B) convene a hearing;
not later than sixty (60) days after the department receives the
bank's letter; and
(2) if a hearing is convened, the department must approve or
deny the requested rights and privileges not later than sixty (60)
days after the hearing is concluded.
(f) The exercise of rights and privileges by a bank in compliance
with and in the manner authorized by this section is not a violation
of any provision of the Indiana Code or rules adopted under
IC 4-22-2.
(g) If a bank receives approval to exercise the requested rights and
privileges granted to national banks domiciled in Indiana, the
department shall determine by order whether all banks may exercise
the same rights and privileges. In making the determination required
by this subsection, the department must ensure that the exercise of
the rights and privileges by all banks will not:
(1) adversely affect their safety and soundness; or
(2) unduly constrain Indiana consumer protection provisions.
(h) If the department denies the request of a bank under this
section to exercise any rights and privileges that are granted to
national banks, the bank may appeal the decision of the department
to the circuit court with jurisdiction in the county in which the
principal office of the bank is located. In an appeal under this
section, the court shall determine the matter de novo. As added by P.L.194-1997, SEC.2. Amended by P.L.73-2004,
SEC.34; P.L.213-2007, SEC.39; P.L.217-2007, SEC.37;
P.L.35-2010, SEC.117.
IC 28-1-11-4 Investment securities
Sec. 4. (a) Except as otherwise provided in this article, the
business of dealing in investment securities by any bank or trust
company is limited to purchasing and selling securities without
recourse, solely upon the order and for the account of customers and
in no event for its own account. A bank or trust company may not
underwrite or guarantee all or any part of any issue of securities other
than obligations issued or guaranteed by or on behalf of the state or
any political subdivision of the state or any agency or instrumentality
of either. A bank or trust company may purchase for its own account
and sell investment securities under such limitations and restrictions
as the department prescribes by rule, but in no event may the total
amount of the investment securities of any one (1) obligor or maker,
purchased or held by a bank or trust company for its own account,
exceed at any time ten percent (10%) of the amount of the total
equity capital of the bank or trust company. The limitations imposed
by this section do not apply to the direct or indirect obligations of the
United States or the direct obligations of a United States territory or
insular possession or of the state of Indiana or any municipal
corporation or taxing district in Indiana. A bank or trust company
may purchase for its own account and sell shares of stock in federal
or state chartered small business investment companies that have
received a permit or license to operate under the federal Small
Business Investment Act (15 U.S.C. 681). However, a bank or trust
company may not acquire shares in any small business investment
company if, upon the making of that acquisition, the aggregate
amount of shares in small business investment companies then held
by the bank would exceed five percent (5%) of its total equity
capital.
(b) A bank or trust company may purchase for its own account
and sell:
(1) shares of open-end investment companies the portfolios of
which consist solely of securities that are eligible for purchase
and sale by national banking associations; and
(2) collateralized obligations that are eligible for purchase and
sale by national banking associations. However, a bank or trust
company may purchase for its own account and sell the
obligations only to the extent that a national banking association
can purchase and sell those obligations.
(c) A bank or trust company may deposit its funds in:
(1) a federally chartered savings association; or
(2) a savings association or other entity organized and operated
according to federal law or the laws of any state or the District
of Columbia;
the accounts of which are insured by the Saving Association
Insurance Fund of the Federal Deposit Insurance Corporation.
(d) A bank or trust company may not purchase for its own account
any bond, note, or other evidence of indebtedness that is commonly
designated as a security that is speculative in character or that has
speculative characteristics. For the purposes of this subsection, a
security is speculative or has speculative characteristics if at the time
of purchase the security:
(1) is rated below the first four (4) rating classes by a generally
recognized security rating service; or
(2) is in default.
(e) A bank or trust company may purchase for its own account a
security that is not rated by a generally recognized security rating
service if the bank or trust company at the time of purchase obtains
financial information that is adequate to document the investment
quality of the security.
(f) Except as otherwise authorized by this title, a bank or trust
company may not purchase any share of stock of a corporation that
is not a subsidiary of that bank or trust company unless the purchase
is considered expedient to prevent loss from a debt previously
contracted in good faith. Any shares of stock thus acquired by a bank
or trust company that would not have been eligible for purchase shall
be sold and disposed of within six (6) months from the date of
acquisition unless the director grants an extension of time for the sale
and disposition.
(g) Notwithstanding any other provision of this article, a bank or
trust company may purchase for its own account shares of stock of
a banker's bank insured by the Bank Insurance Fund of the Federal
Deposit Insurance Corporation or a holding company that owns or
controls a banker's bank insured by the Bank Insurance Fund of the
Federal Deposit Insurance Corporation. For the purposes of this
subsection, a "banker's bank" is a bank (as defined in IC 28-2-14-2):
(1) the stock of which is owned exclusively by other banks (as
defined in IC 28-2-14-2), or by a bank holding company the
stock of which is owned exclusively by other banks (as defined
in IC 28-2-14-2); and
(2) that is engaged exclusively in providing services to other
banks (as defined in IC 28-2-14-2), and to their officers,
directors, and employees.
A bank's or trust company's holdings of the stock of an insured
banker's bank or of a holding company that owns or controls an
insured banker's bank may not exceed ten percent (10%) of the
capital and surplus of the bank or trust company. A bank or trust
company may not purchase the stock of an insured banker's bank or
of a holding company that owns or controls an insured banker's bank
if, after the purchase, the bank or trust company would own more
than five percent (5%) of any class of voting securities of the
banker's bank or holding company.
(h) Notwithstanding any other provision of this article, a bank or
trust company may invest in a casualty insurance company organized
solely for the purpose of insuring banks, trust companies, and bank
holding companies and their officers and directors from and against
liabilities, including those covered by bankers' blanket bonds and
director and officer liability insurance and other public liability
insurance. The investment must take the form of:
(1) the purchase for the bank's or trust company's own account
of shares of stock of the casualty insurance company or shares
of stock of an association of banks organized for the purpose of
funding the casualty insurance company; or
(2) loans to such an association of banks.
The total investment of any bank or trust company under this
subsection may not exceed five percent (5%) of the capital and
surplus of the bank or trust company.
(i) Any bank or trust company may establish or acquire a
subsidiary that engages in:
(1) the sale, distribution, or underwriting of securities issued by
investment companies (as defined in Section 3 of the
Investment Company Act of 1940 (15 U.S.C. 80a-3); or
(2) the underwriting or distribution of securities backed by or
representing an interest in mortgages.
(j) As used in this section, "total equity capital" means unimpaired
capital stock, unimpaired surplus, unimpaired undivided profits,
subordinated debt that has been approved by the state or federal
regulatory agencies, and one hundred percent (100%) of loan
reserves.
(k) The department may define an investment security by
department policy or by rule.
(l) A bank or trust company may establish a trading account for
the purchase and resale of securities that are otherwise eligible for
purchase or resale by the bank or trust company. The trading account
must comply with the requirements established by policy or rule of
the department.
(m) A bank or trust company that purchases a security for its own
account shall maintain sufficient records of the security to allow the
security to be properly identified by the department for examination
purposes. (Formerly: Acts 1933, c.40, s.173; Acts 1935, c.5, s.26; Acts 1937,
c.33, s.18; Acts 1959, c.125, s.1; Acts 1965, c.356, s.10; Acts 1967,
c.260, s.11; Acts 1971, P.L.394, SEC.28.) As amended by
P.L.141-1984, SEC.7; P.L.265-1985, SEC.2; P.L.169-1986, SEC.1;
P.L.36-1987, SEC.8; P.L.165-1988, SEC.1; P.L.164-1988, SEC.3;
P.L.8-1991, SEC.11; P.L.42-1993, SEC.27; P.L.176-1996, SEC.12;
P.L.192-1997, SEC.4; P.L.79-1998, SEC.44; P.L.192-2003, SEC.3.
IC 28-1-11-5 Real estate
Sec. 5. (a) Any bank or trust company shall have power to
purchase, hold, and convey real estate for the following purposes,
and for no others:
(1) Such as shall be necessary for the convenient transaction of
its business.
(2) Such as shall be mortgaged to it or to its assignor immediate
or remote, in good faith by way of security for debts.
(3) Such as shall be conveyed to it in satisfaction of debts
contracted in the course of its dealings, or in satisfaction of
debts, notes, or mortgages purchased by or assigned to it, or in
exchange for real estate so conveyed to it.
(4) Such as it shall purchase at sales under judgments, decrees,
or mortgages held by the bank or trust company or shall
purchase to secure debts due it.
(b) Except with the approval in writing of the department, after
July 1, 1933, the sum invested in real estate and buildings used for
the convenient transaction of its business shall not exceed fifty
percent (50%) of the capital and surplus of such bank or trust
company. Such investment may be made in the stock of a corporation
organized to own and hold the real estate and building occupied and
used wholly or in part by such bank or trust company.
(c) No bank or trust company shall hold the title or possession of
any real estate purchased or otherwise acquired to secure any debts
due to it for a longer period than ten (10) years after such real estate
is or has been purchased or otherwise acquired, or after July 1, 1933,
without the consent in writing of the department.
(d) For the purposes of subsection (a)(1), real estate purchased or
held for the convenient transaction of the business of a bank or trust
company includes the following:
(1) Real estate on which the principal office or a branch office
of the bank or trust company is located.
(2) Real estate that is the location of facilities supporting the
operations of the bank or trust company, such as parking
facilities, data processing centers, loan production offices,
automated teller machines, night depositories, facilities
necessary for the operations of a bank or trust company
subsidiary, or other facilities that are approved by the director.
(3) Real estate that the board of directors of the bank or trust
company expects, in good faith, to use as a bank or trust
company office or facility in the future.
(e) If real estate referred to in subsection (d)(3) is held by a bank
or trust company for one (1) year without being used as a bank or
trust company office or facility, the board of directors of the bank or
trust company shall state, by resolution, definite plans for the use of
the real estate. A resolution adopted under this subsection shall be
made available for inspection by the department.
(f) Real estate referred to in subsection (d)(3) may not be held by
a bank or trust company for more than three (3) years without being
used as a bank or trust company office or facility unless:
(1) the board of directors of the bank or trust company, by
resolution:
(A) reaffirms annually that the bank or trust company
expects to use the real estate as a bank or trust company
office or facility in the future; and
(B) explains the reason why the real estate has not yet been
used as a bank or trust company office or facility; and
(2) the director determines that:
(A) the continued holding of the real estate by the bank or
trust company does not endanger the safety and soundness
of the bank or trust company; and
(B) the bank or trust company is holding the real estate to
use the real estate in the future for one (1) of the purposes
set forth in subsection (d)(1) and (d)(2).
(g) Real estate referred to in subsection (d)(3) may not be held by
a bank or trust company for more than ten (10) years without being
used as a bank or trust company office or facility unless the
department consents in writing to the continued holding of the real
estate by the bank or trust company. (Formerly: Acts 1933, c.40, s.174; Acts 1935, c.5, s.27; Acts 1943,
c.86, s.1; Acts 1959, c.39, s.1; Acts 1965, c.356, s.11; Acts 1967,
c.260, s.12.) As amended by P.L.263-1985, SEC.59; P.L.14-1992,
SEC.82; P.L.213-2007, SEC.40; P.L.217-2007, SEC.38.
IC 28-1-11-6 Appointment as fiduciary
Sec. 6. Any bank or trust company may be appointed and act
under the order of appointment of any court of competent jurisdiction
as commissioner for the sale of real estate, guardian of the person
and estate of persons under the age of eighteen (18) years, and
incapacitated persons (as defined in IC 29-3-1-7.5), or as trustee,
receiver, conservator, or committee of the property or estate of a
person, corporation, or company, in insolvency or bankruptcy
proceedings, or as depository of money paid into court, whether for
the benefit of a person, regardless of age, corporation, or party, and
in any other fiduciary capacity. (Formerly: Acts 1933, c.40, s.175; Acts 1973, P.L.280, SEC.3.) As
amended by P.L.33-1989, SEC.27.
IC 28-1-11-7 Testamentary and probate fiduciary appointments
Sec. 7. Any bank or trust company shall have power to be
appointed and to accept the appointment and act as executor or
trustee under the last will and testament, or as administrator, with or
without the will annexed, of the estate of any deceased person, and
to be appointed and to act under the order of appointment of any
court of competent jurisdiction as executor of or trustee under any
last will and testament, whenever it shall be the successor to any
corporation appointed in such last will and testament, whether such
succession is the result of merger, consolidation or otherwise.
Whenever a natural person is appointed with such corporation in any
appointment as receiver, guardian, commissioner, trustee, executor,
administrator with or without the will annexed, his appointment may
be under such limitation of powers, and upon such terms and
conditions as to the possession and control of the trust assets by such
corporation, or otherwise, and as to the bond or security, if any, to be
given by him, as the person appointed and such corporation may
agree and the court or judge making the appointment shall approve.
Whenever any natural person who is appointed in any fiduciary
capacity is required to give a bond or security for the faithful
performance of his duties, such corporation shall have the power and
authority to guarantee or become surety for such natural person if
such corporation shall take possession and control of the assets
belonging to any such estate or other fiduciary relationship, and if
approved by the court having jurisdiction of the fiduciary. (Formerly: Acts 1933, c.40, s.176.)
IC 28-1-11-8 Appointment as successor guardian, trustee, executor, or
administrator
Sec. 8. Any bank or trust company shall have power to be
appointed and to act under the order of appointment of any court of
competent jurisdiction as guardian, trustee, executor or
administrator, with or without the will annexed, on the application or
consent of any person acting as such or entitled to such appointment
and in the place and stead of such person, but such appointment shall
be made upon such notice as is required by law to the persons
interested in the estate or fund and on the consent of such of the
principal beneficiaries or other persons interested in the estate or
fund as the court or judge thereof making the appointment shall deem
proper. (Formerly: Acts 1933, c.40, s.177.)
IC 28-1-11-9 Trust business
Sec. 9. Any bank or trust company shall have power to take,
accept and execute any and all legal trusts, duties, and powers in
regard to the holding, management, sale and disposition of any
property or estate, real or personal, wherever located, and the rents
and profits thereof, which may be granted or confided to it by any
court of competent jurisdiction, or by any person, corporation,
municipality or other authority; to take, accept and execute any and
all trusts and powers of whatsoever nature or description which may
be conferred upon or entrusted or submitted to it by any person, firm,
company, or any body politic, corporation, foreign or domestic, or
other authority, by grant, assignment, transfer, devise, bequest or
otherwise, or which may be entrusted or committed or transferred to
it or vested in it by order of any court of competent jurisdiction; and
generally to execute trusts of every description not inconsistent with
the laws of this state or of the United States. (Formerly: Acts 1933, c.40, s.178.)
IC 28-1-11-10 Service as fiduciary without bond; judicial control; requirement of
security
Sec. 10. Except as otherwise provided in this chapter, any bank or
trust company shall have power to act in each and every fiduciary
capacity permitted by the terms of this article, and as commissioner
for the sale of real estate, without bond or other security, and
administer oaths attested by the signature of its secretary or cashier
and its seal wherever it is acting in any such fiduciary capacity and
whenever an individual acting in the same capacity is authorized by
law to administer oaths. The court having jurisdiction of the
fiduciary at any time, whether before or after acceptance of any
fiduciary appointment, may require a bond or other security, and
upon failure of such corporation to give a bond or security as
required, may remove such corporation and revoke its appointment.
No bank or trust company shall pledge or deposit any of its assets as
a condition to the exercise of any of its powers as a fiduciary. (Formerly: Acts 1933, c.40, s.179.) As amended by P.L.263-1985,
SEC.60.
IC 28-1-11-11 Safe deposits and escrows
Sec. 11. Any bank or trust company shall have power to receive,
upon terms and conditions to be prescribed by such corporation, not
inconsistent with the provisions of this section, upon deposit for
safe-keeping, or in escrow, moneys, bonds, mortgages, jewelry, plate,
stock, securities and valuable papers of any kind, and other personal
property for hire, and to rent or lease receptacles for safe deposits of
personal property. No bank or trust company nor any of the assets
thereof shall be liable, for the value of any property received by it
pursuant to the power conferred by this section nor for damages for
the loss, theft or misappropriation thereof. Any bank or trust
company may procure and carry a policy or policies of insurance for
the benefit of the owners of any property received by it pursuant to
the power conferred by this section.
(Formerly: Acts 1933, c.40, s.180.)
IC 28-1-11-12 Federal reserve system and federal deposit insurance corporation
membership; federal securities
Sec. 12. Every bank or trust company shall have power:
(1) to purchase and hold for the purpose of becoming a member
of the federal reserve system:
(A) so much of the capital stock of a federal reserve bank as
shall qualify it for membership, pursuant to the Federal
Reserve Act (12 U.S.C. 221 et seq.); and
(B) so much of the capital stock of the Federal Deposit
Insurance Corporation as will qualify it for membership,
pursuant to the Federal Deposit Insurance Act (12 U.S.C.
1811 through 1833e);
(2) to do anything necessary or appropriate to acquire and
maintain insurance of its deposits in accordance with the
provisions of any federal law in force on or after July 1, 1933;
(3) to become a member of the federal reserve system; and
(4) to have and exercise all powers, not in conflict with the laws
of this state, which are conferred upon any such member by the
Federal Reserve Act. With the express approval of the
department, and except as otherwise provided in this chapter,
any bank or trust company shall have the power to purchase and
hold shares of the capital stock, bonds, notes, debentures, or any
other securities or obligations issued at any time by any agency
or instrumentality of the federal government. After July 1, 1933,
no bank or trust company shall purchase the capital stock of any
joint stock land bank organized pursuant to 12 U.S.C. 2001
through 2279aa-14 and hold the stock so purchased in an
amount in excess of ten percent (10%) of the capital and surplus
of such bank or trust company. (Formerly: Acts 1933, c.40, s.181; Acts 1935, c.5, s.28; Acts 1937,
c.33, s.19.) As amended by P.L.263-1985, SEC.61; P.L.8-1991,
SEC.12; P.L.42-1993, SEC.28; P.L.213-2007, SEC.41;
P.L.217-2007, SEC.39.
IC 28-1-11-12.5 Federal home loan bank; investments; membership; loans;
transfer, assignment, and pledge of bonds, notes, contracts,
mortgages, securities, and other property
Sec. 12.5. Subject to any limitations imposed by the department
through policy, a bank or trust company may do any of the following:
(1) Invest the money deposited in the bank or trust company in
the shares of the capital stock, bonds, debentures, notes, or
other obligations of a federal home loan bank of the United
States.
(2) Become a member of the federal home loan bank of the
district in which Indiana is located or an adjoining district.
(3) Borrow money from:
(A) a federal home loan bank described in subdivision (2);
(B) the Federal Deposit Insurance Corporation; or
(C) any other corporation.
(4) Transfer, assign to, and pledge with a federal home loan
bank described in subdivision (2), the Federal Deposit
Insurance Corporation, or other corporation any of the bonds,
notes, contracts, mortgages, securities, or any other property of
the bank or trust company held or acquired as security for the
payment of loans entered into under subdivision (3).
(5) Exercise all rights, powers, and privileges conferred upon,
and do all things and perform all acts required of, members or
shareholders of a federal home loan bank by the Federal Home
Loan Bank Act (12 U.S.C. 1421 through 1449). As added by P.L.258-2003, SEC.5.
IC 28-1-11-13 Compensation for services
Sec. 13. Any bank or trust company shall have power to demand
and receive for the faithful performance and discharge of services
performed pursuant to the powers vested in it by this article
reasonable compensation, or such compensation as shall have been
fixed by agreement of the parties, together with any and all advances
necessarily paid out and expended in the discharge and performance
of its duties, and unless otherwise agreed upon, interest at the legal
rate on such advances. No compensation or commission paid or
agreed to be paid for the negotiation of any loan or the execution of
any trust by any such corporation shall be deemed to be interest
within the meaning of any law of this state, nor shall any excess
thereof over any rate of interest permitted by the laws of this state be
decreed or held to be usury in any court of law or equity. The
advances contemplated in this section may include the compensation
paid for the employment of legal services when necessary for the
protection of any trust or other fiduciary relation. (Formerly: Acts 1933, c.40, s.182.) As amended by P.L.263-1985,
SEC.62.
IC 28-1-11
Chapter 11. Powers of Banks and Trust Companies
IC 28-1-11-1 Additional rights, privileges, and powers; "bank or trust
company", "bank and trust company", "community based
economic development", and "community development
corporation" defined
Sec. 1. (a) In addition to the general rights, privileges, and powers
conferred by IC 28-1-4 through IC 28-1-9 and subject to the
limitations and restrictions contained in this article and in the articles
of incorporation, every bank or trust company shall possess and may
exercise the rights, privileges, and powers enumerated in this
chapter.
(b) Unless the language used specifically indicates otherwise, the
terms "bank or trust company" and "bank and trust company" as used
in IC 28-1-11 through IC 28-1-20 mean any bank or trust company
organized under this article and any bank of discount and deposit,
loan and trust and safe deposit company, or trust company organized
under any statute enacted prior to February 24, 1933.
(c) As used in this chapter, "community based economic
development" refers to activities that seek to address economic
causes of poverty within specific geographic areas, revitalizing the
economic and social base of low income communities through
activities that include:
(1) affordable housing development;
(2) small business and micro-enterprise support;
(3) commercial, industrial, and retail revitalization, retention,
and expansion;
(4) capacity development and technical assistance support for
community development corporations;
(5) employment and training efforts;
(6) human resource development; and
(7) social service enterprises.
(d) As used in this chapter, "community development corporation"
means a private, nonprofit corporation:
(1) whose board of directors is comprised primarily of
community representatives and business, civic, and community
leaders; and
(2) whose principal purpose includes the provision of:
(A) housing;
(B) community-based economic development projects; and
(C) social services;
that primarily benefit low-income individuals and communities. (Formerly: Acts 1933, c.40, s.170.) As amended by P.L.263-1985,
SEC.58; P.L.3-1990, SEC.101; P.L.14-1992, SEC.80; P.L.42-1993,
SEC.26; P.L.136-1994, SEC.1.
IC 28-1-11-2 Fiscal or transfer agent; transportation agent; insurance producer
or broker; attorney in fact
Sec. 2. Any bank or trust company shall have power to act as
fiscal or transfer agent of the United States or of any state,
municipality, body politic or corporation; and in such capacity to
receive and disburse money; to transfer, register and countersign
certificates of stock, bonds or other evidence of indebtedness; to
authenticate and certify any such bonds and certificates of
indebtedness; to act as agent to buy and sell domestic and foreign
transportation; to solicit and write insurance as an insurance
producer or broker for any insurance company authorized to do
business in the state or states where the insurance producer or broker
operates; and to act as attorney in fact or agent of any person or
corporation, foreign or domestic, for any lawful purpose. (Formerly: Acts 1933, c.40, s.171.) As amended by P.L.188-1997,
SEC.3; P.L.63-2001, SEC.6 and P.L.134-2001, SEC.7;
P.L.178-2003, SEC.89.
IC 28-1-11-2.5 Sale of life insurance policy or annuity contract
Sec. 2.5. (a) A bank or trust company may act as an insurance
producer for the sale of any life insurance policy or annuity contract
issued by a life insurance company authorized to do business in any
state in which the agent operates.
(b) A bank or trust company that acts as an insurance producer for
the sale of a life insurance policy or an annuity contract in Indiana:
(1) is subject to all requirements of IC 27; and
(2) must comply with the disclosure requirements under
IC 27-1-38.
(c) A bank or trust company may not condition:
(1) an extension of credit;
(2) a lease or sale of real or personal property;
(3) the performance of services; or
(4) the amount charged for:
(A) extending credit;
(B) leasing or selling real or personal property; or
(C) performing services;
upon a person's purchase of a life insurance policy or an annuity
contract from the bank or trust company or an affiliate (as defined in
IC 28-2-13-3) of the bank or trust company.
(d) This section does not prohibit a bank or trust company from
requiring that a person, as a condition to a transaction, obtain a life
insurance policy from an insurance company acceptable to the bank
or trust company. As added by P.L.262-1995, SEC.29. Amended by P.L.188-1997,
SEC.4; P.L.130-2002, SEC.5; P.L.192-2003, SEC.2; P.L.178-2003,
SEC.90.
IC 28-1-11-2.6
Repealed
(Repealed by P.L.130-2002, SEC.10.) IC 28-1-11-3
Repealed
(Repealed by Acts 1980, P.L.40, SEC.8.)
IC 28-1-11-3.1 Powers necessary and usual in carrying on banking business;
enumerated powers; community development investments; new
markets tax credit investments
Sec. 3.1. (a) Any bank or trust company shall have the power to
discount, negotiate, sell and guarantee promissory notes, bonds,
drafts, acceptances, bills of exchange, and other evidences of debt;
to buy and sell, exchange, coin and bullion; to loan money; to borrow
money and to issue its notes, bonds, or debentures to evidence any
such borrowing and to mortgage, pledge, or hypothecate any of its
assets to secure the repayment thereof; to receive savings deposits
and deposits of money subject to check, and deposits of securities or
other personal property from any person or corporation, upon such
terms as may be agreed upon by the parties; to contract for and
receive on loans and discounts the highest rate of interest allowed by
the laws of this state to be contracted for and received by individuals;
to accept, for payment at a future date, drafts drawn upon it by its
customers and to issue letters of credit authorizing the holders
thereof to draw drafts upon it or its correspondents at sight or on
time, however, the letter of credit must state a specific expiration
date; and to exercise all the powers incidental and proper or which
may be necessary and usual in carrying on a general banking
business, but it shall have no right to issue bills to circulate as
money.
(b) Subject to such regulations as the department finds to be
necessary and proper, any bank or trust company shall have the
following powers:
(1) To make such loans and advances of credit and purchases of
obligations representing loans and advances of credit as are
eligible for insurance by the federal housing administrator, and
to obtain such insurance.
(2) To make such loans secured by mortgages on real property
or leasehold, as the federal housing administrator insures or
makes a commitment to insure, and to obtain such insurance.
(3) To purchase, invest in, and dispose of notes or bonds
secured by mortgage or trust deed insured by the federal
housing administrator or debentures issued by the federal
housing administrator, or bonds or other securities issued by
national mortgage associations.
(4) To extend credit to any state agency, with the approval of
the department, notwithstanding any other provisions or
limitations of IC 28-1. No law of this state prescribing the
nature, amount, or form of security or requiring security upon
which loans or advances of credit may be made, or prescribing
or limiting interest rates upon loans or advances of credit, or
prescribing or limiting the period for which loans or advances
of credit may be made, shall be deemed to apply to loans,
advances of credit, or purchases made pursuant to subdivisions
(1), (2), and (3) and this subdivision.
(5) To purchase, take, hold, and dispose of notes, and mortgages
securing such notes, made to any joint stock land bank
heretofore incorporated, in any case in which not less than
ninety-nine percent (99%) of the stock of said joint stock land
bank is owned by the bank or trust company at the time such
notes or mortgages be acquired by the bank or trust company;
and upon dissolution of any such joint stock land bank, or at
any stage in the process of such dissolution, any bank or trust
company then owning not less than ninety-nine percent (99%)
of the stock of such joint stock land bank may take, hold, and
dispose of any notes, mortgages, or other assets of such joint
stock land bank of whatsoever nature, including real estate,
wheresoever situated, which such joint stock land bank shall
assign, transfer, convey, or otherwise make over to such bank
or trust company by way of final or partial distribution of its
assets to its stockholders upon such dissolution or in connection
with the process of such dissolution. No law of this state
prescribing the nature, amount, location, or form of security, or
requiring security upon which loans or advances of credit may
be made, or prescribing or limiting interest rates upon loans or
advances of credit, or prescribing or limiting the period for
which loan or advances of credit may be made, or prescribing
any ratio between the amount of any loan and the appraised
value of the security for such loan, or requiring periodical
reductions of the principal of any loan, shall be deemed to apply
to loans, notes, mortgages, real estate, or other assets mentioned
in this subdivision.
(6) To adopt stock purchase programs for employees and to
grant options to purchase, and to issue and sell, shares of its
capital stock to its employees, or to a trustee on their behalf
(which may be the bank or trust company issuing such capital
stock), without first offering the same to its shareholders, for
such consideration, not less than par value, and upon such terms
and conditions as shall be approved by its board of directors and
by the holders of a majority of its shares entitled to vote with
respect thereto, and by the department. In the absence of actual
fraud in the transaction, the judgment of the directors as to the
consideration for the issuances of such options and the
sufficiency thereof shall be conclusive. Any bank or trust
company exercising the powers granted in this subsection may,
to the extent approved by the department, have authorized and
unissued stock required to fulfill any stock option or other
arrangement authorized herein.
(7) Subject to such restrictions as the department may impose,
to become the owner or lessor of personal or real property
acquired upon the request and for the use of a customer and to
incur such additional obligations as may be incident to
becoming an owner or lessor of such property.
(8) To purchase or construct buildings and hold legal title
thereto to be leased to municipal corporations or other public
authorities, for public purposes, having resources sufficient to
make payment of all rentals as they become due. Each lease
agreement shall provide that upon expiration, the lessee will
become the owner of the building.
(8.1) Subject to the prior written approval of the department,
and notwithstanding section 5 of this chapter, to purchase, hold,
and convey real estate which is:
(A) improved or to be improved by a single, freestanding
building; and
(B) to be used, in part, as a branch or the principal office of
that bank or trust company and, in part, as rental property for
one (1) or more lessees.
Unless a written extension of time is given by the department,
the bank or trust company shall open the branch or principal
office within two (2) years from the acquisition date of the real
estate. If the bank or trust company does not open a branch or
its principal office on the real estate in that time period or if the
bank or trust company removes its branch or principal office
from the real estate, the bank or trust company shall divest itself
of all interest in the real estate within five (5) years from the
acquisition date of the real estate, if a branch was not opened,
or five (5) years from the removal date of the branch office,
whichever applies. Except with the written approval of the
department, the sum invested in real estate and buildings used
for the convenient transaction of its business as provided in this
subdivision shall not exceed fifty percent (50%) of the capital
and surplus of the bank or trust company as provided in section
5 of this chapter.
(9) Except as provided in subsections (c) and (d), and subject to
subsection (e), to invest directly or indirectly in community
development corporations and projects of a predominantly
civic, community, or public nature, including equity
investments in corporations, limited partnerships, limited
liability companies, or other entities organized for such
purposes. Investments by a bank or trust company under this
subdivision may not exceed:
(A) in any one (1) project, two percent (2%); and
(B) in the aggregate, five percent (5%);
of the capital and surplus of the bank or trust company. As used
in this subdivision and in subsection (c), "capital and surplus"
has the meaning set forth in IC 28-1-1-3(10).
(10) Subject to section 3.2 of this chapter, to exercise the rights
and privileges (as defined in section 3.2(a) of this chapter) that
are or may be granted to national banks domiciled in Indiana.
(c) Investments by a bank or trust company under subsection
(b)(9) may exceed the limit set forth in subsection (b)(9)(B) if the
director determines that:
(1) the aggregate investments by the bank or trust company
under subsection (b)(9) in excess of five percent (5%) of the
capital and surplus of the bank or trust company will not pose
a significant risk to the affected deposit insurance fund; and
(2) the bank or trust company is adequately capitalized.
However, in no case shall the aggregate investments by a bank or
trust company under subsection (b)(9) exceed ten percent (10%) of
the capital and surplus of the bank or trust company.
(d) Investments by a bank or trust company under subsection
(b)(9) in equity investments qualifying for the new markets tax
credits under 26 U.S.C. 45D or other programs approved by the
director:
(1) are not subject to the limit set forth in subsection (b)(9)(A);
and
(2) may exceed the limit set forth in subsection (b)(9)(B) if the
director determines that:
(A) the aggregate equity investments qualifying for the new
markets tax credit or other programs that are:
(i) made by the bank or trust company under subsection
(b)(9); and
(ii) in excess of five percent (5%) of the capital and
surplus of the bank or trust company;
will not pose a significant risk to the affected deposit
insurance fund; and
(B) the bank or trust company is adequately capitalized.
However, in no case shall the aggregate equity investments
qualifying for the new markets tax credit or other programs and
made by a bank or trust company exceed fifteen percent (15%)
of the capital and surplus of the bank or trust company.
(e) A bank or trust company shall not make any investment under
subsection (b)(9) if the investment would expose the bank or trust
company to unlimited liability.
(f) Any rule made and promulgated under and pursuant to this
section may apply to one (1) or more banks or trust companies or to
one (1) or more localities in the state as the department, in its
discretion, may determine. As added by Acts 1980, P.L.40, SEC.7. Amended by P.L.33-1991,
SEC.14; P.L.14-1992, SEC.81; P.L.136-1994, SEC.2; P.L.176-1996,
SEC.11; P.L.194-1997, SEC.1; P.L.215-1999, SEC.2; P.L.10-2006,
SEC.30 and P.L.57-2006, SEC.30; P.L.213-2007, SEC.38;
P.L.217-2007, SEC.36; P.L.35-2010, SEC.116.
IC 28-1-11-3.2 Request to exercise rights and privileges granted to national bank;
procedures; appeal
Sec. 3.2. (a) As used in this section, "rights and privileges" means
the power:
(1) to:
(A) create;
(B) deliver;
(C) acquire; or
(D) sell;
a product, a service, or an investment that is available to or
offered by; or
(2) to engage in mergers, consolidations, reorganizations, or
other activities or to exercise other powers authorized for;
national banks domiciled in Indiana.
(b) A bank that intends to exercise any rights and privileges that
are:
(1) granted to national banks; but
(2) not authorized for banks under the Indiana Code (except for
this section) or any rule adopted under the Indiana Code;
shall submit a letter to the department describing in detail the
requested rights and privileges granted to national banks that the
bank intends to exercise. If available, copies of relevant federal law,
regulations, and interpretive letters must be attached to the letter
submitted by the bank.
(c) The department shall promptly notify the requesting bank of
the department's receipt of the letter submitted under subsection (b).
Except as provided in subsection (e), the bank may exercise the
requested rights and privileges sixty (60) days after the date on which
the department receives the letter unless otherwise notified by the
department.
(d) The department may deny the requested rights and privileges
if the department finds that:
(1) national banks domiciled in Indiana do not possess the
requested rights and privileges;
(2) the exercise of the requested rights and privileges by the
bank would adversely affect the safety and soundness of the
bank;
(3) the exercise of the requested rights and privileges by the
bank would result in an unacceptable curtailment of consumer
protection; or
(4) the failure of the department to approve the requested rights
and privileges will not result in a competitive disadvantage to
the bank.
(e) The sixty (60) day period referred to in subsection (c) may be
extended by the department based on a determination that the bank's
letter raised issues requiring additional information or additional
time for analysis. If the sixty (60) day period is extended under this
subsection, the bank may exercise the requested rights and privileges
only if the bank receives prior written approval from the department.
However:
(1) the department must:
(A) approve or deny the requested rights and privileges; or
(B) convene a hearing;
not later than sixty (60) days after the department receives the
bank's letter; and
(2) if a hearing is convened, the department must approve or
deny the requested rights and privileges not later than sixty (60)
days after the hearing is concluded.
(f) The exercise of rights and privileges by a bank in compliance
with and in the manner authorized by this section is not a violation
of any provision of the Indiana Code or rules adopted under
IC 4-22-2.
(g) If a bank receives approval to exercise the requested rights and
privileges granted to national banks domiciled in Indiana, the
department shall determine by order whether all banks may exercise
the same rights and privileges. In making the determination required
by this subsection, the department must ensure that the exercise of
the rights and privileges by all banks will not:
(1) adversely affect their safety and soundness; or
(2) unduly constrain Indiana consumer protection provisions.
(h) If the department denies the request of a bank under this
section to exercise any rights and privileges that are granted to
national banks, the bank may appeal the decision of the department
to the circuit court with jurisdiction in the county in which the
principal office of the bank is located. In an appeal under this
section, the court shall determine the matter de novo. As added by P.L.194-1997, SEC.2. Amended by P.L.73-2004,
SEC.34; P.L.213-2007, SEC.39; P.L.217-2007, SEC.37;
P.L.35-2010, SEC.117.
IC 28-1-11-4 Investment securities
Sec. 4. (a) Except as otherwise provided in this article, the
business of dealing in investment securities by any bank or trust
company is limited to purchasing and selling securities without
recourse, solely upon the order and for the account of customers and
in no event for its own account. A bank or trust company may not
underwrite or guarantee all or any part of any issue of securities other
than obligations issued or guaranteed by or on behalf of the state or
any political subdivision of the state or any agency or instrumentality
of either. A bank or trust company may purchase for its own account
and sell investment securities under such limitations and restrictions
as the department prescribes by rule, but in no event may the total
amount of the investment securities of any one (1) obligor or maker,
purchased or held by a bank or trust company for its own account,
exceed at any time ten percent (10%) of the amount of the total
equity capital of the bank or trust company. The limitations imposed
by this section do not apply to the direct or indirect obligations of the
United States or the direct obligations of a United States territory or
insular possession or of the state of Indiana or any municipal
corporation or taxing district in Indiana. A bank or trust company
may purchase for its own account and sell shares of stock in federal
or state chartered small business investment companies that have
received a permit or license to operate under the federal Small
Business Investment Act (15 U.S.C. 681). However, a bank or trust
company may not acquire shares in any small business investment
company if, upon the making of that acquisition, the aggregate
amount of shares in small business investment companies then held
by the bank would exceed five percent (5%) of its total equity
capital.
(b) A bank or trust company may purchase for its own account
and sell:
(1) shares of open-end investment companies the portfolios of
which consist solely of securities that are eligible for purchase
and sale by national banking associations; and
(2) collateralized obligations that are eligible for purchase and
sale by national banking associations. However, a bank or trust
company may purchase for its own account and sell the
obligations only to the extent that a national banking association
can purchase and sell those obligations.
(c) A bank or trust company may deposit its funds in:
(1) a federally chartered savings association; or
(2) a savings association or other entity organized and operated
according to federal law or the laws of any state or the District
of Columbia;
the accounts of which are insured by the Saving Association
Insurance Fund of the Federal Deposit Insurance Corporation.
(d) A bank or trust company may not purchase for its own account
any bond, note, or other evidence of indebtedness that is commonly
designated as a security that is speculative in character or that has
speculative characteristics. For the purposes of this subsection, a
security is speculative or has speculative characteristics if at the time
of purchase the security:
(1) is rated below the first four (4) rating classes by a generally
recognized security rating service; or
(2) is in default.
(e) A bank or trust company may purchase for its own account a
security that is not rated by a generally recognized security rating
service if the bank or trust company at the time of purchase obtains
financial information that is adequate to document the investment
quality of the security.
(f) Except as otherwise authorized by this title, a bank or trust
company may not purchase any share of stock of a corporation that
is not a subsidiary of that bank or trust company unless the purchase
is considered expedient to prevent loss from a debt previously
contracted in good faith. Any shares of stock thus acquired by a bank
or trust company that would not have been eligible for purchase shall
be sold and disposed of within six (6) months from the date of
acquisition unless the director grants an extension of time for the sale
and disposition.
(g) Notwithstanding any other provision of this article, a bank or
trust company may purchase for its own account shares of stock of
a banker's bank insured by the Bank Insurance Fund of the Federal
Deposit Insurance Corporation or a holding company that owns or
controls a banker's bank insured by the Bank Insurance Fund of the
Federal Deposit Insurance Corporation. For the purposes of this
subsection, a "banker's bank" is a bank (as defined in IC 28-2-14-2):
(1) the stock of which is owned exclusively by other banks (as
defined in IC 28-2-14-2), or by a bank holding company the
stock of which is owned exclusively by other banks (as defined
in IC 28-2-14-2); and
(2) that is engaged exclusively in providing services to other
banks (as defined in IC 28-2-14-2), and to their officers,
directors, and employees.
A bank's or trust company's holdings of the stock of an insured
banker's bank or of a holding company that owns or controls an
insured banker's bank may not exceed ten percent (10%) of the
capital and surplus of the bank or trust company. A bank or trust
company may not purchase the stock of an insured banker's bank or
of a holding company that owns or controls an insured banker's bank
if, after the purchase, the bank or trust company would own more
than five percent (5%) of any class of voting securities of the
banker's bank or holding company.
(h) Notwithstanding any other provision of this article, a bank or
trust company may invest in a casualty insurance company organized
solely for the purpose of insuring banks, trust companies, and bank
holding companies and their officers and directors from and against
liabilities, including those covered by bankers' blanket bonds and
director and officer liability insurance and other public liability
insurance. The investment must take the form of:
(1) the purchase for the bank's or trust company's own account
of shares of stock of the casualty insurance company or shares
of stock of an association of banks organized for the purpose of
funding the casualty insurance company; or
(2) loans to such an association of banks.
The total investment of any bank or trust company under this
subsection may not exceed five percent (5%) of the capital and
surplus of the bank or trust company.
(i) Any bank or trust company may establish or acquire a
subsidiary that engages in:
(1) the sale, distribution, or underwriting of securities issued by
investment companies (as defined in Section 3 of the
Investment Company Act of 1940 (15 U.S.C. 80a-3); or
(2) the underwriting or distribution of securities backed by or
representing an interest in mortgages.
(j) As used in this section, "total equity capital" means unimpaired
capital stock, unimpaired surplus, unimpaired undivided profits,
subordinated debt that has been approved by the state or federal
regulatory agencies, and one hundred percent (100%) of loan
reserves.
(k) The department may define an investment security by
department policy or by rule.
(l) A bank or trust company may establish a trading account for
the purchase and resale of securities that are otherwise eligible for
purchase or resale by the bank or trust company. The trading account
must comply with the requirements established by policy or rule of
the department.
(m) A bank or trust company that purchases a security for its own
account shall maintain sufficient records of the security to allow the
security to be properly identified by the department for examination
purposes. (Formerly: Acts 1933, c.40, s.173; Acts 1935, c.5, s.26; Acts 1937,
c.33, s.18; Acts 1959, c.125, s.1; Acts 1965, c.356, s.10; Acts 1967,
c.260, s.11; Acts 1971, P.L.394, SEC.28.) As amended by
P.L.141-1984, SEC.7; P.L.265-1985, SEC.2; P.L.169-1986, SEC.1;
P.L.36-1987, SEC.8; P.L.165-1988, SEC.1; P.L.164-1988, SEC.3;
P.L.8-1991, SEC.11; P.L.42-1993, SEC.27; P.L.176-1996, SEC.12;
P.L.192-1997, SEC.4; P.L.79-1998, SEC.44; P.L.192-2003, SEC.3.
IC 28-1-11-5 Real estate
Sec. 5. (a) Any bank or trust company shall have power to
purchase, hold, and convey real estate for the following purposes,
and for no others:
(1) Such as shall be necessary for the convenient transaction of
its business.
(2) Such as shall be mortgaged to it or to its assignor immediate
or remote, in good faith by way of security for debts.
(3) Such as shall be conveyed to it in satisfaction of debts
contracted in the course of its dealings, or in satisfaction of
debts, notes, or mortgages purchased by or assigned to it, or in
exchange for real estate so conveyed to it.
(4) Such as it shall purchase at sales under judgments, decrees,
or mortgages held by the bank or trust company or shall
purchase to secure debts due it.
(b) Except with the approval in writing of the department, after
July 1, 1933, the sum invested in real estate and buildings used for
the convenient transaction of its business shall not exceed fifty
percent (50%) of the capital and surplus of such bank or trust
company. Such investment may be made in the stock of a corporation
organized to own and hold the real estate and building occupied and
used wholly or in part by such bank or trust company.
(c) No bank or trust company shall hold the title or possession of
any real estate purchased or otherwise acquired to secure any debts
due to it for a longer period than ten (10) years after such real estate
is or has been purchased or otherwise acquired, or after July 1, 1933,
without the consent in writing of the department.
(d) For the purposes of subsection (a)(1), real estate purchased or
held for the convenient transaction of the business of a bank or trust
company includes the following:
(1) Real estate on which the principal office or a branch office
of the bank or trust company is located.
(2) Real estate that is the location of facilities supporting the
operations of the bank or trust company, such as parking
facilities, data processing centers, loan production offices,
automated teller machines, night depositories, facilities
necessary for the operations of a bank or trust company
subsidiary, or other facilities that are approved by the director.
(3) Real estate that the board of directors of the bank or trust
company expects, in good faith, to use as a bank or trust
company office or facility in the future.
(e) If real estate referred to in subsection (d)(3) is held by a bank
or trust company for one (1) year without being used as a bank or
trust company office or facility, the board of directors of the bank or
trust company shall state, by resolution, definite plans for the use of
the real estate. A resolution adopted under this subsection shall be
made available for inspection by the department.
(f) Real estate referred to in subsection (d)(3) may not be held by
a bank or trust company for more than three (3) years without being
used as a bank or trust company office or facility unless:
(1) the board of directors of the bank or trust company, by
resolution:
(A) reaffirms annually that the bank or trust company
expects to use the real estate as a bank or trust company
office or facility in the future; and
(B) explains the reason why the real estate has not yet been
used as a bank or trust company office or facility; and
(2) the director determines that:
(A) the continued holding of the real estate by the bank or
trust company does not endanger the safety and soundness
of the bank or trust company; and
(B) the bank or trust company is holding the real estate to
use the real estate in the future for one (1) of the purposes
set forth in subsection (d)(1) and (d)(2).
(g) Real estate referred to in subsection (d)(3) may not be held by
a bank or trust company for more than ten (10) years without being
used as a bank or trust company office or facility unless the
department consents in writing to the continued holding of the real
estate by the bank or trust company. (Formerly: Acts 1933, c.40, s.174; Acts 1935, c.5, s.27; Acts 1943,
c.86, s.1; Acts 1959, c.39, s.1; Acts 1965, c.356, s.11; Acts 1967,
c.260, s.12.) As amended by P.L.263-1985, SEC.59; P.L.14-1992,
SEC.82; P.L.213-2007, SEC.40; P.L.217-2007, SEC.38.
IC 28-1-11-6 Appointment as fiduciary
Sec. 6. Any bank or trust company may be appointed and act
under the order of appointment of any court of competent jurisdiction
as commissioner for the sale of real estate, guardian of the person
and estate of persons under the age of eighteen (18) years, and
incapacitated persons (as defined in IC 29-3-1-7.5), or as trustee,
receiver, conservator, or committee of the property or estate of a
person, corporation, or company, in insolvency or bankruptcy
proceedings, or as depository of money paid into court, whether for
the benefit of a person, regardless of age, corporation, or party, and
in any other fiduciary capacity. (Formerly: Acts 1933, c.40, s.175; Acts 1973, P.L.280, SEC.3.) As
amended by P.L.33-1989, SEC.27.
IC 28-1-11-7 Testamentary and probate fiduciary appointments
Sec. 7. Any bank or trust company shall have power to be
appointed and to accept the appointment and act as executor or
trustee under the last will and testament, or as administrator, with or
without the will annexed, of the estate of any deceased person, and
to be appointed and to act under the order of appointment of any
court of competent jurisdiction as executor of or trustee under any
last will and testament, whenever it shall be the successor to any
corporation appointed in such last will and testament, whether such
succession is the result of merger, consolidation or otherwise.
Whenever a natural person is appointed with such corporation in any
appointment as receiver, guardian, commissioner, trustee, executor,
administrator with or without the will annexed, his appointment may
be under such limitation of powers, and upon such terms and
conditions as to the possession and control of the trust assets by such
corporation, or otherwise, and as to the bond or security, if any, to be
given by him, as the person appointed and such corporation may
agree and the court or judge making the appointment shall approve.
Whenever any natural person who is appointed in any fiduciary
capacity is required to give a bond or security for the faithful
performance of his duties, such corporation shall have the power and
authority to guarantee or become surety for such natural person if
such corporation shall take possession and control of the assets
belonging to any such estate or other fiduciary relationship, and if
approved by the court having jurisdiction of the fiduciary. (Formerly: Acts 1933, c.40, s.176.)
IC 28-1-11-8 Appointment as successor guardian, trustee, executor, or
administrator
Sec. 8. Any bank or trust company shall have power to be
appointed and to act under the order of appointment of any court of
competent jurisdiction as guardian, trustee, executor or
administrator, with or without the will annexed, on the application or
consent of any person acting as such or entitled to such appointment
and in the place and stead of such person, but such appointment shall
be made upon such notice as is required by law to the persons
interested in the estate or fund and on the consent of such of the
principal beneficiaries or other persons interested in the estate or
fund as the court or judge thereof making the appointment shall deem
proper. (Formerly: Acts 1933, c.40, s.177.)
IC 28-1-11-9 Trust business
Sec. 9. Any bank or trust company shall have power to take,
accept and execute any and all legal trusts, duties, and powers in
regard to the holding, management, sale and disposition of any
property or estate, real or personal, wherever located, and the rents
and profits thereof, which may be granted or confided to it by any
court of competent jurisdiction, or by any person, corporation,
municipality or other authority; to take, accept and execute any and
all trusts and powers of whatsoever nature or description which may
be conferred upon or entrusted or submitted to it by any person, firm,
company, or any body politic, corporation, foreign or domestic, or
other authority, by grant, assignment, transfer, devise, bequest or
otherwise, or which may be entrusted or committed or transferred to
it or vested in it by order of any court of competent jurisdiction; and
generally to execute trusts of every description not inconsistent with
the laws of this state or of the United States. (Formerly: Acts 1933, c.40, s.178.)
IC 28-1-11-10 Service as fiduciary without bond; judicial control; requirement of
security
Sec. 10. Except as otherwise provided in this chapter, any bank or
trust company shall have power to act in each and every fiduciary
capacity permitted by the terms of this article, and as commissioner
for the sale of real estate, without bond or other security, and
administer oaths attested by the signature of its secretary or cashier
and its seal wherever it is acting in any such fiduciary capacity and
whenever an individual acting in the same capacity is authorized by
law to administer oaths. The court having jurisdiction of the
fiduciary at any time, whether before or after acceptance of any
fiduciary appointment, may require a bond or other security, and
upon failure of such corporation to give a bond or security as
required, may remove such corporation and revoke its appointment.
No bank or trust company shall pledge or deposit any of its assets as
a condition to the exercise of any of its powers as a fiduciary. (Formerly: Acts 1933, c.40, s.179.) As amended by P.L.263-1985,
SEC.60.
IC 28-1-11-11 Safe deposits and escrows
Sec. 11. Any bank or trust company shall have power to receive,
upon terms and conditions to be prescribed by such corporation, not
inconsistent with the provisions of this section, upon deposit for
safe-keeping, or in escrow, moneys, bonds, mortgages, jewelry, plate,
stock, securities and valuable papers of any kind, and other personal
property for hire, and to rent or lease receptacles for safe deposits of
personal property. No bank or trust company nor any of the assets
thereof shall be liable, for the value of any property received by it
pursuant to the power conferred by this section nor for damages for
the loss, theft or misappropriation thereof. Any bank or trust
company may procure and carry a policy or policies of insurance for
the benefit of the owners of any property received by it pursuant to
the power conferred by this section.
(Formerly: Acts 1933, c.40, s.180.)
IC 28-1-11-12 Federal reserve system and federal deposit insurance corporation
membership; federal securities
Sec. 12. Every bank or trust company shall have power:
(1) to purchase and hold for the purpose of becoming a member
of the federal reserve system:
(A) so much of the capital stock of a federal reserve bank as
shall qualify it for membership, pursuant to the Federal
Reserve Act (12 U.S.C. 221 et seq.); and
(B) so much of the capital stock of the Federal Deposit
Insurance Corporation as will qualify it for membership,
pursuant to the Federal Deposit Insurance Act (12 U.S.C.
1811 through 1833e);
(2) to do anything necessary or appropriate to acquire and
maintain insurance of its deposits in accordance with the
provisions of any federal law in force on or after July 1, 1933;
(3) to become a member of the federal reserve system; and
(4) to have and exercise all powers, not in conflict with the laws
of this state, which are conferred upon any such member by the
Federal Reserve Act. With the express approval of the
department, and except as otherwise provided in this chapter,
any bank or trust company shall have the power to purchase and
hold shares of the capital stock, bonds, notes, debentures, or any
other securities or obligations issued at any time by any agency
or instrumentality of the federal government. After July 1, 1933,
no bank or trust company shall purchase the capital stock of any
joint stock land bank organized pursuant to 12 U.S.C. 2001
through 2279aa-14 and hold the stock so purchased in an
amount in excess of ten percent (10%) of the capital and surplus
of such bank or trust company. (Formerly: Acts 1933, c.40, s.181; Acts 1935, c.5, s.28; Acts 1937,
c.33, s.19.) As amended by P.L.263-1985, SEC.61; P.L.8-1991,
SEC.12; P.L.42-1993, SEC.28; P.L.213-2007, SEC.41;
P.L.217-2007, SEC.39.
IC 28-1-11-12.5 Federal home loan bank; investments; membership; loans;
transfer, assignment, and pledge of bonds, notes, contracts,
mortgages, securities, and other property
Sec. 12.5. Subject to any limitations imposed by the department
through policy, a bank or trust company may do any of the following:
(1) Invest the money deposited in the bank or trust company in
the shares of the capital stock, bonds, debentures, notes, or
other obligations of a federal home loan bank of the United
States.
(2) Become a member of the federal home loan bank of the
district in which Indiana is located or an adjoining district.
(3) Borrow money from:
(A) a federal home loan bank described in subdivision (2);
(B) the Federal Deposit Insurance Corporation; or
(C) any other corporation.
(4) Transfer, assign to, and pledge with a federal home loan
bank described in subdivision (2), the Federal Deposit
Insurance Corporation, or other corporation any of the bonds,
notes, contracts, mortgages, securities, or any other property of
the bank or trust company held or acquired as security for the
payment of loans entered into under subdivision (3).
(5) Exercise all rights, powers, and privileges conferred upon,
and do all things and perform all acts required of, members or
shareholders of a federal home loan bank by the Federal Home
Loan Bank Act (12 U.S.C. 1421 through 1449). As added by P.L.258-2003, SEC.5.
IC 28-1-11-13 Compensation for services
Sec. 13. Any bank or trust company shall have power to demand
and receive for the faithful performance and discharge of services
performed pursuant to the powers vested in it by this article
reasonable compensation, or such compensation as shall have been
fixed by agreement of the parties, together with any and all advances
necessarily paid out and expended in the discharge and performance
of its duties, and unless otherwise agreed upon, interest at the legal
rate on such advances. No compensation or commission paid or
agreed to be paid for the negotiation of any loan or the execution of
any trust by any such corporation shall be deemed to be interest
within the meaning of any law of this state, nor shall any excess
thereof over any rate of interest permitted by the laws of this state be
decreed or held to be usury in any court of law or equity. The
advances contemplated in this section may include the compensation
paid for the employment of legal services when necessary for the
protection of any trust or other fiduciary relation. (Formerly: Acts 1933, c.40, s.182.) As amended by P.L.263-1985,
SEC.62.
