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House Bill 1229

House Bill 1229

ARCHIVE (2004)

Latest Information

DIGEST OF HB 1229 (Updated March 4, 2004 8:50 pm - DI 108)

Restricts certain lending acts and practices. Establishes the homeowner protection unit in the office of the attorney general. Provides enforcement procedures for deceptive mortgage acts. Establishes a $3 mortgage recording fee. Requires the department of commerce to provide home ownership education programs. Provides that certain provisions do not apply to certain financial institutions. Prohibits certain lending practices. Updates references in financial institutions law to conform with federal law. Permits a state chartered financial institution to engage in activities related to a product, a service, or an investment that is available to or offered by national banks domiciled in Indiana. Removes limitations on the amount of public funds that may be deposited in a credit union. (Currently, deposits of public funds are limited to 10% of total credit union assets.) Increases the minimum amount of the bond required for a money transmitter from $100,000 to $200,000 and the maximum amount from $200,000 to $300,000. Increases the insurance coverage required for a money transmitter for criminal or dishonest acts from 50% to 100% of the amount of the money transmitter's security bond or deposit. Provides that state law applies to a state chartered bank, trust company, savings association, savings bank, credit union, corporate fiduciary, or industrial loan and investment company to the same extent it applies to a federally chartered institution of the same type. Establishes administrative procedures governing requests for an exemption from state law due to the preemption of state law as it is applied to federally chartered institutions. Makes various changes in the small loan provisions of the Uniform Consumer Credit Code, including: (1) defines a small loan as a loan with a principal amount that is more than $50 and not more than $500; (2) prohibits the renewal of a small loan; (3) removes limitations on finance charges; (4 ) increases delinquency charges; (5) allows a small loan to be secured by a borrower's authorization to debit an account instead of a borrower's check; (6) increases civil penalties and statutory damages from $1,000 to $2,000; and (7) prohibits a small loan if the total payable amount of the small loan exceeds 15% of the borrower's monthly gross income. (Current law provides that a small loan is prohibited if it exceeds 20% of the borrower's monthly net income.) Repeals provisions that relate to the renewal of a small loan. Permits the secretary of state to administratively dissolve a business entity whose name contains the term "banc" or "banco" in violation of financial institutions law. (Current law allows the secretary of state to take this action in the case of an entity whose name contains the term "bank".) Permits the use of the word "bank", "banc", or "banco" in the name of a subsidiary of : (1) a bank or trust company; (2) a bank holding company; (3) a savings bank; and (4) a savings association. Prohibits a lender from requiring a borrower to obtain hazard insurance in an amount exceeding the replacement value of the improvements on mortgaged property as a condition of receiving or maintaining the mortgage. Voids provisions in an agreement to purchase a security that would waive compliance with securities law or a rule or order made under securities law. Provides a procedure for an issuer of securities to respond to comments regarding an application for registration made by the securities division. Permits the appointment of a securities division attorney to serve as a special deputy prosecutor in actions arising under securities law. Prohibits the issuance of an interpretive opinions by the securities commissioner concerning an activity that occurred before or is occurring on the date that the opinion is requested. Requires that notice and opportunity to be heard must be provided to a person accused of violating securities law, rather than requiring that a hearing occur as provided by current law. Prohibits various deceptive practices by a person that supplies information concerning securities. Provides that an administrative action under securities law survives the death of a person who might have been a respondent. Makes changes to definitions used in the loan broker statutes. Exempts persons engaged in certain federally regulated transactions from the requirements of the loan broker law.
Current Status:
Law Enacted
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