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House Bill 1336

House Bill 1336

ARCHIVE (2010)

Latest Information

DIGEST OF HB 1336 (Updated March 13, 2010 12:51 am - DI 58)

Mortgages and public deposits. Establishes a voluntary five star mortgage program for creditors (including mortgage brokers) that offer qualifying mortgages to Indiana customers after June 30, 2010. Requires the department of financial institutions (department) to adopt guidelines to implement the program. Provides that to qualify as a five star mortgage lender, a creditor must provide to the department a certification attesting that the creditor meets specified criteria. Provides that to qualify as a five star mortgage, a mortgage: (1) must require: (A) a down payment of at least 10% of the purchase price of the dwelling, in the case of a purchase money transaction; or (B) that the customer have equity of at least 10% in the dwelling, in the case of a refinancing; (2) must have a fixed rate of interest; (3) must provide for an escrow account for the payment of taxes and insurance, if the creditor regularly provides for such escrow accounts in the creditor's ordinary course of business; (4) may not have a term that exceeds 30 years; and (5) may not include a prepayment penalty or fee. Requires a five star mortgage lender to provide a written statement to any Indiana customer who: (1) applies for a five star mortgage offered by the lender; and (2) does not qualify for the mortgage based on the lender's underwriting standards. Provides that the statement must set forth the reasons why the customer did not qualify for the five star mortgage. Allows a creditor that qualifies as a five star mortgage lender to include that fact in marketing materials or solicitations directed at Indiana customers, subject to the department's guidelines. Requires the department to publish on the department's Internet web site a list of all creditors that have a current and accurate certification or renewal certification on file with the department. Requires the department to provide written notice to a creditor that the creditor does not qualify for the program whenever a creditor: (1) holds itself out as a five star mortgage lender when it does not qualify to participate in the program; or (2) fails to comply with any program requirement. Requires the department to remove such a creditor from the list of five star mortgage lenders on the department's Internet web site and to provide, on the same Internet web page on which the list is published, a link to the notice provided to the creditor. Provides that the authority of the boards of trustees of the public employees' retirement fund (PERF) and of the state teachers' retirement fund (TRF) to invest in pooled funds includes the authority to invest in pools consisting in part or entirely of five star mortgages. Allows the PERF board to maintain alternative investment programs within: (1) the PERF annuity savings account; and (2) the legislators' defined contribution plan; that invest in pooled funds consisting in part or entirely of five star mortgages, or that otherwise invest in five star mortgages. Allows the TRF board to maintain alternative investment programs within the TRF annuity savings account that invest in pooled funds consisting in part or entirely of five star mortgages, or that otherwise invest in five star mortgages. Removes the discretion of a school corporation to determine whether a local board of finance meeting is needed on an annual basis. Permits local government investment officers to invest in municipal securities issued by an Indiana local governmental entity, a quasi-governmental entity related to the state, or a unit of government, municipal corporation, or special taxing district in Indiana so long as the issuer has not defaulted on an obligation within the 20 years preceding the date of the purchase. Permits counties and political subdivisions to invest public funds in certificates of deposit under certain conditions. Removes the prohibition against investing more than 50% of a unit's depository funds in money market mutual funds. Replaces the requirement that money be invested in transaction accounts and certificates of deposit with the depository quoting the highest interest rate with the authority to invest in a depository offering any one of the top three interest rates so long as the reason for choosing the alternate depository is noted in the memorandum of quotes. Changes the appointments to the board for depositories (board) to require one appointment by the speaker of the house of representatives, one appointment by the president pro tempore of the senate, and two appointments (instead of four) by the governor. Requires one of the appointees by the governor to be a chief executive officer or a chief financial officer of a depository that is a state chartered credit union in Indiana. Requires that each of the four appointed members be a chief executive officer or a chief financial officer of a depository and that each appointment represent a different segment of the financial institutions industry. Provides that if the depository is not domiciled in Indiana, the appointee must be the most senior corporate officer of the depository with management or operational responsibility or the person designated to manage public funds for the depository that is located in Indiana. Specifies that the term of an appointed member is four years. Permits the appointing authority to reappoint a member if the individual meets the requirements at the time of reappointment. Provides that a simple majority of the board members voting is required to approve an action by the board, instead of a unanimous vote. Requires the board to hold a public meeting at least once each calendar quarter. Requires that deliberations concerning a particular financial institution be held in executive session by the board and provides that records related to these matters are confidential. Requires the board to prepare a general summary semiannual report and present it to the budget committee. Changes the requirement for meeting notices from ten days to two days. Allows the board to fix the assessment rate at the times the board determines to be necessary instead of twice each year. Exempts certain certificates of deposit issued by a federally insured bank or savings and loan association from the assessment calculation. Provides that the board may consider capital adequacy, liquidity, and asset quality in addition to any study by actuaries in establishing any change in the reserve for losses. Increases from $1,500,000 to $300,000,000 the amount of anticipatory warrants the board may issue to pay immediate claims when the assets in the public deposit insurance fund (PDIF) are not sufficient to pay claims. Permits the board to accept as collateral bonds or other obligations that the board could not invest in if the board determines the obligations are acceptable collateral. Specifies United States treasury securities, federal agency securities, and irrevocable letters of credit issued by a Federal Home Loan Bank are acceptable collateral. Permits the board to determine whether a depository may withdraw collateral when the amount of public funds on deposit is at least 10% less than the market value of securities pledged as collateral. Allows the board to determine the amount and type of substituted securities a depository may provide to insure the insurance fund's solvency, consistent with the depository's pro rata share of total deposit accounts of public funds based on an average of the depository's total public deposits. Exempts federally insured deposits from the assessment calculation. Provides an exemption from assessment for a public depository if it pledges acceptable collateral equal to the public deposits it holds and the collateral level was continuously maintained for the 12 months immediately preceding an assessment. Provides that if the PDIF balance reaches zero, all depositories must pledge collateral equal to 100% of the depository's public fund holdings. Provides that the market value of the substituted securities as of the date of delivery may be less than, but may not exceed, the amount determined by the board. Provides that a joint investment fund may be invested or reinvested only in investments that are permitted for political subdivisions. Provides that a financial institution may not have public funds on deposit if it issues a credit card as a card issuer and the institution is not in substantial compliance with the federal Credit Card Accountability Responsibility and Disclosure Act of 2009 and requires the department of financial institutions to investigate complaints and determine whether a financial institution is in substantial compliance with the act. Eliminates a report by the public employees' retirement fund to the board for depositories' secretary-investment manager and an interest calculation concerning the coverage of local police and firefighter pension funds. Changes the distribution from the pension distribution fund to local units into a distribution to the pension relief fund from which distributions are made to local units.
Current Status:
Law Enacted
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