Citations Affected:
IC 24-4.5-3-209.
Synopsis: Determination of total finance charge. Excludes any prepaid
finance charge paid to a third party from the determination of total
finance charge for the purpose of prepayment of a consumer loan.
Effective: July 1, 2001.
January 11, 2001, read first time and referred to Committee on Insurance and Financial
Institutions.
A BILL FOR AN ACT to amend the Indiana Code concerning
financial institutions.
SECTION 1.
IC 24-4.5-3-209
, AS AMENDED BY P.L.23-2000,
SECTION 6, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2001]: Sec. 209. Right to Prepay - (1) Subject to the
provisions on rebate upon prepayment (IC 24-4.5-3-210), the debtor
may prepay in full the unpaid balance of a consumer loan, refinancing,
or consolidation at any time without penalty. With respect to a
consumer loan that is primarily secured by an interest in land, a lender
may contract for a penalty for prepayment of the loan in full, not to
exceed two percent (2%) of the net unpaid balance after deducting all
refunds and rebates as of the date of the prepayment. However, the
penalty may not be imposed:
(a) if the loan is refinanced or consolidated with the same
creditor;
(b) for prepayment by proceeds of any insurance or acceleration
after default; or
(c) after three (3) years from the contract date.
(2) At the time of prepayment of a consumer loan not subject to the
provisions of rebate upon prepayment (IC 24-4.5-3-210), the total
finance charge, including the prepaid finance charge but excluding any
prepaid finance charge paid to a third party and the loan origination
fee allowed under
IC 24-4.5-3-201
, may not exceed the maximum
charge allowed under this chapter for the period the loan was in effect.
(3) The creditor or mortgage servicer shall provide an accurate
payoff of the consumer loan to the debtor within ten (10) calendar days
after the creditor or mortgage servicer receives the debtor's written
request for the accurate consumer loan payoff amount. A creditor or
mortgage servicer who fails to provide the accurate consumer loan
payoff amount is liable for:
(A) (a) one hundred dollars ($100) if an accurate consumer loan
payoff amount is not provided by the creditor or mortgage
servicer within ten (10) calendar days after the creditor or
mortgage servicer receives the debtor's first written request; and
(B) (b) the greater of:
(i) one hundred dollars ($100); or
(ii) the loan finance charge that accrues on the loan from the
date the creditor or mortgage servicer receives the first written
request until the date on which the accurate consumer loan
payoff amount is provided;
if an accurate consumer loan payoff amount is not provided by the
creditor or mortgage servicer within ten (10) calendar days after
the creditor or mortgage servicer receives the debtor's second
written request, and the creditor or mortgage servicer failed to
comply with clause (A). subdivision (a).
A liability under this subsection is an excess charge under
IC 24-4.5-5-202.