Introduced Version






SENATE BILL No. 261

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DIGEST OF INTRODUCED BILL



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.





Nugent




    January 11, 2001, read first time and referred to Committee on Insurance and Financial Institutions.







Introduced

First Regular Session 112th General Assembly (2001)


PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in this style type.
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SENATE BILL No. 261



    A BILL FOR AN ACT to amend the Indiana Code concerning financial institutions.

Be it enacted by the General Assembly of the State of Indiana:

    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.