January 10, 2001, read first time and referred to Committee on Insurance and Financial
Institutions.
February 26, 2001, amended, reported favorably _ Do Pass.
February 27, 2001
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
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Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in
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NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in
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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 any amount
prepaid within sixty (60) days of the date of the prepayment in full,
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 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.
For the purposes of determining compliance with this
subsection, the total finance charge does not include the following:
(a) The loan origination fee allowed under IC 24-4.5-3-201.
(b) The borrower paid mortgage broker fee, if any, paid to a
person who does not control, is not controlled by, or is not
under common control with, the creditor holding the loan at
the time a consumer loan is prepaid.
(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.
SECTION 2. [EFFECTIVE JULY 1, 2001]
IC 24-4.5-3-209, as
amended by this act, applies to a contract between a lender and a
debtor that is entered into or renewed after June 30, 2001.