March 4, 2003



DIGEST OF HB 1654 (Updated March 3, 2003 7:26 PM - DI 92)

Citations Affected: IC 28-5; IC 28-8.

Synopsis: Financial institutions. Revises definitions in financial institutions law. Provides for the release of information to state and federal supervisory agencies, federal law enforcement agencies, and federal prosecutorial agencies or offices.

Effective: July 1, 2003.

Bardon , Burton

    January 21, 2003, read first time and referred to Committee on Financial Institutions.
    February 17, 2003, reported _ Do Pass.
    March 3, 2003, read second time, amended, ordered engrossed.


March 4, 2003

First Regular Session 113th General Assembly (2003)

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.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the word 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 this style type or this style type reconciles conflicts between statutes enacted by the 2002 Regular or Special Session of the General Assembly.


    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:

SOURCE: IC 28-5-1-3; (03)HB1654.2.1. -->     SECTION 1. IC 28-5-1-3 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2003]: Sec. 3. As used in this chapter and unless a different meaning appears from the context:
    (a) The term "company" shall mean and include means any corporation to which this chapter is applicable.
    (b) The term "department" means the department of financial institutions of the state of Indiana.
    (c) The term "sound capital" means and includes the paid-in and unimpaired capital, the unimpaired surplus, and the unimpaired proceeds of the capital and investment notes and capital debentures of any company which have been issued under the authority and with the approval in writing of the department together with all accrued and unpaid interest on said capital and investment notes and capital debentures which by the terms thereof is payable:
        (i) at maturity;
        (ii) after a one year notice in writing given by the holder to the company, except that any such company may waive such notice

whenever its reserve balance exceeds the amount provided in section 13 of this chapter; or
        (iii) at a fixed or determinable date or dates, which fixed or determinable date or dates are at intervals of not less than four (4) years.
The department is hereby authorized to approve the issue of capital and investment notes and capital debentures by any company to create sound capital, but no such notes and debentures shall be authorized or approved by the department unless such notes and debentures shall, by their terms, provide that the debt, including all accrued and unpaid interest, evidenced thereby shall be subordinate, in order of priority on liquidation, to all of the obligations of the company to the holders of its installment and fully paid certificates of indebtedness or investment and creditors other than such creditors and holders who have expressly agreed otherwise and other than creditors who are such by reason of the ownership of such notes or debentures which the department is authorized to approve by this section.

SOURCE: IC 28-8-1-1; (03)HB1654.2.2. -->     SECTION 2. IC 28-8-1-1 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2003]: Sec. 1. For the purposes of this chapter:
    (a) "Department" shall mean means the department of financial institutions for the state of Indiana.
    (b) "Bank services" shall mean means check and deposit sorting and posting, computation and posting of interest and other credits and charges, preparation and mailing of checks, statements, notices, and similar items, or any other clerical, bookkeeping, accounting, statistical, or similar functions performed for a bank or trust company.
    (c) "Bank service corporation" shall mean means a corporation organized to perform bank services for two or more banks or trust companies, each of which owns a portion of the capital stock of such corporation.
    (d) "Invest" shall include any advance of funds to a bank service corporation, whether by the purchase of stock, the making of a loan or loans, or otherwise; provided, however, payment for rent earned, goods sold and delivered, or services rendered prior to the making of such payment shall not be deemed an investment.
SOURCE: IC 28-8-4-47; (03)HB1654.2.3. -->     SECTION 3. IC 28-8-4-47 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2003]: Sec. 47. (a) Notwithstanding any other provision of law, all information or reports obtained by the director from an applicant, a licensee, or an authorized delegate, whether obtained through reports, applications, examination, audits, investigation, or otherwise, including but not limited to:
        (1) all information contained in or related to:
            (A) examination;
            (B) investigation;
            (C) operation; or
            (D) condition reports prepared by, on behalf of, or for the use of the director; or
        (2) financial statements, balance sheets, or authorized delegate information;
are confidential and may not be disclosed or distributed outside the department by the director or any officer or employee of the department, except as provided in subsection (b).
    (b) The director may provide for the release of information to representatives of state or federal:
        (1) financial institution supervisory
        (2) law enforcement agencies; or
        (3) prosecutorial agencies or offices;
who state in writing under oath that they shall are required to maintain the confidentiality of the information if: as described in IC 28-1-2-30.
        (1) the licensee provides consent before the release; or
        (2) the director finds that the release is reasonably necessary for the protection of the public and in the interests of justice, and the licensee has been given prior notice by the director to release the information.
    (c) Nothing in this section shall prohibit the director from releasing to the public a list of persons licensed under this chapter or from releasing aggregated financial data on such licensees.