MADAM PRESIDENT:
The Senate Committee on Insurance and Financial Institutions, to which was referred Senate Bill No.
572, has had the same under consideration and begs leave to report the same back to the Senate with the
recommendation that said bill be AMENDED as follows:
department of financial institutions and declared necessary to
meet an emergency under IC 24-4.5-6-107.
(7) A rule adopted by the Indiana utility regulatory commission to
address an emergency under IC 8-1-2-113.
(8) An emergency rule adopted by the state lottery commission
under IC 4-30-3-9.
(9) A rule adopted under IC 16-19-3-5 or IC 16-41-2-1 that the
executive board of the state department of health declares is
necessary to meet an emergency.
(10) An emergency rule adopted by the Indiana finance authority
under IC 8-21-12.
(11) An emergency rule adopted by the insurance commissioner
under IC 27-1-23-7.
(12) An emergency rule adopted by the Indiana horse racing
commission under IC 4-31-3-9.
(13) An emergency rule adopted by the air pollution control
board, the solid waste management board, or the water pollution
control board under IC 13-15-4-10(4) or to comply with a
deadline required by or other date provided by federal law,
provided:
(A) the variance procedures are included in the rules; and
(B) permits or licenses granted during the period the
emergency rule is in effect are reviewed after the emergency
rule expires.
(14) An emergency rule adopted by the Indiana election
commission under IC 3-6-4.1-14.
(15) An emergency rule adopted by the department of natural
resources under IC 14-10-2-5.
(16) An emergency rule adopted by the Indiana gaming
commission under IC 4-32.2-3-3(b), IC 4-33-4-2, IC 4-33-4-3,
IC 4-33-4-14, or IC 4-35-4-2.
(17) An emergency rule adopted by the alcohol and tobacco
commission under IC 7.1-3-17.5, IC 7.1-3-17.7, or
IC 7.1-3-20-24.4.
(18) An emergency rule adopted by the department of financial
institutions under IC 28-15-11.
(19) An emergency rule adopted by the office of the secretary of
family and social services under IC 12-8-1-12.
(20) An emergency rule adopted by the office of the children's
health insurance program under IC 12-17.6-2-11.
(21) An emergency rule adopted by the office of Medicaid policy
and planning under IC 12-15-41-15.
assignment of a document control number. The agency shall submit the
rule in the form required by section 20 of this chapter and with the
documents required by section 21 of this chapter. The publisher shall
determine the format of the rule and other documents to be submitted
under this subsection.
(d) After the document control number has been assigned, the
agency shall submit the rule to the publisher for filing. The agency
shall submit the rule in the form required by section 20 of this chapter
and with the documents required by section 21 of this chapter. The
publisher shall determine the format of the rule and other documents
to be submitted under this subsection.
(e) Subject to section 39 of this chapter, the publisher shall:
(1) accept the rule for filing; and
(2) electronically record the date and time that the rule is
accepted.
(f) A rule described in subsection (a) takes effect on the latest of the
following dates:
(1) The effective date of the statute delegating authority to the
agency to adopt the rule.
(2) The date and time that the rule is accepted for filing under
subsection (e).
(3) The effective date stated by the adopting agency in the rule.
(4) The date of compliance with every requirement established by
law as a prerequisite to the adoption or effectiveness of the rule.
(g) Subject to subsection (h), IC 14-10-2-5, IC 14-22-2-6,
IC 22-8-1.1-16.1, and IC 22-13-2-8(c), and except as provided in
subsections (j), (k), and (l), a rule adopted under this section expires
not later than ninety (90) days after the rule is accepted for filing under
subsection (e). Except for a rule adopted under subsection (a)(13),
(a)(24), (a)(25), or (a)(27), the rule may be extended by adopting
another rule under this section, but only for one (1) extension period.
The extension period for a rule adopted under subsection (a)(28) may
not exceed the period for which the original rule was in effect. A rule
adopted under subsection (a)(13) may be extended for two (2)
extension periods. Subject to subsection (j), a rule adopted under
subsection (a)(24), (a)(25), or (a)(27) may be extended for an unlimited
number of extension periods. Except for a rule adopted under
subsection (a)(13), for a rule adopted under this section to be effective
after one (1) extension period, the rule must be adopted under:
(1) sections 24 through 36 of this chapter; or
(2) IC 13-14-9;
as applicable.
for fraternal or religious purposes;
(2) any school, educational, or charitable religious institution
owned or conducted by or affiliated with a church or religious
institution; or
(3) any exclusively social club, corporation, or association that is
not organized for profit.
(i) "Employee" means any person employed by another for wages or
salary. However, the term does not include any individual employed:
(1) by his the individual's parents, spouse, or child; or
(2) in the domestic service of any person.
(j) "Labor organization" means any organization that exists for the
purpose in whole or in part of collective bargaining or of dealing with
employers concerning grievances, terms, or conditions of employment
or for other mutual aid or protection in relation to employment.
(k) "Employment agency" means any person undertaking with or
without compensation to procure, recruit, refer, or place employees.
(l) "Discriminatory practice" means:
(1) the exclusion of a person from equal opportunities because of
race, religion, color, sex, disability, national origin, or ancestry;
(2) a system that excludes persons from equal opportunities
because of race, religion, color, sex, disability, national origin, or
ancestry;
(3) the promotion of racial segregation or separation in any
manner, including but not limited to the inducing of or the
attempting to induce for profit any person to sell or rent any
dwelling by representations regarding the entry or prospective
entry in the neighborhood of a person or persons of a particular
race, religion, color, sex, disability, national origin, or ancestry;
or
(4) a violation of IC 22-9-5 that occurs after July 25, 1992, and is
committed by a covered entity (as defined in IC 22-9-5-4).
Every discriminatory practice relating to the acquisition or sale of real
estate, education, public accommodations, employment, or the
extending of credit (as defined in IC 24-4.5-1-301) IC 24-4.5-1-301.5)
shall be considered unlawful unless it is specifically exempted by this
chapter.
(m) "Public accommodation" means any establishment that caters
or offers its services or facilities or goods to the general public.
(n) "Complainant" means:
(1) any individual charging on his the individual's own behalf to
have been personally aggrieved by a discriminatory practice; or
(2) the director or deputy director of the commission charging that
a discriminatory practice was committed against a person other
than himself the director or deputy director of the commission
or a class of people, in order to vindicate the public policy of the
state (as defined in section 2 of this chapter).
(o) "Complaint" means any written grievance that is:
(1) sufficiently complete and filed by a complainant with the
commission; or
(2) filed by a complainant as a civil action in the circuit or
superior court having jurisdiction in the county in which the
alleged discriminatory practice occurred.
The original of any complaint filed under subdivision (1) shall be
signed and verified by the complainant.
(p) "Sufficiently complete" refers to a complaint that includes:
(1) the full name and address of the complainant;
(2) the name and address of the respondent against whom the
complaint is made;
(3) the alleged discriminatory practice and a statement of
particulars thereof;
(4) the date or dates and places of the alleged discriminatory
practice and if the alleged discriminatory practice is of a
continuing nature the dates between which continuing acts of
discrimination are alleged to have occurred; and
(5) a statement as to any other action, civil or criminal, instituted
in any other form based upon the same grievance alleged in the
complaint, together with a statement as to the status or disposition
of the other action.
No complaint shall be valid unless filed within one hundred eighty
(180) days from the date of the occurrence of the alleged
discriminatory practice.
(q) "Sex" as it applies to segregation or separation in this chapter
applies to all types of employment, education, public accommodations,
and housing. However:
(1) it shall not be a discriminatory practice to maintain separate
rest rooms;
(2) it shall not be an unlawful employment practice for an
employer to hire and employ employees, for an employment
agency to classify or refer for employment any individual, for a
labor organization to classify its membership or to classify or refer
for employment any individual, or for an employer, labor
organization, or joint labor management committee controlling
apprenticeship or other training or retraining programs to admit
or employ any other individual in any program on the basis of sex
in those certain instances where sex is a bona fide occupational
qualification reasonably necessary to the normal operation of that
particular business or enterprise; and
(3) it shall not be a discriminatory practice for a private or
religious educational institution to continue to maintain and
enforce a policy of admitting students of one (1) sex only.
(r) "Disabled" or "disability" means the physical or mental condition
of a person that constitutes a substantial disability. In reference to
employment, under this chapter, "disabled or disability" also means the
physical or mental condition of a person that constitutes a substantial
disability unrelated to the person's ability to engage in a particular
occupation.
combination with a security code, password, or access code
that would permit access to the person's account.
(3) With respect to an individual, any of the following:
(A) Address.
(B) Telephone number.
(C) Information concerning the individual's:
(i) income or other compensation;
(ii) credit history;
(iii) credit score;
(iv) assets;
(v) liabilities; or
(vi) employment history.
(m) As used in this chapter, personal information is "encrypted" if
the personal information:
(1) has been transformed through the use of an algorithmic
process into a form in which there is a low probability of
assigning meaning without use of a confidential process or key;
or
(2) is secured by another method that renders the personal
information unreadable or unusable.
(n) As used in this chapter, personal information is "redacted" if the
personal information has been altered or truncated so that not more
than the last four (4) digits of:
(1) a Social Security number;
(2) a driver's license number;
(3) a state identification number; or
(4) an account number;
are accessible as part of the personal information.
applicable state and federal laws, rules, and regulations.
(c) A reference to a requirement imposed by this article includes
reference to a related rule or guidance document of the department
adopted under this article.
(d) To carry out the purposes of this article, the director has the
broad administrative authority to:
(1) administer, interpret, and enforce this article; and
(2) adopt rules or issue policies and guidance in implementing
this article.
(e) A reference to a federal law in this article is a reference to
the law in effect December 31, 2008.
Sec. 3. This article:
(1) is a general statute intended as a unified coverage of its
subject matter; and
(2) any part of this article may not be considered to be
impliedly repealed by subsequent legislation if such
construction can reasonably be avoided.
Sec. 4. The provisions of this article are severable, so that if:
(1) any provision of this article; or
(2) the application of this article to any person or
circumstances;
is held invalid, the invalidity does not affect other provisions or
applications of this article that can be given effect without the
invalid provision or application.
Sec. 5. (a) Except as provided in subsection (b), this article
applies to a mortgage transaction:
(1) that is secured by an interest in land in Indiana; and
(2) the closing for which takes place after June 30, 2010.
(b) This article does not apply to a mortgage transaction if:
(1) the debtor is not a resident of Indiana at the time the
transaction is entered into; and
(2) the laws of the debtor's state of residence require that the
transaction be made under the laws of the state of the debtor's
residence.
Sec. 6. This article does not apply to the following:
(1) Extensions of credit to government or governmental
agencies or instrumentalities.
(2) A mortgage transaction in which the debt is incurred
primarily for a purpose other than a personal, family, or
household purpose.
(3) An extension of credit primarily for a business, a
commercial, or an agricultural purpose.
(4) An extension of credit originated by:
(A) a depository institution;
(B) subsidiaries that are:
(i) owned and controlled by a depository institution; and
(ii) regulated by a federal banking agency; or
(C) an institution regulated by the Farm Credit
Administration.
(5) A mortgage transaction originated by a registered
mortgage loan originator, when acting for an entity described
in subdivision (4). However, a privately insured state
chartered credit union must comply with the system of
mortgage loan originator registration developed by the
Federal Financial Institutions Examinations Council under
Section 1507 of the Safe and Fair Enforcement for Mortgage
Licensing Act of 2008 (SAFE).
(6) An individual who offers or negotiates terms of a mortgage
transaction with or on behalf of an immediate family member
of the individual.
(7) An individual who offers or negotiates terms of a mortgage
transaction secured by a dwelling that served as the
individual's residence.
(8) Unless the attorney is compensated by:
(A) a lender;
(B) a mortgage broker;
(C) another mortgage loan originator; or
(D) any agent of the lender, mortgage broker, or other
mortgage loan originator described in clauses (A) through
(C);
a licensed attorney who negotiates the terms of a mortgage
transaction on behalf of a client as an ancillary matter to the
attorney's representation of the client.
(9) Agencies, instrumentalities, and government owned
corporations of the United States, including United States
government sponsored enterprises.
Sec. 7. (a) A violation of a state or federal law, regulation, or
rule applicable to mortgage transactions is a violation of this
article.
(b) The department may enforce penalty provisions set forth in
15 U.S.C. 1640 for violations of disclosure requirements applicable
to mortgage transactions.
Sec. 8. In the department's examination and regulatory
activities related to licensees under this article, the department
may cooperate with the Indiana securities commissioner in the
regulation of individuals who, in addition to business conducted
under this article, also conduct a loan broker business consistent
with the IC 23-2-5.
Chapter 2. Definitions
Sec. 1. In addition to definitions appearing in other chapters of
this article, the definitions in this chapter apply throughout this
article.
Sec. 2. "Affiliate", with respect to any person subject to this
article, means a person that, directly or indirectly, through one (1)
or more intermediaries:
(1) controls;
(2) is controlled by; or
(3) is under common control with;
the person subject to this article.
Sec. 3. "Agreement" means the bargain of the parties in fact as
found in the parties' language or by implication from other
circumstances, including course of dealing or usage of trade or
course of performance.
Sec. 4. "Agricultural products" includes agricultural,
horticultural, viticultural, dairy products, livestock, wildlife,
poultry, bees, forest products, fish and shellfish, any products
raised or produced on farms, and any products processed or
manufactured from products raised or produced on farms.
Sec. 5. "Agricultural purpose" means a purpose related to the
production, harvest, exhibition, marketing, transportation,
processing, or manufacture of agricultural products by a natural
person who cultivates, plants, propagates, or nurtures the
agricultural products.
Sec. 6. "Civil court" means any court in Indiana having
jurisdiction over civil cases.
Sec. 7. "Consumer credit sale" is a sale of goods, services, or an
interest in land in which:
(1) credit is granted by a person who regularly engages as a
seller in credit transactions of the same kind;
(2) the buyer is a person other than an organization;
(3) the goods, services, or interest in land are purchased
primarily for a personal, family, or household purpose;
(4) either the debt is payable in installments or a credit service
charge is made; and
(5) with respect to a sale of goods or services, either the
amount financed does not exceed fifty thousand dollars
($50,000) or the debt is secured by personal property used or
expected to be used as the principal dwelling of the buyer.
Sec. 8. "Credit" means the right granted by a creditor to a
debtor to defer payment of debt or to incur debt and defer its
payment.
Sec. 9. "Creditor" has the meaning set forth in:
(1) IC 24-4.4-1-301 for first lien mortgage transactions; and
(2) IC 24-4.5-1-301.5 for subordinate lien mortgage
transactions.
Sec. 10. "Department" refers to the department of financial
institutions.
Sec. 11. "Depository institution" has the meaning set forth in
the Federal Deposit Insurance Act (12 U.S.C. 1813(c)) and includes
any credit union.
Sec. 12. "Director" refers to the director of the department of
financial institutions or the director's designee.
Sec. 13. "Dwelling" means a residential structure that contains
one (1) to four (4) units, regardless of whether the structure is
attached to real property. The term includes an individual:
(1) condominium unit;
(2) cooperative unit;
(3) mobile home; or
(4) trailer;
that is used as a residence.
Sec. 14. "Employee" has the meaning set forth in IC 22-2-2-3.
Sec. 15. "Federal banking agencies'' means the Board of
Governors of the Federal Reserve System, the Comptroller of the
Currency, the Office of Thrift Supervision, the National Credit
Union Administration, and the Federal Deposit Insurance
Corporation.
Sec. 16. "Immediate family member" means a spouse, child,
sibling, parent, grandparent, or grandchild. The term includes
stepparents, stepchildren, stepsiblings, and adoptive relationships.
Sec. 17. "Individual" means a natural person.
Sec. 18. "Licensee" means a person licensed as a mortgage loan
originator under this article.
Sec. 19. "Loan" includes:
(1) the creation of debt by:
(A) the creditor's payment of or agreement to pay money
to the debtor or to a third party for the account of the
debtor; or
(B) the extension of credit by a person who engages as a
seller in credit transactions primarily secured by an
interest in land;
(2) the creation of debt by a credit to an account with the
creditor upon which the debtor is entitled to draw
immediately; and
(3) the forbearance of debt arising from a loan.
Sec. 20. "Loan processor or underwriter'' means an individual
who performs clerical or support duties as an employee at the
direction of, and subject to the supervision and instruction of, a
person licensed or exempt from licensing under IC 24-4.4 or
IC 24-4.5. For purposes of this section, the term ''clerical or
support duties'' may include, after the receipt of an application, the
following:
(1) The receipt, collection, distribution, and analysis of
information common for the processing or underwriting of a
mortgage transaction.
(2) The communication with a consumer to obtain the
information necessary for the processing or underwriting of
a loan, to the extent that the communication does not include:
(A) offering or negotiating loan rates or terms; or
(B) counseling consumers about mortgage transaction
rates or terms.
An individual engaging solely in loan processor or underwriter
activities, shall not represent to the public, through advertising or
other means of communicating or providing information, including
the use of business cards, stationery, brochures, signs, rate lists, or
other promotional items, that the individual can or will perform
any of the activities of a mortgage loan originator.
Sec. 21. "Mortgage loan originator" means an individual who
for compensation or gain, or in the expectation of compensation or
gain, engages in taking a mortgage transaction application or
offering or negotiating terms of a mortgage transaction under
IC 24-4.4 or IC 24-4.5. The term does not include the following:
(1) An individual engaged solely as a loan processor or
underwriter as long as the individual works exclusively as an
employee of a person licensed or exempt from licensing under
IC 24-4.4 or IC 24-4.5.
(2) Unless the person or entity is compensated by:
(A) a creditor;
(B) a loan broker;
(C) another mortgage loan originator; or
(D) any agent of the creditor, loan broker, or other
mortgage loan originator described in clauses (A) through
(C);
a person that performs only real estate brokerage activities
and is licensed or registered in accordance with applicable
state law.
(3) A person solely involved in extensions of credit relating to
timeshare plans (as defined in 11 U.S.C. 101(53D)).
Sec. 22. "Mortgage transaction" means a loan or consumer
credit sale in which a mortgage or a land contract is created or
retained against land upon which there is a dwelling that is or will
be used by the debtor primarily for personal, family, or household
purposes.
Sec. 23. ''Nationwide Mortgage Licensing System and Registry''
or "NMLSR" means a mortgage licensing system developed and
maintained by the Conference of State Bank Supervisors and the
American Association of Residential Mortgage Regulators for the
licensing and registration of creditors and mortgage loan
originators.
Sec. 24. ''Nontraditional mortgage product'' means any
mortgage product other than a thirty (30) year fixed rate
mortgage.
Sec. 25. "Organization" means a corporation, a government or
government subdivision, an agency, a trust, an estate, a
partnership, a limited liability company, a cooperative, an
association, a joint venture, an unincorporated organization, or
any other entity, however organized.
Sec. 26. "Payable in installments", with respect to a debt or an
obligation, means that payment is required or permitted by written
agreement to be made in more than four (4) installments not
including a down payment.
Sec. 27. "Person" includes an individual or an organization.
Sec. 28. "Principal" of a mortgage transaction means the total
of:
(1) the net amount paid to, receivable by, or paid or payable
for the account of the debtor; and
(2) to the extent that payment is deferred, amounts actually
paid or to be paid by the creditor for registration, certificate
of title, or license fees if not included in subdivision (1).
Sec. 29. "Real estate brokerage activity" means any activity that
involves offering or providing real estate brokerage services to the
public, including the following:
(1) Acting as a real estate agent or real estate broker for a
buyer, seller, lessor, or lessee of real property.
(2) Bringing together parties interested in the sale, purchase,
lease, rental, or exchange of real property.
(3) Negotiating, on behalf of any party, any part of a contract
relating to the sale, purchase, lease, rental, or exchange of real
property (other than in connection with providing financing
with respect to the sale, purchase, lease, rental, or exchange
of real property).
(4) Engaging in any activity for which a person engaged in the
activity is required to be registered or licensed as a real estate
agent or real estate broker under any applicable law.
(5) Offering to engage in any activity, or act in any capacity,
described in this section.
Sec. 30. ''Registered mortgage loan originator'' means any
individual who:
(1) meets the definition of mortgage loan originator and is an
employee of:
(A) a depository institution;
(B) a subsidiary that is owned and controlled by a
depository institution and regulated by a federal banking
agency; or
(C) an institution regulated by the Farm Credit
Administration; and
(2) is registered with, and maintains a unique identifier
through, the NMLSR.
Sec. 31. "Revolving mortgage transaction" means an
arrangement between a creditor and a debtor in which:
(1) the creditor permits the debtor to obtain advances from
time to time;
(2) the unpaid balances of principal, finance charges, and
other appropriate charges are debited to an account; and
(3) the debtor has the privilege of paying the balances in
installments.
Sec. 32. "Unique identifier" means a number or other identifier
assigned by protocols established by the NMLSR.
Chapter 3. Licensing of Mortgage Loan Originators
Sec. 1. (a) Except as provided in IC 24-4.3-1-6(5) and subsection
(b), after June 20, 2010, an individual may not engage in the
business of a mortgage loan originator without obtaining a
mortgage loan originator license issued by the department under
this article and annually maintaining the license.
(b) An individual who conducts a mortgage loan originator
business as a sole proprietor is required to obtain only a creditor's
license under IC 24-4.4 or IC 24-4.5. However, the individual must
meet the background, education, and testing requirements
prescribed for a mortgage loan originator.
(c) Each licensed mortgage loan originator must register with
and maintain a valid unique identifier issued by the NMLSR. Each
licensed mortgage loan originator must be employed by, and
associated with, a licensed creditor in the NMLSR in order to
originate loans.
(d) Applicants for a license must apply for a license under this
article in a form prescribed by the director. Each form:
(1) must contain content as set forth by rule, instruction, or
procedure of the director; and
(2) may be changed or updated as necessary by the director in
order to carry out the purposes of this article.
(e) To fulfill the purposes of this article, the director may
establish relationships or contracts with the NMLSR or other
entities designated by the NMLSR to:
(1) collect and maintain records; and
(2) process transaction fees or other fees related to licensees
or other persons subject to this article.
(f) For the purpose of participating in the NMLSR, the director
may:
(1) waive or modify, in whole or in part, by rule or order, any
or all of the requirements of this article; and
(2) establish new requirements as reasonably necessary to
participate in the NMLSR.
Sec. 2. (a) The department shall receive and act on all
applications for licenses to engage as mortgage loan originators in
mortgage transactions. Applications must be made as prescribed
by the director.
(b) A license may not be issued unless the department finds that
the professional training and experience, financial responsibility,
character, and fitness of the applicant is such as to warrant belief
that the mortgage loan originator will operate honestly and fairly
within the purposes of this article.
(c) The director is entitled to request evidence of compliance
with this section at:
(1) the time of application;
(2) the time of renewal of a license; or
(3) any other time considered necessary by the director.
(d) Evidence of compliance with this section must include:
(1) criminal background checks, as described in section 3 of
this chapter, including a national criminal history background
check (as defined in IC 10-13-3-12) by the Federal Bureau of
Investigation, for the applicant;
(2) credit histories as described in section 4 of this chapter;
(3) prelicensing education requirements as described in
section 5 of this chapter;
(4) prelicensing written test requirements as described in
section 6 of this chapter;
(5) surety bond requirements as described in section 7 of this
chapter;
(6) a review of licensure actions in this and other states; and
(7) other background checks considered necessary by the
director.
(e) An individual who has had a mortgage loan originator
license revoked in any state may not be licensed as a mortgage loan
originator under this article. The individual must submit personal
history and experience information in a form prescribed by the
NMLSR, including the submission of authorization for the NMLSR
and the director to obtain information related to any
administrative, civil, or criminal findings by any governmental
jurisdiction.
(f) For purposes of this section and in order to reduce the points
of contact that the director may have to maintain for purposes of
this section, the director may use the NMLSR as a channeling
agent for requesting and distributing information to and from any
source so directed by the director.
(g) Upon written request, an applicant is entitled to a hearing on
the question of the qualifications of the applicant for a license in
the manner provided in IC 4-21.5.
(h) The applicant shall pay the following fees at the time
designated by the department:
(1) An initial license fee as established by the department
under IC 28-11-3-5.
(2) An annual renewal fee as established by the department
under IC 28-11-3-5.
(3) Examination fees as established by the department under
IC 28-11-3-5.
(i) A fee as established by the department under IC 28-11-3-5
may be charged for each day a fee under subsection (h)(2) or (h)(3)
is delinquent.
(j) A license issued under this section is not assignable or
transferable.
Sec. 3. (a) When the director requests a national criminal
history background check under section 2(d)(1) of this chapter, the
director shall require the individual to submit fingerprints to the
department, state police department, or NMLSR, as directed, at
the time evidence of compliance is requested under section 2(c) of
this chapter. The individual to whom the request is made shall pay
any fees or costs associated with processing and evaluating the
fingerprints and the national criminal history background check.
The national criminal history background check may be used by
the director to determine the individual's compliance with this
section. The director or the department may not release the results
of the national criminal history background check to any private
entity.
(b) For purposes of this section and in order to reduce the points
of contact that the Federal Bureau of Investigation may have to
maintain for purposes of this section, the director may use the
NMLSR as a channeling agent for requesting information from
and distributing information to the United States Department of
Justice or any governmental agency.
(c) If an individual:
(1) has been convicted of or pleaded guilty or nolo contendere
to a felony during the seven (7) year period preceding the date
of the application; or
(2) has, at any time preceding the date of application, been
convicted of or pleaded guilty or nolo contendere to a felony
involving an act of fraud, dishonesty, breach of trust, or
money laundering;
the individual may not be approved for licensing as a mortgage
loan originator under this article.
Sec. 4. (a) If the director requests a credit report under section
2 of this chapter, the individual to whom the request is made shall
pay any fees or costs associated with procuring the report.
(b) An individual shall submit personal history and experience
information in a form prescribed by the NMLSR, including the
submission of authorization for the NMLSR or the director to
obtain an independent credit report obtained from a consumer
reporting agency described in Section 603(p) of the Fair Credit
Reporting Act (15 U.S.C. 1681a(p)).
(c) The director may consider one (1) or more of the following
when determining if an individual has demonstrated financial
responsibility:
(1) Bankruptcies filed within the last ten (10) years.
(2) Current outstanding judgments, except judgments solely
as a result of medical expenses.
(3) Current outstanding tax liens or other government liens or
filings.
(4) Foreclosures within the past three (3) years.
(5) A pattern of serious delinquent accounts within the past
three (3) years.
Sec. 5. (a) To meet the prelicensing education requirements
referred to in section 2(d)(3) of this chapter, a person shall
complete at least twenty (20) hours of education approved in
accordance with subsection (b), which must include at least the
following:
(1) Three (3) hours of federal law and regulations.
(2) Three (3) hours of ethics, which must include instruction
on fraud, consumer protection, and fair lending issues.
(3) Two (2) hours of training related to lending standards for
the nontraditional mortgage product marketplace.
(b) For purposes of subsection (a), prelicensing education
courses shall be reviewed and approved by the NMLSR based upon
reasonable standards. Review and approval of a prelicensing
education course must include review and approval of the course
provider.
(c) The NMLSR may approve a prelicensing education course
that is provided by an employer of the applicant or an entity that
is affiliated with the applicant by an agency contract, or any
subsidiary or affiliate of the employer or entity.
(d) Prelicensing education may be offered in a classroom, online,
or by any other means approved by the NMLSR.
(e) The prelicensing education requirements approved by the
NMLSR in subsection (a) for any state shall be accepted as
completion of prelicensing education requirements in this state.
(f) A person formerly licensed under this article, applying to be
licensed again, shall prove that the person has completed all the
continuing education requirements for the year in which the license
was last held.
Sec. 6. (a) To meet the written test requirement referred to in
section 2(d)(4) of this chapter, an individual must pass, in
accordance with the standards established under this section, a
qualified written test developed by the NMLSR and administered
by a test provider approved by the NMLSR based upon reasonable
standards.
(b) A written test may not be treated as a qualified written test
for purposes of subsection (a) unless the test adequately measures
the applicant's knowledge and comprehension in appropriate
subject areas, including:
(1) ethics;
(2) federal law and regulation pertaining to mortgage
origination;
(3) state law and regulation pertaining to mortgage
origination; and
(4) federal and state law and regulation, including instruction
on fraud, consumer protection, the nontraditional mortgage
marketplace, and fair lending issues.
(c) This section does not prohibit a test provider approved by
the NMLSR from providing a test at the location of:
(1) the employer of the applicant;
(2) any subsidiary or affiliate of the employer of the applicant;
or
(3) any entity with which the applicant holds an exclusive
arrangement to conduct the business of a mortgage loan
originator.
(d) The following are the standards for demonstrating minimum
competence with respect to the testing requirement:
(1) Passing Score - An individual does not pass a qualified
written test unless the individual achieves a test score of at
least seventy-five percent (75%) correct answers to questions.
(2) Initial Retests - An individual may retake a test three (3)
consecutive times with each consecutive test taken at least
thirty (30) days after the preceding test.
(3) Subsequent Retests - After failing three (3) consecutive
tests, an individual must wait at least six (6) months before
taking the test again.
(4) Retest After Lapse of License - A licensed mortgage loan
originator who fails to maintain a valid license for a period of
at least five (5) years must retake the test to be issued a new
license, not taking into account any time during which the
individual is a registered mortgage loan originator.
Sec. 7. (a) Each creditor and mortgage loan originator must be
covered by a surety bond in accordance with this section. If a
mortgage loan originator is an employee or exclusive agent of:
(1) a person subject to licensing under IC 24-4.4 or IC 24-4.5;
or
(2) an entity exempt from licensing under IC 24-4.4 or
IC 24-4.5 that registers with the NMLSR;
the surety bond of the person subject to licensing under IC 24-4.4
or IC 24-4.5 or entity exempt from licensing under IC 24-4.4 or
IC 24-4.5 that registers with the NMLSR may be used instead of
the mortgage loan originator's surety bond requirement under this
section.
(b) A surety bond:
(1) must provide coverage for each mortgage loan originator
in an amount prescribed in subsection (d); and
(2) must be in a form prescribed by the director.
(c) The director may adopt rules or guidance with respect to the
requirements for a surety bond as are necessary to accomplish the
purposes of this article.
(d) The penal sum of the surety bond shall be maintained in an
amount that reflects the dollar amount of mortgage transactions
originated as determined by the director.
(e) If an action is commenced on the surety bond of a:
(1) licensee; or
(2) person subject to or an entity exempt from licensing under
IC 24-4.4 or IC 24-4.5 as described under subsection (a);
the director may require the filing of a new bond.
(f) A:
(1) licensee; or
(2) person subject to or an entity exempt from licensing under
IC 24-4.4 or IC 24-4.5 as described under subsection (a);
shall file a new surety bond immediately upon recovery of any
action on the surety bond required under this section.
Sec. 8. (a) Subject to subsection (f), the director shall designate
the NMLSR to serve as the sole entity responsible for:
(1) processing applications and renewals for licenses under
this article;
(2) issuing unique identifiers for:
(A) licensees under this article;
(B) creditors licensed under IC 24-4.4 or IC 24-4.5; and
(C) entities exempt from licensing under IC 24-4.4 and
IC 24-4.5 that employ licensed mortgage loan originators;
and
(3) performing other services that the director determines are
necessary for the orderly administration of the department's
licensing system under this article.
(b) Subject to the confidentiality provisions contained in
IC 5-14-3, this section, and IC 28-1-2-30, the director shall
regularly report significant or recurring violations of this article
to the NMLSR.
(c) Subject to the confidentiality provisions contained in
IC 5-14-3, this section, and IC 28-1-2-30, the director may report
complaints received regarding licensees under this article to the
NMLSR.
(d) The director shall report publicly adjudicated licensure
actions against a licensee to the NMLSR.
(e) The director shall establish a process in which licensees may
challenge information reported to the NMLSR by the department.
(f) The director's authority to designate the NMLSR under
subsection (a) is subject to the following:
(1) Except with respect to:
(A) a privately insured state chartered credit union; and
(B) entities exempt from licensing under IC 24-4.4 or
IC 24-4.5 that employ licensed mortgage loan originators;
the director or the director's designee may not require any
person exempt from licensure under this article, or any
employee or agent of an exempt person, to submit information
to or participate in the NMLSR.
(2) Information stored in the NMLSR is subject to the
confidentiality provisions of IC 28-1-2-30 and IC 5-14-3. A
person may not:
(A) obtain information from the NMLSR, unless the
person is authorized to do so by statute;
(B) initiate any civil action based on information obtained
from the NMLSR if the information is not otherwise
available to the person under any other state law; or
(C) initiate any civil action based on information obtained
from the NMLSR if the person could not have initiated the
action based on information otherwise available to the
person under any other state law.
(3) Documents, materials, and other forms of information in
the control or possession of the NMLSR that are confidential
under IC 28-1-2-30 and that are:
(A) furnished by the director, the director's designee, or a
licensee; or
(B) otherwise obtained by the NMLSR;
are confidential and privileged by law and are not subject to
inspection under IC 5-14-3, subject to subpoena, subject to
discovery, or admissible in evidence in any civil action.
However, the director may use the documents, materials, or
other information available to the director in furtherance of
any action brought in connection with the director's duties
under this article.
(4) Disclosure of documents, materials, and information:
(A) to the director; or
(B) by the director;
under this section does not result in a waiver of any applicable
privilege or claim of confidentiality with respect to the
documents, materials, or information.
(5) Information provided to the NMLSR is subject to
IC 4-1-11.
(6) This section does not limit or impair a person's right to:
(A) obtain information;
(B) use information as evidence in a civil action or
proceeding; or
(C) use information to initiate a civil action or proceeding;
if the information may be obtained from the director or the
director's designee under any law.
(7) Except as otherwise provided in Public Law 110-289,
Section 1512, the requirements under any federal law or
IC 5-14-3 regarding the privacy or confidentiality of any
information or material provided to the NMLSR, and any
privilege arising under federal or state law, including the
rules of any federal or state court, with respect to the
information or material, continues to apply to the information
or material after the information or material has been
disclosed to the NMLSR. The information and material may
be shared with all state and federal regulatory officials with
mortgage industry oversight authority without the loss of
privilege or the loss of confidentiality protections provided by
federal law or IC 5-14-3.
(8) For purposes of this section, the director may enter
agreements or sharing arrangements with other governmental
agencies, the Conference of State Bank Supervisors, the
American Association of Residential Mortgage Regulators, or
other associations representing governmental agencies as
established by rule or order of the director.
(9) Information or material that is subject to a privilege or
confidentiality under subdivision (7) is not subject to:
(A) disclosure under any federal or state law governing the
disclosure to the public of information held by an officer or
an agency of the federal government or the respective
state; or
(B) subpoena, discovery, or admission into evidence in any
private civil action or administrative process, unless with
respect to any privilege held by the NMLSR with respect
to the information or material, the person to whom the
information or material pertains waives, in whole or in
part, in the discretion of the person, that privilege.
(10) IC 5-14-3 relating to the disclosure of confidential
supervisory information or any information or material
described in subdivision (7) that is inconsistent with
subdivision (7) is superseded by the requirements of this
section.
(11) This section does not apply with respect to the
information or material relating to the employment history of,
and publicly adjudicated disciplinary and enforcement actions
against, a licensed mortgage loan originator that are included
in the NMLSR for access by the public.
(12) The director may require a licensee required to submit
information to the NMLSR to pay a processing fee considered
reasonable by the director.
Sec. 9. (a) The minimum standards for license renewal for
mortgage loan originators include the following:
(1) The mortgage loan originator continues to meet the
minimum standards for license issuance under section 2 of
this chapter.
(2) The mortgage loan originator has satisfied the annual
continuing education requirements described in section 10 of
this chapter.
(3) The mortgage loan originator has paid all required fees for
renewal of the license.
(b) If a mortgage loan originator fails to satisfy the minimum
standards for license renewal, the mortgage loan originator's
license expires. The director may adopt procedures for the
reinstatement of expired licenses consistent with the standards
established by the NMLSR.
Sec. 10. (a) To meet the annual continuing education
requirements referred to in section 9 of this chapter, a licensed
mortgage loan originator shall complete at least eight (8) hours of
education approved in accordance with subsection (b), which must
include at least the following:
(1) Three (3) hours of federal law and regulations.
(2) Two (2) hours of ethics, which must include instruction on
fraud, consumer protection, and fair lending issues.
(3) Two (2) hours of training related to lending standards for
the nontraditional mortgage product marketplace.
(b) For purposes of subsection (a), continuing education courses
shall be reviewed and approved by the NMLSR based upon
reasonable standards. Review and approval of a continuing
education course must include review and approval of the course
provider.
(c) The NMLSR may approve an education course that is
provided by:
(1) a creditor;
(2) an employer of the mortgage loan originator; or
(3) an entity that is affiliated with the creditor or employer of
the mortgage loan originator by an agency contract; or
(4) any subsidiary or affiliate of an employer or entity
described in subsection (2) or (3).
(d) Continuing education may be offered in a classroom, online,
or by any other means approved by the NMLSR.
(e) An individual subject to the continuing education
requirements under this section:
(1) except as provided in section 9(b) of this chapter and
subsection (i), may receive credit for a continuing education
course only in the year in which the course is taken; and
(2) may not take the same approved course in the same or
successive years to meet the annual requirements for
continuing education.
(f) An individual subject to the continuing education
requirements under this section who is an approved instructor of
approved continuing education courses may receive credit for the
individual's own annual continuing education requirement at the
rate of two (2) hours credit for every one (1) hour taught.
(g) A person who has successfully completed the education
requirements approved by the NMLSR in subsection (a) for any
state shall be accepted as completion of the continuing education
requirements in this state.
(h) A licensed mortgage loan originator who becomes unlicensed
must complete the continuing education requirements for the last
year in which the license was held before issuance of a new or
renewed license.
(i) A person meeting the requirements of section 9(a)(1) and
9(a)(3) of this chapter may make up any deficiency in continuing
education as established by rule of the department or policy of the
director.
Sec. 11. (a) The department may issue to a person licensed to
engage in a mortgage transaction as a mortgage loan originator an
order to show cause why the person's license should not be revoked
or suspended for a period determined by the department. The
order must state the place and time for a meeting with the
department that is not less than ten (10) days after the date of the
order. After the meeting, the department shall revoke or suspend
the license if the department finds that:
(1) the licensee has repeatedly and willfully violated:
(A) this article or any rule or order lawfully adopted or
issued under this article; or
(B) any other state or federal law, regulation, or rule
applicable to a mortgage transaction;
(2) the licensee does not meet the licensing qualifications
contained in section 2 of this chapter; or
(3) facts or conditions exist that would clearly have justified
the department in refusing to grant a license had the facts or
conditions been known to exist at the time the application for
the license was made.
(b) Except as provided in section 9(b) of this chapter, a
suspension or revocation of a license is not authorized under this
article unless before instituting proceedings to suspend or revoke
the license, the:
(1) department gives notice to the licensee of the conduct or
facts that warrant the intended suspension or revocation; and
(2) licensee is given an opportunity to show compliance with
all lawful requirements for retention of the license.
(c) If the department finds that probable cause for revocation
of a license exists and that enforcement of this article requires
immediate suspension of the license pending investigation, the
department may, after a hearing with the licensee upon five (5)
days written notice to the licensee, enter an order suspending the
license for not more than thirty (30) days.
(d) Whenever the department revokes or suspends a license, the
department shall enter an order to that effect and notify the
licensee of the revocation or suspension. Not later than five (5) days
after an order is entered to suspend or revoke a license, the
department shall deliver to the licensee a copy of the order and the
findings supporting the order.
(e) Any person holding a license to engage in a mortgage
transaction as a mortgage loan originator may relinquish the
license by notifying the department in writing of the
relinquishment. However, a relinquishment under this subsection
does not affect the person's liability for acts previously committed
and coming within the scope of this article.
(f) If the director determines it to be in the public interest, the
director may pursue revocation of a license of a licensee who has
relinquished the license under subsection (e).
(g) A revocation, suspension, or relinquishment of a license does
not impair or affect the obligation of any preexisting lawful
contract between:
(1) the person whose license has been revoked, suspended, or
relinquished; and
(2) any debtor.
(h) The department may reinstate a license to or terminate a
suspension of a license of a person whose license has been
suspended if the director determines that, at the time the
determination is made, there is no fact or condition that exists that
clearly would justify the department in refusing to reinstate a
license.
(i) If the director:
(1) has just cause to believe an emergency exists from which
it is necessary to protect the interests of the public; or
(2) determines that a license was obtained for the benefit of,
or on behalf of, a person who does not qualify for a license;
the director may proceed with the revocation of the license under
IC 4-21.5-3-6.
Chapter 4. Records; Miscellaneous
Sec. 1. (a) Every licensee shall maintain records in a manner
that will enable the department to determine whether the licensee
is complying with this article. The record keeping system of a
licensee is sufficient if the licensee makes the required information
reasonably available. The department shall determine the
sufficiency of the records and whether the licensee has made the
required information reasonably available. The department shall
be given free access to the records wherever the records are
located. Records concerning any mortgage transaction shall be
retained for two (2) years after the making of the final entry
relating to the transaction, but in the case of a revolving mortgage
transaction, the two (2) years required under this subsection is
measured from the date of each entry relating to the transaction.
(b) The unique identifier of any person originating a mortgage
transaction must be clearly shown on all mortgage transaction
application forms and any other documents as required by the
director.
(c) Every licensee shall use automated examination and
regulatory software designated by the director, including third
party software. Use of the software consistent with guidance and
policies issued by the director is not a violation of IC 28-1-2-30.
(d) A licensed mortgage loan originator shall file notification
with the department if the licensed mortgage loan originator:
(1) files for bankruptcy or is served in a foreclosure action; or
(2) is subject to revocation or suspension proceedings by a
state government authority with regard to the mortgage loan
originator's activities;
not later than thirty (30) days after the date of the event described
in this subsection.
(e) A licensee shall file notification with the department if the
licensee has been convicted of or pleaded guilty or nolo contendere
to a felony under the laws of Indiana or any other jurisdiction not
later than thirty (30) days after the date of the event described in
this subsection.
Sec. 2. A mortgage loan originator shall comply with
IC 6-1.1-12-43, to the extent applicable.
Sec. 3. A violation by a mortgage loan originator in a mortgage
transaction of Section 125 of the Federal Consumer Protection Act
(15 U.S.C. 1635) concerning a debtor's right to rescind a
transaction constitutes a violation of this article.
Chapter 5. Compliance; Enforcement
Sec. 1. This article applies to a person that engages as a
mortgage loan originator in a mortgage transaction in Indiana.
The authority of this article remains in effect whether a licensee
acts or claims to act under any licensing or registration law of this
state or claims to act without such authority.
Sec. 2. (a) In addition to other powers granted by this article,
the department, within the limitations provided by law, may:
(1) receive and act on complaints, take action designed to
obtain voluntary compliance with this article, or commence
proceedings on the department's own initiative;
(2) counsel persons and groups on their rights and duties
under this article;
(3) adopt, amend, and repeal rules, orders, policies, and forms
to carry out this article; and
(4) appoint any necessary attorneys, hearing examiners,
clerks, and other employees and agents and fix their
compensation, and authorize attorneys appointed under this
section to appear for and represent the department in court.
(b) Liability may not be imposed under this article for an act
done or omitted in conformity with a rule, written notice, written
opinion, written interpretation, or written directive of the
department, notwithstanding the fact that after the act is done or
omitted the rule, written notice, written opinion, written
interpretation, or written directive is for any reason:
(1) amended or repealed; or
(2) determined by judicial or other authority to be invalid.
Sec. 3. (a) In administering this article and in order to determine
whether this article is being complied with by persons engaging in
acts subject to this article, the department may examine the
records of persons and may make investigations of persons as
necessary to determine compliance. Records subject to
examination under this section include the following:
(1) Training, operating, and policy manuals.
(2) Minutes of:
(A) management meetings; and
(B) other meetings.
(3) Financial records, credit files, and data bases.
(4) Other records that the department determines are
necessary to perform its investigation or examination.
(b) The department may:
(1) administer oaths or affirmations, subpoena witnesses, and
compel the attendance of witnesses; and
(2) adduce evidence and require the production of any matter
that is relevant to an investigation.
The department shall determine the sufficiency of the records
maintained and whether the person has made the required
information reasonably available. The records concerning any
transaction subject to this article shall be retained for two (2) years
after the making of the final entry relating to the mortgage
transaction, but in the case of a revolving mortgage transaction the
two (2) year period is measured from the date of each entry.
(c) The department's examination and investigatory authority
under this article includes the authority to investigate complaints
filed with the department by debtors.
(d) The department shall be given free access to the records
wherever the records are located. In making any examination or
investigation authorized by this article, the director may control
access to any documents and records of a licensee. The director
may take possession of the documents and records or place a
person in exclusive charge of the documents and records in the
place where the documents are usually kept. During the period of
control, a licensee may not remove or attempt to remove any of the
documents and records except under a court order or with the
consent of the director. Unless the director has reasonable grounds
to believe the documents or records of the licensee have been, or
are, at risk of being altered or destroyed for purposes of concealing
a violation of this article, the licensee shall have access to the
documents or records as necessary to conduct the licensee's
ordinary business affairs. If the licensee's records are located
outside Indiana, the records shall be made available to the
department at a convenient location within Indiana, or the licensee
shall pay the reasonable and necessary expenses for the
department or the department's representative to examine the
records where they are maintained. The department may designate
comparable officials of the state in which the records are located
to inspect the records on behalf of the department.
(e) Upon a licensee's failure without lawful excuse to obey a
subpoena or to give testimony and upon reasonable notice by the
department to all affected persons, the department may apply to
any civil court with jurisdiction for an order compelling
compliance.
(f) The department shall not make public:
(1) the name or identity of a person whose acts or conduct the
department investigates under this section; or
(2) the facts discovered in the investigation.
However, this subsection does not apply to civil actions or
enforcement proceedings under this article.
Sec. 4. To carry out the purposes of this article, the director
may:
(1) retain attorneys, accountants, or other professionals and
specialists as examiners, auditors, or investigators to conduct
or assist in the conduct of examinations or investigations;
(2) enter into agreements or relationships with other
government officials or regulatory associations to improve
efficiencies and reduce regulatory burden by sharing:
(A) resources;
(B) standardized or uniform methods or procedures; and
(C) documents, records, information, or evidence obtained
under this section;
(3) use, hire, contract, or employ public or privately available
analytical systems, methods, or software to examine or
investigate a licensee; and
(4) accept and rely on examination or investigation reports
made by other government officials within or outside Indiana.
Sec. 5. It is a violation of this article for a licensee to:
(1) directly or indirectly, employ any scheme, device, or
artifice to defraud or mislead borrowers or lenders or to
defraud any person;
(2) engage in any unfair or deceptive practice toward any
person;
(3) obtain property by fraud or misrepresentation;
(4) solicit or enter into a contract with a borrower that
provides in substance that the licensee may earn a fee or
commission through "best efforts" to obtain a loan even
though no loan is actually obtained for the borrower;
(5) solicit, advertise, or enter into a contract for specific
interest rates, points, or other financing terms unless the
terms are actually available at the time of soliciting,
advertising, or contracting;
(6) conduct any business covered by this article without
holding a valid license as required under this article, or assist
or aid and abet any person in the conduct of business under
this article without a valid license as required under this
article;
(7) fail to make disclosures as required by this article or
regulation adopted under this article and any other applicable
state or federal law or regulation;
(8) fail to comply with this article or rules or guidance
adopted under this article, or fail to comply with any other
state or federal law, rule, or regulation, applicable to any
business authorized or conducted under this article;
(9) make, in any manner, a false or deceptive statement or
representation, with regard to the rates, points, or other
financing terms or conditions for a mortgage transaction, or
engage in bait and switch advertising;
(10) negligently make any false statement or knowingly and
willfully make any omission of material fact in connection
with any information or reports filed with a governmental
agency or the NMLSR or in connection with any investigation
conducted by the director or another governmental agency;
(11) make any payment, threat, or promise, directly or
indirectly, to any person for the purposes of influencing the
independent judgment of the person in connection with a
mortgage transaction, or make any payment, threat, or
promise, directly or indirectly, to any appraiser of a property,
for the purposes of influencing the independent judgment of
the appraiser with respect to the value of the property;
(12) collect, charge, attempt to collect or charge, or use or
propose any agreement purporting to collect or charge any
fee prohibited by this article;
(13) cause or require a borrower to obtain property insurance
coverage in an amount that exceeds the replacement cost of
the improvements as established by the property insurer;
(14) fail to account truthfully for money belonging to a party
to a mortgage transaction; or
(15) knowingly withhold, abstract, remove, mutilate, destroy,
or secrete any books, records, computer records, or other
information subject to examination under this article.
Sec. 6. Except as otherwise provided, IC 4-21.5-3 governs any
action taken by the department under this article. IC 4-22-2 applies
to the adoption of rules by the department under this article. All
proceedings for administrative review under IC 4-21.5-3 or judicial
review under IC 4-21.5-5 shall be held in Marion County, Indiana.
However, if the department determines that an emergency exists,
the department may adopt any rules authorized by this article
under IC 4-22-2-37.1.
Sec. 7. (a) After notice and hearing, the department may order
a mortgage loan originator or a person acting on behalf of the
mortgage loan originator to cease and desist from engaging in
violations of this article. In any civil court with jurisdiction:
(1) a respondent aggrieved by an order of the department
may obtain judicial review of the order; and
(2) the department may obtain an order of the court for the
enforcement of the department's order.
A proceeding for review or enforcement under this subsection must
be initiated by the filing of a petition in the court. Copies of the
petition shall be served upon all parties of record.
(b) Not later than thirty (30) days after service of a petition for
review upon the department under subsection (a), or within such
further time as the court allows, the department shall transmit to
the court the original or a certified copy of the entire record upon
which the order that is the subject of the review is based, including
any transcript of testimony, which need not be printed. By
stipulation of all parties to the review proceeding, the record may
be shortened. After conducting a hearing on the matter, the court
may:
(1) reverse or modify the order if the findings of fact of the
department are clearly erroneous in view of the reliable,
probative, and substantial evidence in the whole record;
(2) grant any temporary relief or restraining order the court
considers just and enter an order:
(A) enforcing;
(B) modifying;
(C) enforcing as modified; or
(D) setting aside;
in whole or in part, the order of the department; or
(3) enter an order remanding the case to the department for
further proceedings.
(c) An objection not urged at the hearing shall not be considered
by the court unless the failure to urge the objection is excused for
good cause shown. A party may move the court to remand the case
to the department in the interest of justice for the purpose of:
(1) adducing additional specified and material evidence; and
(2) seeking a finding upon the evidence;
upon good cause shown for the failure to previously adduce the
evidence before the department.
(d) The jurisdiction of the court is exclusive, and the court's
final judgment or decree is subject to review on appeal in the same
manner and form and with the same effect as in appeals from a
final judgment or decree. The department's copy of the testimony
shall be available at reasonable times to all parties for examination
without cost.
(e) A proceeding for review under this section must be initiated
not later than thirty (30) days after a copy of the order of the
department is received. If a proceeding is not initiated within the
time set forth in this subsection, the department may obtain a
decree of a civil court with jurisdiction for enforcement of the
department's order upon a showing that:
(1) the order was issued in compliance with this section;
(2) a proceeding for review was not initiated within the thirty
(30) day period prescribed by this subsection; and
(3) the respondent is subject to the jurisdiction of the court.
(f) With respect to an unconscionable agreement or fraudulent
or unconscionable conduct by a respondent, the department may
not issue an order under this section but may bring a civil action
for an injunction under section 9 of this chapter.
established by IC 5-20-1-3.
(5) A supervised financial organization.
(6) An operating subsidiary that is majority owned, directly or
indirectly, by a supervised financial organization to the extent the
operating subsidiary is regulated by the chartering authority of the
supervised financial organization.
(5) Except for IC 24-4.4-2-401(2), IC 24-4.4-2-402.3,
IC 24-4.4-2-405(4), and IC 24-4.4-2-405(5), a first lien
mortgage transaction made by an entity using funds provided
by the United States Department of Housing and Urban
Development under Title 1 of the Housing and Community
Development Act of 1974, Public Law 93-383, as amended (42
U.S.C. 5301 et seq.).
(6) An extension of credit originated by:
(a) a depository institution;
(b) subsidiaries that are:
(i) owned and controlled by a depository institution; and
(ii) regulated by a federal banking agency; or
(c) an institution regulated by the Farm Credit
Administration.
(7) Except for IC 24-4.4-2-401(2), IC 24-4.4-2-402.3,
IC 24-4.4-2-405(4), and IC 24-4.4-2-405(5), a credit union
service organization that is majority owned, directly or indirectly,
by one (1) or more credit unions.
(8) A first lien mortgage transaction originated by a
registered mortgage loan originator, when acting for an entity
described in subdivision (6). However, a privately insured
state chartered credit union shall comply with the system of
mortgage loan originator registration developed by the
Federal Financial Institutions Examinations Council under
Section 1507 of the Safe and Fair Enforcement for Mortgage
Licensing Act of 2008 (SAFE).
(9) An individual who offers or negotiates terms of a mortgage
transaction with or on behalf of an immediate family member
of the individual.
(10) An individual who offers or negotiates terms of a
mortgage transaction secured by a dwelling that served as the
individual's residence.
(11) Unless the attorney is compensated by:
(a) a lender;
(b) a mortgage broker;
(c) another mortgage loan originator; or
(d) any agent of the lender, mortgage broker, or other
mortgage loan originator described in clauses (a) through
(c);
a licensed attorney who negotiates the terms of a mortgage
transaction on behalf of a client as an ancillary matter to the
attorney's representation of the client.
(8) (12) Agencies, instrumentalities, and government owned
corporations of the United States, including United States
government sponsored enterprises.
the agricultural products.
(5) "Consumer credit sale" is a sale of goods, services, or an
interest in land in which:
(a) credit is granted by a person who regularly engages as
a seller in credit transactions of the same kind;
(b) the buyer is a person other than an organization;
(c) the goods, services, or interest in land are purchased
primarily for a personal, family, or household purpose;
(d) either the debt is payable in installments or a finance
charge is made; and
(e) with respect to a sale of goods or services, either the
amount financed does not exceed fifty thousand dollars
($50,000) or the debt is secured by personal property used
or expected to be used as the principal dwelling of the
buyer.
(1) (6) "Credit" means the right granted by a creditor to a debtor
to defer payment of debt or to incur debt and defer its payment.
(2) (7) "Creditor" means a person:
(a) that regularly engages in the extension of first lien
mortgage transactions that are subject to a credit service
charge or loan finance charge, as applicable, or are payable by
written agreement in more than four (4) installments (not
including a down payment); and
(b) to which the obligation is initially payable, either on the
face of the note or contract, or by agreement if there is not a
note or contract.
The term does not include a person described in subsection
(13)(a) 31(a) in a tablefunded transaction. A creditor may be an
individual, a limited liability company, a sole proprietorship,
a partnership, a trust, a joint venture, a corporation, an
unincorporated organization, or other form of entity, however
organized.
(3) (8) "Department" refers to the members of the department of
financial institutions.
(9) "Depository institution" has the meaning set forth in the
Federal Deposit Insurance Act (12 U.S.C. 1813(c)) and
includes any credit union.
(4) (10) "Director" refers to the director of the department of
financial institutions or the director's designee.
(5) (11) "Dwelling" means a residential structure that contains
one (1) to four (4) units, regardless of whether the structure is
attached to real property. The term includes an individual:
household purposes.
(22) ''Nationwide Mortgage Licensing System and Registry''
or "NMLSR" means a mortgage licensing system developed
and maintained by the Conference of State Bank Supervisors
and the American Association of Residential Mortgage
Regulators for the licensing and registration of creditors and
mortgage loan originators.
(23) ''Nontraditional mortgage product'' means any mortgage
product other than a thirty (30) year fixed rate mortgage.
(24) "Organization" means a corporation, a government or
government subdivision, an agency, a trust, an estate, a
partnership, a limited liability company, a cooperative, an
association, a joint venture, an unincorporated organization,
or any other entity, however organized.
(8) (25) "Payable in installments", with respect to a debt or an
obligation, means that payment is required or permitted by written
agreement to be made in more than four (4) installments not
including a down payment.
(9) (26) "Person" includes an individual or an organization.
(10) A person is "regularly engaged" as a creditor in first lien
mortgage transactions in Indiana if:
(a) the person acted as a creditor in first lien mortgage
transactions in Indiana more than five (5) times in the
preceding calendar year; or
(b) the person did not meet the numerical standards set forth
in subdivision (a) in the preceding calendar year, but has or
will meet the numerical standards set forth in subdivision (a)
in the current calendar year.
(27) "Principal" of a mortgage transaction means the total of:
(a) the net amount paid to, receivable by, or paid or
payable for the account of the debtor; and
(b) to the extent that payment is deferred, amounts
actually paid or to be paid by the creditor for registration,
certificate of title, or license fees if not included in clause
(a).
(28) "Real estate brokerage activity" means any activity that
involves offering or providing real estate brokerage services
to the public, including the following:
(a) Acting as a real estate agent or real estate broker for a
buyer, seller, lessor, or lessee of real property.
(b) Bringing together parties interested in the sale,
purchase, lease, rental, or exchange of real property.
(c) Negotiating, on behalf of any party, any part of a
contract relating to the sale, purchase, lease, rental, or
exchange of real property (other than in connection with
providing financing with respect to the sale, purchase,
lease, rental, or exchange of real property).
(d) Engaging in any activity for which a person engaged in
the activity is required to be registered or licensed as a real
estate agent or real estate broker under any applicable
law.
(e) Offering to engage in any activity, or act in any
capacity, described in this subdivision.
(29) ''Registered mortgage loan originator'' means any
individual who:
(a) meets the definition of mortgage loan originator and is
an employee of:
(i) a depository institution;
(ii) a subsidiary that is owned and controlled by a
depository institution and regulated by a federal banking
agency; or
(iii) an institution regulated by the Farm Credit
Administration; and
(b) is registered with, and maintains a unique identifier
through, the NMLSR.
(11) (30) "Revolving first lien mortgage transaction" means an
arrangement between a creditor and a debtor in which:
(a) the creditor permits the debtor to obtain advances from
time to time;
(b) the unpaid balances of principal, credit service charges, or
loan finance charges, and other appropriate charges are
debited to an account; and
(c) the debtor has the privilege of paying the balances in
installments.
(12) "Supervised financial organization" means a person that is:
(a) organized, chartered, or holding an authorization certificate
under the laws of a state or of the United States that authorizes
the person to make loans and to receive deposits, including
deposits into a savings, share, certificate, or deposit account;
and
(b) subject to supervision by an official or agency of a state or
of the United States.
(13) (31) "Tablefunded" means a transaction in which:
(a) a person closes a first lien mortgage transaction in the
person's own name as a mortgagee with funds provided by one
(1) or more other persons; and
(b) the transaction is assigned simultaneously to the mortgage
creditor providing the funding not later than one (1) business
day after the funding of the transaction.
(32) "Unique identifier" means a number or other identifier
assigned by protocols established by the NMLSR.
may be used by the director to determine the individual's compliance
with this section. The director or the department may not release the
results of the national criminal history background check to any private
entity.
(5) For purposes of this section and in order to reduce the points
of contact that the director may have to maintain for purposes of
this section, the director may use the NMLSR as a channeling
agent for requesting and distributing information to and from any
source so directed by the director.
(5) (6) The department may deny an application under this section
if the director of the department determines that the application was
submitted for the benefit of, or on behalf of, a person who does not
qualify for a license.
(6) (7) Upon written request, the applicant is entitled to a hearing on
the question of the qualifications of the applicant for a license in the
manner provided in IC 4-21.5.
(7) (8) The applicant shall pay the following fees at the time
designated by the department:
(a) An initial license fee as established by the department under
IC 28-11-3-5.
(b) An annual renewal fee as established by the department under
IC 28-11-3-5.
(c) Examination fees as established by the department under
IC 28-11-3-5.
(8) (9) A fee as established by the department under IC 28-11-3-5
may be charged for each day the annual renewal fee a fee under
subsection (7)(b) is 8(b) or 8(c) is delinquent.
(9) (10) A license issued under this section is not assignable or
transferable.
(10) Subject to subsection (11), the director may designate an
automated central licensing system and repository, operated by a third
party, to serve as the sole entity responsible for:
(a) processing applications and renewals for licenses under this
section; and
(b) performing other services that the director determines are
necessary for the orderly administration of the department's
licensing system under this article.
(11) The director's authority to designate an automated central
licensing system and repository under subsection (10) is subject to the
following:
(a) The director or the director's designee may not require any
person exempt from licensure under this article, or any employee
or agent of an exempt person, to:
(i) submit information to; or
(ii) participate in;
the automated central licensing system and repository.
(b) Information stored in the automated central licensing system
and repository is subject to the confidentiality provisions of
IC 28-1-2-30 and IC 5-14-3. A person may not:
(i) obtain information from the automated central licensing
system and repository, unless the person is authorized to do so
by statute;
(ii) initiate any civil action based on information obtained
from the automated central licensing system if the information
is not otherwise available to the person under any other state
law; or
(iii) initiate any civil action based on information obtained
from the automated central licensing system if the person
could not have initiated the action based on information
otherwise available to the person under any other state law.
(c) Documents, materials, and other forms of information in the
control or possession of the automated central licensing system
and repository that are confidential under IC 28-1-2-30 and that
are:
(i) furnished by the director, the director's designee, or a
licensee; or
(ii) otherwise obtained by the automated central licensing
system and repository;
are confidential and privileged by law and are not subject to
inspection under IC 5-14-3, subject to subpoena, subject to
discovery, or admissible in evidence in any civil action. However,
the director or the director's designee may use the documents,
materials, or other information available to the director or the
director's designee in furtherance of any action brought in
connection with the director's duties under this article.
(d) Disclosure of documents, materials, and information:
(i) to the director or the director's designee; or
(ii) by the director or the director's designee;
under this subsection does not result in a waiver of any applicable
privilege or claim of confidentiality with respect to the
documents, materials, or information.
(e) Information provided to the automated central licensing
system and repository is subject to IC 4-1-11.
(f) This subsection does not limit or impair a person's right to:
reporting agency described in Section 603(p) of the Fair Credit
Reporting Act (15 U.S.C. 1681a(p)).
(3) The director may consider one (1) or more of the following
when determining if an individual has demonstrated financial
responsibility:
(a) Bankruptcies filed within the last ten (10) years.
(b) Current outstanding judgments, except judgments solely
as a result of medical expenses.
(c) Current outstanding tax liens or other government liens or
filings.
(d) Foreclosures within the past three (3) years.
(e) A pattern of serious delinquent accounts within the past
three (3) years.
(6), the director shall designate the NMLSR to serve as the sole
entity responsible for:
(a) processing applications and renewals for licenses under
this article;
(b) issuing unique identifiers for licensees and entities exempt
from licensing under this article that employ a licensed
mortgage loan originator under this article; and
(c) performing other services that the director determines are
necessary for the orderly administration of the department's
licensing system under this article.
(2) Subject to the confidentiality provisions contained in
IC 5-14-3, this section, and IC 28-1-2-30, the director shall
regularly report significant or recurring violations of this article
to the NMLSR.
(3) Subject to the confidentiality provisions contained in
IC 5-14-3, this section, and IC 28-1-2-30, the director may report
complaints received regarding licensees under this article to the
NMLSR.
(4) The director may report publicly adjudicated licensure
actions against a licensee to the NMLSR.
(5) The director shall establish a process in which licensees may
challenge information reported to the NMLSR by the department.
(6) The director's authority to designate the NMLSR under
subsection (1) is subject to the following:
(a) Except with respect to a privately insured state chartered
credit union and entities exempt from licensing under this
article that employ licensed mortgage loan originators, the
director or the director's designee may not require any person
exempt from licensure under this article, or any employee or
agent of an exempt person, to:
(i) submit information to; or
(ii) participate in;
the NMLSR.
(b) Information stored in the NMLSR is subject to the
confidentiality provisions of IC 28-1-2-30 and IC 5-14-3. A
person may not:
(i) obtain information from the NMLSR, unless the person
is authorized to do so by statute;
(ii) initiate any civil action based on information obtained
from the NMLSR if the information is not otherwise
available to the person under any other state law; or
(iii) initiate any civil action based on information obtained
from the NMLSR if the person could not have initiated the
action based on information otherwise available to the
person under any other state law.
(c) Documents, materials, and other forms of information in
the control or possession of the NMLSR that are confidential
under IC 28-1-2-30 and that are:
(i) furnished by the director, the director's designee, or a
licensee; or
(ii) otherwise obtained by the NMLSR;
are confidential and privileged by law and are not subject to
inspection under IC 5-14-3, subject to subpoena, subject to
discovery, or admissible in evidence in any civil action.
However, the director may use the documents, materials, or
other information available to the director in furtherance of
any action brought in connection with the director's duties
under this article.
(d) Disclosure of documents, materials, and information:
(i) to the director; or
(ii) by the director;
under this subsection does not result in a waiver of any
applicable privilege or claim of confidentiality with respect to
the documents, materials, or information.
(e) Information provided to the NMLSR is subject to
IC 4-1-11.
(f) This subsection does not limit or impair a person's right to:
(i) obtain information;
(ii) use information as evidence in a civil action or
proceeding; or
(iii) use information to initiate a civil action or proceeding;
if the information may be obtained from the director or the
director's designee under any law.
(g) Except as otherwise provided in Public Law 110-289,
Section 1512, the requirements under any federal law or
IC 5-14-3 regarding the privacy or confidentiality of any
information or material provided to the NMLSR, and any
privilege arising under federal or state law, including the
rules of any federal or state court, with respect to the
information or material, continue to apply to the information
or material after the information or material has been
disclosed to the NMLSR. The information and material may
be shared with all state and federal regulatory officials with
mortgage industry oversight authority without the loss of
privilege or the loss of confidentiality protections provided by
federal law or IC 5-14-3.
(h) For purposes of this section, the director may enter
agreements or sharing arrangements with other governmental
agencies, the Conference of State Bank Supervisors, the
American Association of Residential Mortgage Regulators, or
other associations representing governmental agencies as
established by rule or order of the director.
(i) Information or material that is subject to a privilege or
confidentiality under subdivision (g) is not subject to:
(i) disclosure under any federal or state law governing the
disclosure to the public of information held by an officer or
an agency of the federal government or the respective
state; or
(ii) subpoena, discovery, or admission into evidence in any
private civil action or administrative process, unless with
respect to any privilege held by the NMLSR with respect
to the information or material, the person to whom the
information or material pertains waives, in whole or in
part, in the discretion of the person, that privilege.
(j) IC 5-14-3 relating to the disclosure of confidential
supervisory information or any information or material
described in subdivision (g) that is inconsistent with
subdivision (g) is superseded by this section.
(k) This section does not apply with respect to the information
or material relating to the employment history of, and
publicly adjudicated disciplinary and enforcement actions
against, a person described in section 402(2) of this chapter
that are included in the NMLSR for access by the public.
(l) The director may require a licensee required to submit
information to the NMLSR to pay a processing fee considered
reasonable by the director.
before instituting proceedings to suspend or revoke the license, the
department gives notice to the licensee of the conduct or facts that
warrant the intended action, and the licensee is given an opportunity to
show compliance with all lawful requirements for retention of the
license.
(3) If the department finds that probable cause for revocation of a
license exists and that enforcement of this article requires immediate
suspension of the license pending investigation, the department may,
after a hearing with the licensee upon five (5) days written notice to the
licensee, enter an order suspending the license for not more than thirty
(30) days.
(4) Whenever the department revokes or suspends a license, the
department shall enter an order to that effect and notify the licensee of
the revocation or suspension. Not later than five (5) days after the entry
of the order the department shall deliver to the licensee a copy of the
order and the findings supporting the order.
(5) Any person holding a license to engage in first lien mortgage
transactions as a creditor may relinquish the license by notifying the
department in writing of the relinquishment. However, a
relinquishment under this paragraph does not affect the person's
liability for acts previously committed and coming within the scope of
this article.
(6) If the director determines it to be in the public interest, the
director may pursue revocation of a license of a licensee that has
relinquished the license under subsection (5).
(6) (7) A revocation, suspension, or relinquishment of a license does
not impair or affect the obligation of any preexisting lawful contract
between:
(a) the person whose license has been revoked, suspended, or
relinquished; and
(b) any debtor.
(7) (8) The department may reinstate a license or terminate a
suspension or grant of a new license to a person whose license has been
revoked or suspended if the director determines that, at the time the
determination is made, there is no fact or condition that exists that
clearly would justify the department in refusing to grant reinstate a
license.
(8) (9) If the director:
(a) has just cause to believe an emergency exists from which it is
necessary to protect the interests of the public; or
(b) determines that a license was obtained for the benefit of, or on
behalf of, a person who does not qualify for a license;
department if the licensee:
(a) has a change in name, address, or any of its principals;
(b) opens a new branch, closes an existing branch, or relocates an
existing branch;
(c) files for bankruptcy or reorganization; or
(d) is subject to revocation or suspension proceedings by a state
or governmental authority with regard to the licensee's licensed
creditor's activities;
not later than thirty (30) days after the date of the event described in
this subsection.
(4) (7) A licensee shall file notification with the department if the
licensee or a key officer or director of the licensee
(a) is under indictment for a felony involving fraud, deceit, or
misrepresentation under the laws of Indiana or any other
jurisdiction; or
(b) has been convicted of or pleaded guilty or nolo contendere to
a felony involving fraud, deceit, or misrepresentation under the
laws of Indiana or any other jurisdiction
not later than thirty (30) days after the date of the event described in
this subsection.
under this section;
(c) use, hire, contract, or employ public or privately available
analytical systems, methods, or software to examine or
investigate a licensee, an individual, or a person subject to this
article;
(d) accept and rely on examination or investigation reports
made by other government officials within or outside Indiana;
and
(e) accept audit reports made by an independent certified
public accountant for the licensee, individual, or person
subject to this article in the course of that part of the
examination covering the same general subject matter as the
audit and may incorporate the audit report in the report of
the examination, report of investigation, or other writing of
the director.
article apply to the persons previously licensed or authorized. The
department may deliver evidence of licensing to the persons previously
licensed or authorized.
IC 24-4.5-3-505(4), and IC 24-4.5-3-505(5), a subordinate lien
mortgage transaction made by an entity using funds provided
by the United States Department of Housing and Urban
Development under Title 1 of the Housing and Community
Development Act of 1974, Public Law 93-383, as amended (42
U.S.C. 5301 et seq).
Administration, and the Federal Deposit Insurance Corporation.
(18) "First lien mortgage transaction" means a loan or
consumer credit sale in which a first lien mortgage, or a land
contract which constitutes a first lien, is created or retained against
land upon which there is or will be a dwelling that is or will be used
by the debtor primarily for personal, family, or household
purposes.
(19) "Immediate family member" means a spouse, child, sibling,
parent, grandparent, or grandchild. The term includes stepparents,
stepchildren, stepsiblings, and adoptive relationships.
(20) "Individual" means a natural person.
(21) "Lender credit card or similar arrangement" means an
arrangement or loan agreement, other than a seller credit card,
pursuant to which a lender gives a debtor the privilege of using a
credit card, letter of credit, or other credit confirmation or
identification in transactions out of which debt arises:
(a) by the lender's honoring a draft or similar order for the
payment of money drawn or accepted by the debtor;
(b) by the lender's payment or agreement to pay the debtor's
obligations; or
(c) by the lender's purchase from the obligee of the debtor's
obligations.
(22) "Licensee" means a person licensed as a creditor under this
article.
(23) "Loan processor or underwriter'' means an individual who
performs clerical or support duties as an employee at the direction
of, and subject to the supervision and instruction of, a person
licensed or exempt from licensing under this article. For purposes
of this subsection, the term ''clerical or support duties'' may
include, after the receipt of an application, the following:
(a) The receipt, collection, distribution, and analysis of
information common for the processing or underwriting of a
mortgage transaction.
(b) The communication with a consumer to obtain the
information necessary for the processing or underwriting of
a loan, to the extent that the communication does not include:
(i) offering or negotiating loan rates or terms; or
(ii) counseling consumers about mortgage transaction rates
or terms.
An individual engaging solely in loan processor or underwriter
activities shall not represent to the public through advertising or
other means of communicating or providing information, including
the use of business cards, stationery, brochures, signs, rate lists, or
other promotional items, that the individual can or will perform
any of the activities of a mortgage loan originator.
(24) "Mortgage loan originator" means an individual who, for
compensation or gain, or in the expectation of compensation or
gain, engages in taking a mortgage transaction application or
offers to negotiate terms of a mortgage transaction. The term does
not include the following:
(a) An individual engaged solely as a loan processor or
underwriter as long as the individual works exclusively as an
employee of a person licensed or exempt from licensing under
this article.
(b) Unless the person or entity is compensated by:
(i) a creditor;
(ii) a loan broker;
(iii) other mortgage loan originator; or
(iv) any agent of the creditor, loan broker, or other
mortgage loan originator described in items (i) through
(iii);
a person or entity that performs only real estate brokerage
activities and is licensed or registered in accordance with
applicable state law.
(c) A person solely involved in extensions of credit relating to
timeshare plans (as defined in 11 U.S.C. 101(53D)).
(25) "Mortgage servicer" means the last person to whom a
mortgagor or the mortgagor's successor in interest has been
instructed by a mortgagee to send payments on a loan secured by
a mortgage.
(26) "Mortgage transaction" means a loan or consumer credit
sale in which a mortgage or land contract is created or retained
against land upon which there is or will be a dwelling that is or will
be used by the debtor primarily for personal, family, or household
purposes.
(27) "Nationwide Mortgage Licensing System and Registry'' or
"NMLSR" means a mortgage licensing system developed and
maintained by the Conference of State Bank Supervisors and the
American Association of Residential Mortgage Regulators for the
licensing and registration of creditors and mortgage loan
originators.
(28) ''Nontraditional mortgage product'' means any mortgage
product other than a thirty (30) year fixed rate mortgage.
(29) "Official fees" means:
(a) fees and charges prescribed by law which actually are or
will be paid to public officials for determining the existence of
or for perfecting, releasing, or satisfying a security interest
related to a consumer credit sale, consumer lease, or
consumer loan; or
(b) premiums payable for insurance in lieu of perfecting a
security interest otherwise required by the creditor in
connection with the sale, lease, or loan, if the premium does
not exceed the fees and charges described in paragraph (a)
that would otherwise be payable.
(30) "Organization" means a corporation, a government or
governmental subdivision, an agency, a trust, an estate, a
partnership, a limited liability company, a cooperative, an
association, a joint venture, an unincorporated organization, or
any other entity, however organized.
(31) "Payable in installments" means that payment is required
or permitted by written agreement to be made in more than four
(4) installments not including a down payment.
(32) "Person" includes an individual or an organization.
(33) "Person related to" with respect to an individual means:
(a) the spouse of the individual;
(b) a brother, brother-in-law, sister, or sister-in-law of the
individual;
(c) an ancestor or lineal descendants of the individual or the
individual's spouse; and
(d) any other relative, by blood or marriage, of the individual
or the individual's spouse who shares the same home with the
individual.
(34) "Person related to" with respect to an organization means:
(a) a person directly or indirectly controlling, controlled by,
or under common control with the organization;
(b) an officer or director of the organization or a person
performing similar functions with respect to the organization
or to a person related to the organization;
(c) the spouse of a person related to the organization; and
(d) a relative by blood or marriage of a person related to the
organization who shares the same home with the person.
(35) "Presumed" or "presumption" means that the trier of fact
must find the existence of the fact presumed, unless and until
evidence is introduced that would support a finding of its
nonexistence.
(36) "Real estate brokerage activity" means any activity that
involves offering or providing real estate brokerage services to the
public, including the following:
(a) Acting as a real estate agent or real estate broker for a
buyer, seller, lessor, or lessee of real property.
(b) Bringing together parties interested in the sale, purchase,
lease, rental, or exchange of real property.
(c) Negotiating, on behalf of any party, any part of a contract
relating to the sale, purchase, lease, rental, or exchange of real
property (other than in connection with providing financing
with respect to the sale, purchase, lease, rental, or exchange
of real property).
(d) Engaging in any activity for which a person is required to
be registered or licensed as a real estate agent or real estate
broker under any applicable law.
(e) Offering to engage in any activity, or act in any capacity,
described in this subsection.
(37) ''Registered mortgage loan originator'' means any
individual who:
(a) meets the definition of mortgage loan originator and is an
employee of:
(i) a depository institution;
(ii) a subsidiary that is owned and controlled by a
depository institution and regulated by a federal banking
agency; or
(iii) an institution regulated by the Farm Credit
Administration; and
(b) is registered with, and maintains a unique identifier
through, the NMLSR.
(38) "Regularly engaged" means a person who extends
consumer credit:
(a) more than twenty-five (25) times; or
(b) at least one (1) time for a mortgage transaction secured by
a dwelling;
in the preceding calendar year. If a person did not meet these
numerical standards in the preceding calendar year, the numerical
standards shall be applied to the current calendar year.
(39) "Seller credit card" means an arrangement that gives to a
buyer or lessee the privilege of using a credit card, letter of credit,
or other credit confirmation or identification for the purpose of
purchasing or leasing goods or services from that person, a person
related to that person, or from that person and any other person.
The term includes a card that is issued by a person, that is in the
name of the seller, and that can be used by the buyer or lessee only
for purchases or leases at locations of the named seller.
(40) "Subordinate lien mortgage transaction" means a loan or
consumer credit sale in which a subordinate lien mortgage, or a
land contract that constitutes a subordinate lien, is created or
retained against land upon which there is or will be a dwelling that
is or will be used by the debtor primarily for personal, family, or
household purposes.
(41) "Unique identifier" means a number or other identifier
assigned by protocols established by the NMLSR.
otherwise a consumer credit sale (IC 24-4.5-2-104).
(IC 24-4.5-1-301.5(8)).
(2) The seller shall disclose to the buyer to whom credit is extended
with respect to a consumer credit sale, and the lessor shall disclose to
the lessee with respect to a consumer lease, the information required by
the Federal Consumer Credit Protection Act.
(3) For purposes of subsection (2), disclosures shall not be required
on a consumer credit sale if the transaction is exempt from the Federal
Consumer Credit Protection Act.
entity described under subdivision (b) in the NMLSR in order to
originate loans.
(3) Applicants for a license must apply for a license under this
chapter in a form prescribed by the director. Each form:
(a) must contain content as set forth by rule, instruction, or
procedure of the director; and
(b) may be changed or updated as necessary by the director
to carry out the purposes of this article.
(4) To fulfill the purposes of this article, the director may
establish relationships or contracts with the NMLSR or other
entities designated by the NMLSR to:
(a) collect and maintain records; and
(b) process transaction fees or other fees;
related to licensees or other persons subject to this article.
(5) For the purpose of participating in the NMLSR, the director
may:
(a) waive or modify, in whole or in part, by rule, regulation,
or order, any or all of the requirements of this article; and
(b) establish new requirements as reasonably necessary to
participate in the NMLSR.
requests a national criminal history background check under
section 503(4)(a) of this chapter for an individual described in
section 503(2) of this chapter, the director shall require the
individual to submit fingerprints to the department, state police
department, or NMLSR, as directed, at the time evidence of
compliance is requested under section 503(3) of this chapter. The
individual to whom the request is made shall pay any fees or costs
associated with processing and evaluating the fingerprints and the
national criminal history background check. The national criminal
history background check may be used by the director to
determine the individual's compliance with this section. The
director or the department may not release the results of the
national criminal history background check to any private entity.
(2) For purposes of this section and in order to reduce the points
of contact that the Federal Bureau of Investigation may have to
maintain for purposes of this section, the director may use the
NMLSR as a channeling agent for requesting information from
and distributing information to the United States Department of
Justice or any governmental agency.
related to subordinate lien mortgage transactions to the NMLSR.
(3) Subject to the confidentiality provisions contained in
IC 5-14-3, this section, and IC 28-1-2-30, the director may report
complaints received regarding licensees under this article related
to subordinate lien mortgage transactions to the NMLSR.
(4) The director may report publicly adjudicated licensure
actions against licensees under section 502.1 of this chapter to the
NMLSR.
(5) The director shall establish a process in which persons
licensed in accordance with section 502.1 of this chapter may
challenge information reported to the NMLSR by the department.
(6) The director's authority to designate the NMLSR under
subsection (1) is subject to the following:
(a) Except with respect to privately insured state chartered
credit unions that must comply with the system of mortgage
loan originator registration developed by the Federal
Financial Institutions Examinations Council under Section
1507 of the Safe and Fair Enforcement for Mortgage
Licensing Act of 2008 ("SAFE"), and entities exempt from
licensing under this article that employ a licensed mortgage
loan originator, the director or the director's designee may
not require any person exempt from licensure under this
article, or any employee or agent of an exempt person, to:
(i) submit information to; or
(ii) participate in;
the NMLSR.
(b) Information stored in the NMLSR is subject to the
confidentiality provisions of IC 28-1-2-30 and IC 5-14-3. A
person may not:
(i) obtain information from the NMLSR unless the person
is authorized to do so by statute;
(ii) initiate any civil action based on information obtained
from the NMLSR if the information is not otherwise
available to the person under any other state law; or
(iii) initiate any civil action based on information obtained
from the NMLSR if the person could not have initiated the
action based on information otherwise available to the
person under any other state law.
(c) Documents, materials, and other forms of information in
the control or possession of the NMLSR that are confidential
under IC 28-1-2-30 and that are:
(i) furnished by the director, the director's designee, or a
licensee; or
(ii) otherwise obtained by the NMLSR;
are confidential and privileged by law and are not subject to
inspection under IC 5-14-3, subject to subpoena, subject to
discovery, or admissible in evidence in any civil action.
However, the director may use the documents, materials, or
other information available to the director in furtherance of
any action brought in connection with the director's duties
under this article.
(d) Disclosure of documents, materials, and information:
(i) to the director; or
(ii) by the director;
under this subsection does not result in a waiver of any
applicable privilege or claim of confidentiality with respect to
the documents, materials, or information.
(e) Information provided to the NMLSR is subject to
IC 4-1-11.
(f) This subsection does not limit or impair a person's right to:
(i) obtain information;
(ii) use information as evidence in a civil action or
proceeding; or
(iii) use information to initiate a civil action or proceeding;
if the information may be obtained from the director or the
director's designee under any law.
(g) Except as otherwise provided in the federal Housing and
Economic Recovery Act of 2008, Public Law 110-289, Section
1512, the requirements under any federal law or IC 5-14-3
regarding the privacy or confidentiality of any information or
material provided to the NMLSR, and any privilege arising
under federal or state law, including the rules of any federal
or state court, with respect to the information or material,
continue to apply to the information or material after the
information or material has been disclosed to the NMLSR.
The information and material may be shared with all state
and federal regulatory officials with mortgage industry
oversight authority without the loss of privilege or the loss of
confidentiality protections provided by federal law or
IC 5-14-3.
(h) For purposes of this section, the director may enter
agreements or sharing arrangements with other governmental
agencies, the Conference of State Bank Supervisors, the
American Association of Residential Mortgage Regulators, or
other associations representing governmental agencies as
established by rule or order of the director.
(i) Information or material that is subject to a privilege or
confidentiality under subdivision (g) is not subject to:
(i) disclosure under any federal or state law governing the
disclosure to the public of information held by an officer or
an agency of the federal government or the respective
state; or
(ii) subpoena, discovery, or admission into evidence, in any
private civil action or administrative process, unless with
respect to any privilege held by the NMLSR with respect
to the information or material, the person to whom the
information or material pertains waives, in whole or in
part, in the discretion of the person, that privilege.
(j) IC 5-14-3 relating to the disclosure of confidential
supervisory information or any information or material
described in subdivision (g) that is inconsistent with
subdivision (g) is superseded by this section.
(k) This section does not apply with respect to the information
or material relating to the employment history of, and
publicly adjudicated disciplinary and enforcement actions
against persons licensed in accordance with section 502.1 of
this chapter and described in section 503(2) of this chapter
that are included in the NMLSR for access by the public.
(l) The director may require a licensee required to submit
information to the NMLSR to pay a processing fee considered
reasonable by the director.
the department in refusing to grant a license had these facts or
conditions been known to exist at the time the application for the
license was made.
(2) Except as provided in section 503.5 section 503.6(2) and
503.6(3) of this chapter, no revocation or suspension of a license is
lawful unless prior to institution of proceedings by the department
notice is given to the licensee of the facts or conduct which warrant the
intended action, and the licensee is given an opportunity to show
compliance with all lawful requirements for retention of the license.
(3) If the department finds that probable cause for revocation of a
license exists and that enforcement of this article requires immediate
suspension of the license pending investigation, the department may,
after a hearing upon five (5) days written notice to the licensee, enter
an order suspending the license for not more than thirty (30) days.
(4) Whenever the department revokes or suspends a license, the
department shall enter an order to that effect and forthwith notify the
licensee of the revocation or suspension. Within five (5) days after the
entry of the order the department shall deliver to the licensee a copy of
the order and the findings supporting the order.
(5) Any person holding a license to make consumer loans may
relinquish the license by notifying the department in writing of its
relinquishment, but this relinquishment shall not affect the person's
liability for acts previously committed.
(6) If the director determines it is in the public interest, the
director may pursue revocation of a license of a licensee that has
relinquished the license under subsection (5).
(6) (7) No revocation, suspension, or relinquishment of a license
shall impair or affect the obligation of any preexisting lawful contract
between the licensee and any debtor.
(7) (8) The department may reinstate a license or terminate a
suspension or grant a new of a license to a person whose license has
been revoked or suspended if the director determines that, at the
time the determination is made, no fact or condition then exists
which clearly would have justified the department in refusing to grant
reinstate a license.
(8) (9) If the director:
(a) has just cause to believe an emergency exists from which it is
necessary to protect the interests of the public; or
(b) determines that the license was obtained for the benefit of, or
on behalf of, a person who does not qualify for a license;
the director may proceed with the revocation of the license under
IC 4-21.5-3-6.
terms are actually available at the time of soliciting,
advertising, or contracting;
(f) conduct any business covered by this article without
holding a valid license as required under this article, or assist
or aid and abet any person in the conduct of business under
this article without a valid license as required under this
article;
(g) fail to make disclosures as required by this article and any
other applicable state or federal law, including regulations
under that law;
(h) fail to comply with this article or rules adopted under this
article, or fail to comply with any other state or federal law,
rule, or regulation, applicable to any business authorized or
conducted under this article;
(i) make, in any manner, any false or deceptive statement or
representation, including, with regard to the rates, points, or
other financing terms or conditions for a mortgage
transaction, or engage in bait and switch advertising;
(j) negligently make any false statement or knowingly and
willfully make any omission of material fact in connection
with any information or reports filed with a governmental
agency or the NMLSR or in connection with any investigation
conducted by the director or another governmental agency;
(k) make any payment, threat, or promise, directly or
indirectly, to any person for the purposes of influencing the
independent judgment of the person in connection with a
mortgage transaction, or make any payment, threat, or
promise, directly or indirectly, to any appraiser of a property,
for the purposes of influencing the independent judgment of
the appraiser with respect to the value of the property;
(l) collect, charge, attempt to collect or charge, or use or
propose any agreement purporting to collect or charge any
fee prohibited by this article;
(m) cause or require a borrower to obtain property insurance
coverage in an amount that exceeds the replacement cost of
the improvements as established by the property insurer;
(n) fail to account truthfully for money belonging to a party
to a mortgage transaction; or
(o) knowingly withhold, abstract, remove, mutilate, destroy,
or secrete any books, records, computer records, or other
information subject to examination under this article.
FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 108. Administrative
Enforcement orders. _ (1) After notice and hearing an opportunity
to be heard, the department may order a creditor, or a person acting in
his behalf a person acting on behalf of the creditor, to cease and
desist from engaging in violations of this article. A respondent
aggrieved by an order of the department may obtain judicial review of
the order and the department may obtain an order of the court for
enforcement of its order in any civil court. The proceeding for review
or enforcement is initiated by filing a petition in the court. Copies of
the petition shall be served upon all parties of record.
(2) Within thirty (30) days after service of the petition for review
upon the department, or within any further time the court may allow,
the department shall transmit to the court the original or a certified
copy of the entire record upon which the order is based, including any
transcript of testimony, which need not be printed. By stipulation of all
parties to the review proceeding, the record may be shortened. After
hearing the court may (a) reverse or modify the order if the findings of
fact of the department are clearly erroneous in view of the reliable,
probative, and substantial evidence on the whole record, (b) grant any
temporary relief or restraining order it deems just, and (c) enter an
order enforcing, modifying, and enforcing as modified, or setting aside
in whole or in part the order of the department, or remanding the case
to the department for further proceedings.
(3) An objection not urged at the hearing shall not be considered by
the court unless the failure to urge the objection is excused for good
cause shown. A party may move the court to remand the case to the
department in the interest of justice for the purpose of adducing
additional specified and material evidence and seeking finding thereon
upon good cause shown for the failure to adduce this evidence before
the department.
(4) The jurisdiction of the court shall be exclusive and its final
judgment or decree shall be subject to review by the court on appeal in
the same manner and form and with the same effect as in appeals from
a final judgment or decree. The department's copy of the testimony
shall be available at reasonable times to all parties for examination
without cost.
(5) A proceeding for review under this section must be initiated
within thirty (30) days after a copy of the order of the department is
received. If no proceeding is so initiated, the department may obtain a
decree of the civil court for enforcement of its order upon a showing
that an order was issued in compliance with this section, that no
proceeding for review was initiated within thirty (30) days after copy
of the order was received, and that the respondent is subject to the
jurisdiction of the court.
(6) With respect to unconscionable agreements or fraudulent or
unconscionable conduct by the respondent, the department may not
issue an order pursuant to this section but may bring a civil action for
an injunction (IC 24-4.5-6-111).
existing branch;
(c) files for bankruptcy or reorganization;
(d) is notified that the person is subject to revocation or
suspension proceedings by a state or governmental authority with
regard to the person's activities;
(e) is under indictment for a felony involving fraud, deceit, or
misrepresentation under the laws of Indiana or any other
jurisdiction; or
(f) (e) has been convicted of or pleaded guilty or nolo contendere
to a felony involving fraud, deceit, or misrepresentation under the
laws of Indiana or any other jurisdiction.
mechanic or other person began to perform the labor or furnish the
materials or machinery. Except as provided in subsections (c) and (d),
a lien created under this chapter has priority over a lien created after it.
(c) The lien of a mechanic or materialman does not have priority
over the lien of another mechanic or materialman.
(d) The mortgage of a lender has priority over all liens created under
this chapter that are recorded after the date the mortgage was recorded,
to the extent of the funds actually owed to the lender for the specific
project to which the lien rights relate. This subsection does not apply
to a lien that relates to a construction contract for the development,
construction, alteration, or repair of the following:
(1) A Class 2 structure (as defined in IC 22-12-1-5).
(2) An improvement on the same real estate auxiliary to a Class
2 structure (as defined in IC 22-12-1-5).
(3) Property that is:
(A) owned, operated, managed, or controlled by:
(i) a public utility (as defined in IC 8-1-2-1);
(ii) a municipally owned utility (as defined in IC 8-1-2-1);
(iii) a joint agency (as defined in IC 8-1-2.2-2);
(iv) a rural electric membership corporation formed under
IC 8-1-13-4;
(v) a rural telephone cooperative corporation formed under
IC 8-1-17; or
(vi) a not-for-profit utility (as defined in IC 8-1-2-125);
regulated under IC 8; and
(B) intended to be used and useful for the production,
transmission, delivery, or furnishing of heat, light, water,
telecommunications services, or power to the public.
if unlawful force or the threat of force is used to collect or to
attempt to collect any of the property loaned or any of the
consideration for the loan or extension of credit in question.
(b) This chapter applies regardless of whether the contract is made
directly or indirectly, and whether the receipt of the consideration is
received or is due to be received before or after the maturity date of the
loan.
and when so amended that said bill do pass .
Committee Vote: Yeas 10, Nays 0.