Bill Text: IN SB0238 | 2013 | Regular Session | Enrolled
Bill Title: Charges for consumer loans and credit sales.
Spectrum: Slight Partisan Bill (Democrat 2-1)
Status: (Passed) 2013-05-13 - Public Law 91 [SB0238 Detail]
Download: Indiana-2013-SB0238-Enrolled.html
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AN ACT to amend the Indiana Code concerning trade regulation.
(2) The credit service charge, calculated according to the actuarial method, may not exceed the equivalent of the greater of:
(a) the total of:
(i) thirty-six percent (36%) per year on that part of the unpaid balances of the amount financed which is
(ii) twenty-one percent (21%) per year on that part of the unpaid balances of the amount financed which is more than
(iii) fifteen percent (15%) per year on that part of the unpaid balances of the amount financed which is more than
(b)
unpaid balances of the amount financed.
(3) This section does not limit or restrict the manner of contracting
for the credit service charge, whether by way of add-on, discount, or
otherwise, so long as the rate of the credit service charge does not
exceed that permitted by this section. If the sale is precomputed:
(a) the credit service charge may be calculated on the assumption
that all scheduled payments will be made when due; and
(b) the effect of prepayment is governed by the provisions on
rebate upon prepayment (IC 24-4.5-2-210). in section 210 of this
chapter.
(4) For the purposes of this section, the term of a sale agreement
commences with the date the credit is granted or, if goods are delivered
or services performed more than thirty (30) days after that date, with
the date of commencement of delivery or performance except as set
forth below:
(a) Delays attributable to the customer. Where the customer
requests delivery after the thirty (30) day period or where delivery
occurs after the thirty (30) day period for a reason attributable to
the customer (including but not limited to failure to close on a
residence or failure to obtain lease approval), the term of the sale
agreement shall commence with the date credit is granted.
(b) Partial Deliveries. Where any portion of the order has been
delivered within the thirty (30) day period, the term of the sale
agreement shall commence with the date credit is granted.
Differences in the lengths of months are disregarded and a day may be
counted as one-thirtieth (1/30) of a month. Subject to classifications
and differentiations the seller may reasonably establish, a part of a
month in excess of fifteen (15) days may be treated as a full month if
periods of fifteen (15) days or less are disregarded and that procedure
is not consistently used to obtain a greater yield than would otherwise
be permitted.
(5) Subject to classifications and differentiations the seller may
reasonably establish, the seller may make the same credit service
charge on all amounts financed within a specified range. A credit
service charge so made does not violate subsection (2) if:
(a) when applied to the median amount within each range, it does
not exceed the maximum permitted by subsection (2); and
(b) when applied to the lowest amount within each range, it does
not produce a rate of credit service charge exceeding the rate
calculated according to paragraph (a) by more than eight percent
(8%) of the rate calculated according to paragraph (a).
(6) Notwithstanding subsection (2), the seller may contract for and
receive a minimum credit service charge of not more than thirty dollars
($30). The minimum credit service charge allowed under this
subsection may be imposed only if:
(a) the debtor prepays in full a consumer credit sale, refinancing,
or consolidation, regardless of whether the sale, refinancing, or
consolidation is precomputed;
(b) the sale, refinancing, or consolidation prepaid by the debtor is
subject to a credit service charge that:
(i) is contracted for by the parties; and
(ii) does not exceed the rate prescribed in subsection (2); and
(c) the credit service charge earned at the time of prepayment is
less than the minimum credit service charge contracted for under
this subsection.
(7) The amounts of three hundred two thousand dollars ($300)
($2,000) and one four thousand dollars ($1,000) ($4,000) in subsection
(2) are subject to change pursuant to the provisions on adjustment of
dollar amounts (IC 24-4.5-1-106). However, notwithstanding
IC 24-4.5-1-106(1), the Reference Base Index to be used under this
subsection is the Index for October 2012.
(8) The amount of thirty dollars ($30) in subsection (6) is subject to
change under the provisions on adjustment of dollar amounts
(IC 24-4.5-1-106). However, notwithstanding IC 24-4.5-1-106(1), the
Reference Base Index to be used under this subsection is the Index for
October 1992.
(2) This section does not limit or restrict the manner of contracting for the loan finance charge, whether by way of add-on, discount, or otherwise, so long as the rate of the loan finance charge does not exceed that permitted by this section. If the loan is precomputed:
(a) the loan finance charge may be calculated on the assumption that all scheduled payments will be made when due; and
(b) the effect of prepayment is governed by the provisions on rebate upon prepayment
(3) For the purposes of this section, the term of a loan commences with the date the loan is made. Differences in the lengths of months are disregarded, and a day may be counted as one-thirtieth (1/30) of a month. Subject to classifications and differentiations the lender may reasonably establish, a part of a month in excess of fifteen (15) days may be treated as a full month if periods of fifteen (15) days or less are disregarded and if that procedure is not consistently used to obtain a greater yield than would otherwise be permitted. For purposes of computing average daily balances, the creditor may elect to treat all months as consisting of thirty (30) days.
(4) With respect to a consumer loan made pursuant to a revolving loan account:
(a) the loan finance charge shall be deemed not to exceed the maximum annual percentage rate if the loan finance charge contracted for and received does not exceed a charge in each monthly billing cycle which is
(i) the average daily balance of the debt;
(ii) the unpaid balance of the debt on the same day of the billing cycle; or
(iii) subject to subsection (5), the median amount within a specified range within which the average daily balance or the unpaid balance of the debt, on the same day of the billing cycle, is included; for the purposes of this subparagraph and subparagraph (ii), a variation of not more than four (4) days from month to month is "the same day of the billing cycle";
(b) if the billing cycle is not monthly, the loan finance charge shall be deemed not to exceed the maximum annual percentage rate if the loan finance charge contracted for and received does not exceed a percentage which bears the same relation to one-twelfth (1/12) the maximum annual percentage rate as the number of days in the billing cycle bears to thirty (30); and
(c) notwithstanding subsection (1), if there is an unpaid balance on the date as of which the loan finance charge is applied, the lender may contract for and receive a charge not exceeding fifty cents ($0.50) if the billing cycle is monthly or longer, or the pro rata part of fifty cents ($0.50) which bears the same relation to fifty cents ($0.50) as the number of days in the billing cycle bears to thirty (30) if the billing cycle is shorter than monthly, but no charge may be made pursuant to this paragraph if the lender has made an annual charge for the same period as permitted by the
provisions on additional charges (paragraph (c) of subsection (1)
of IC 24-4.5-3-202). in section 202(1)(c) of this chapter.
(5) Subject to classifications and differentiations the lender may
reasonably establish, and the lender may make the same loan finance
charge on all amounts financed within a specified range. A loan finance
charge does not violate subsection (1) if:
(a) when applied to the median amount within each range, it does
not exceed the maximum permitted by subsection (1); and
(b) when applied to the lowest amount within each range, it does
not produce a rate of loan finance charge exceeding the rate
calculated according to paragraph (a) by more than eight percent
(8%) of the rate calculated according to paragraph (a).
(6) With respect to a consumer loan not made pursuant to a
revolving loan account, the lender may contract for and receive a
minimum loan finance charge of not more than thirty dollars ($30). The
minimum loan finance charge allowed under this subsection may be
imposed only if the lender does not assess a loan origination fee
under subsection (8) and:
(a) the debtor prepays in full a consumer loan, refinancing, or
consolidation, regardless of whether the loan, refinancing, or
consolidation is precomputed;
(b) the loan, refinancing, or consolidation prepaid by the debtor
is subject to a loan finance charge that:
(i) is contracted for by the parties; and
(ii) does not exceed the rate prescribed in subsection (1); and
(c) the loan finance charge earned at the time of prepayment is
less than the minimum loan finance charge contracted for under
this subsection.
(7) The amount of thirty dollars ($30) in subsection (6) is subject to
change under the provisions on adjustment of dollar amounts
(IC 24-4.5-1-106). However, notwithstanding IC 24-4.5-1-106(1), the
Reference Base Index to be used under this subsection is the Index for
October 1992.
(8) Except as provided in subsection (6), in addition to the loan
finance charge provided for in this section and to any other charges
and fees permitted by this chapter, a lender may contract for the
following: (a) With respect to a consumer loan that is not made under
a revolving loan account, a loan origination fee of not more than two
percent (2%) of the loan amount. (b) With respect to a consumer loan
that is made under a revolving loan account, and receive a loan
origination fee of not more than two percent (2%) of the line of credit
that was contracted for. the following:
(a) In the case of a consumer loan that is secured by an
interest in land and that:
(i) is not made under a revolving loan account, two percent
(2%) of the loan amount; or
(ii) is made under a revolving loan account, two percent
(2%) of the line of credit.
(b) In the case of consumer loan that is not secured by an
interest in land, fifty dollars ($50).
(9) The charges loan origination fee provided for in subsection (8)
(a) are is not subject to refund or rebate. (b) are not permitted if a
lender makes a settlement charge under IC 24-4.5-3-202(d)(ii); and (c)
are limited to two percent (2%) of the part of the loan that does not
exceed two thousand dollars ($2,000), if the loan is not primarily
secured by an interest in land.
(10) Notwithstanding subdivision (a), subsections (8) and (9), in
the case of a consumer loan that is not secured by an interest in
land, if a lender retains any part of a loan origination fee charged on a
loan that is paid in full by a new loan from the same lender, the
following apply:
(a) If the loan is paid in full by the new loan within three (3)
months after the date of the prior loan, the lender may not charge
a loan origination fee only on that part of the new loan, not used
to pay the amount due on the prior loan, or, in the case of a
revolving loan, the lender may charge a loan origination fee only
on the difference between the amount of the existing credit line
and the increased credit line. This subsection does not prohibit a
lender from contracting for and receiving a fee for preparing
deeds, mortgages, reconveyance, and similar documents under
IC 24-4.5-3-202(d)(ii), in addition to the charges provided for in
subsection (8).
(b) The lender may not assess more than two (2) loan
origination fees in any twelve (12) month period.
(11) In the case of a consumer loan that is secured by an interest
in land, this section does not prohibit a lender from contracting for
and receiving a fee for preparing deeds, mortgages, reconveyances,
and similar documents under section 202(1)(d)(ii) of this chapter,
in addition to the loan origination fee provided for in subsection
(8).
(1) "Supervised loan" means a consumer loan in which the rate of the loan finance charge exceeds
(25%) per year as determined according to the provisions on loan
finance charge for consumer loans (IC 24-4.5-3-201). in section 201
of this chapter.
(2) "Supervised lender" means a person authorized to make or take
assignments of supervised loans.
(2) The loan finance charge, calculated according to the actuarial method, may not exceed the equivalent of the greater of:
(a) the total of:
(i) thirty-six percent (36%) per year on that part of the unpaid balances of the principal which is
(ii) twenty-one percent (21%) per year on that part of the unpaid balances of the principal which is more than
(iii) fifteen percent (15%) per year on that part of the unpaid balances of the principal which is more than
(b)
(3) This section does not limit or restrict the manner of contracting for the loan finance charge, whether by way of add-on, discount, or otherwise, so long as the rate of the loan finance charge does not exceed that permitted by this section. If the loan is precomputed:
(a) the loan finance charge may be calculated on the assumption that all scheduled payments will be made when due; and
(b) the effect of prepayment is governed by the provisions on rebate upon prepayment
(4) The term of a loan for the purposes of this section commences on the date the loan is made. Differences in the lengths of months are disregarded, and a day may be counted as one-thirtieth (1/30) of a month. Subject to classifications and differentiations the lender may reasonably establish, a part of a month in excess of fifteen (15) days
may be treated as a full month if periods of fifteen (15) days or less are
disregarded and that procedure is not consistently used to obtain a
greater yield than would otherwise be permitted.
(5) Subject to classifications and differentiations the lender may
reasonably establish, and the lender may make the same loan finance
charge on all principal amounts within a specified range. A loan
finance charge does not violate subsection (2) if:
(a) when applied to the median amount within each range, it does
not exceed the maximum permitted in subsection (2); and
(b) when applied to the lowest amount within each range, it does
not produce a rate of loan finance charge exceeding the rate
calculated according to paragraph (a) by more than eight percent
(8%) of the rate calculated according to paragraph (a).
(6) The amounts of three hundred two thousand dollars ($300)
($2,000) and one four thousand dollars ($1,000) ($4,000) in subsection
(2) and thirty dollars ($30) in subsection (7) are subject to change
pursuant to the provisions on adjustment of dollar amounts
(IC 24-4.5-1-106). However, notwithstanding IC 24-4.5-1-106(1), for
the adjustment of the amount of thirty dollars ($30), the Reference
Base Index to be used is the Index for October 1992. Notwithstanding
IC 24-4.5-1-106(1), for the adjustment of the amounts of two
thousand dollars ($2,000) and four thousand dollars ($4,000), the
Reference Base Index to be used is the Index for October 2012.
(7) With respect to a supervised loan not made pursuant to a
revolving loan account, the lender may contract for and receive a
minimum loan finance charge of not more than thirty dollars ($30). The
minimum loan finance charge allowed under this subsection may be
imposed only if the lender does not assess a loan origination fee
under subsection (8) and:
(a) the debtor prepays in full a consumer loan, refinancing, or
consolidation, regardless of whether the loan, refinancing, or
consolidation is precomputed;
(b) the loan, refinancing, or consolidation prepaid by the debtor
is subject to a loan finance charge that:
(i) is contracted for by the parties; and
(ii) does not exceed the rate prescribed in subsection (2); and
(c) the loan finance charge earned at the time of prepayment is
less than the minimum loan finance charge contracted for under
this subsection.
(8) Except as provided in subsection (7), in addition to the loan
finance charge provided for in this section and to any other charges
and fees permitted by this chapter, the lender may contract for and
receive a loan origination fee of not more than fifty dollars ($50).
(9) The loan origination fee provided for in subsection (8) is not
subject to refund or rebate.
(10) Notwithstanding subsections (8) and (9), in the case of a
supervised loan that is not secured by an interest in land, if a
lender retains any part of a loan origination fee charged on a loan
that is paid in full by a new loan from the same lender, the
following apply:
(a) If the loan is paid in full by the new loan within three (3)
months after the date of the prior loan, the lender may not
charge a loan origination fee on the new loan, or, in the case
of a revolving loan, on the increased credit line.
(b) The lender may not assess more than two (2) loan
origination fees in any twelve (12) month period.
(11) In the case of a supervised loan that is secured by an
interest in land, this section does not prohibit a lender from
contracting for and receiving a fee for preparing deeds, mortgages,
reconveyances, and similar documents under section 202(1)(d)(ii)
of this chapter, in addition to the loan origination fee provided for
in subsection (8).
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