IC
24-4.5-3-105), "consumer loan" is a loan made by a person
regularly engaged in the business of making loans in which:
(a) the debtor is a person other than an organization;
(b) the debt is primarily for a personal, family, or
household purpose;
(c) either the debt is payable in installments or a loan
finance charge is made; and
(d) either:
(i) the principal does not exceed fifty thousand
dollars
($50,000); or
(ii) the debt is secured by an interest in land or
by personal property used or expected to be used as the
principal dwelling of the debtor.
(Formerly: Acts 1971, P.L.366, SEC.4.) As amended by
P.L.247-1983, SEC.14; P.L.122-1994, SEC.17.
IC 24-4.5-3-105
"Consumer loan"; loan primarily secured by interest in land
not included
Sec. 105. Unless the loan is made subject to
IC 24-4.5-3 by agreement (
IC
24-4.5-3-210).
(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 one and three-fourths
percent (1 3/4%) of an amount no greater than:
(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).
(5) Subject to classifications and differentiations, the
lender may reasonably establish and 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:
(a) the borrower 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 borrower 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) In addition to the loan finance charge provided for in
this section, 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, a loan origination fee of not more
than two percent (2%) of the line of credit that was contracted
for.
(9) The charges provided for in subsection (8):
(a) are 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.
Notwithstanding subdivision (a), 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 within three (3) months after
the date of the prior loan, the lender may 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).
(Formerly: Acts 1971, P.L.366, SEC.4.) As amended by Acts
1982, P.L.150, SEC.3; P.L.14-1992, SEC.25; P.L.122-1994, SEC.18;
P.L.45-1995, SEC.8; P.L.163-1999, SEC.1; P.L.10-2006, SEC.5 and
P.L.57-2006, SEC.5.
IC 24-4.5-3-202
Additional charges
Sec. 202. (1) In addition to the loan finance charge
permitted by IC 24-4.5-3-201 through IC 24-4.5-3-210, a lender
may contract for and receive the following additional charges in
connection with a consumer loan:
(a) Official fees and taxes.
(b) Charges for insurance as described in subsection
(2).
(c) Annual or periodic participation fees assessed in
connection with a revolving loan account.
(d) With respect to a debt secured by an interest in
land, the following closing costs, if they are bona fide,
reasonable in amount, and not for the purpose of circumvention
or evasion of this article:
(i) Fees for title examination, abstract of title,
title insurance, property surveys, or similar purposes.
(ii) Fees for preparing deeds, mortgages, and
reconveyance, settlement, and similar documents.
(iii) Notary and credit report fees.
(iv) Amounts required to be paid into escrow or
trustee accounts if the amounts would not otherwise be included
in the loan finance charge.
(v) Appraisal fees.
(e) Notwithstanding provisions of the Federal Consumer
Credit
Protection Act concerning disclosure, charges for other
benefits, including insurance, conferred on the debtor, if the
benefits are of value and if the charges are reasonable in
relation to the benefits, are of a type which is not for credit
and are excluded as permissible additional charges from the loan
finance charge. With respect to any other additional charge not
specifically provided for in this section to be a permitted
charge under this subsection, the creditor must submit a written
explanation of the charge to the department indicating how the
charge would be assessed and the value or benefit to the debtor.
Supporting documents may be required by the department. The
department shall determine whether the charge would be of
benefit to the debtor and is reasonable in relation to the
benefits.
(f) A charge not to exceed twenty dollars ($20) for each
return by a bank or other depository institution of a dishonored
check, negotiable order of withdrawal, or share draft issued by
the debtor.
(g) With respect to a revolving loan account, a fee not
to exceed twenty dollars ($20) in each billing cycle during
which the balance due under the revolving loan account exceeds
by more than one hundred dollars ($100) the maximum credit limit
for the account established by the lender.
(h) With respect to a revolving loan account, a
transaction fee that may not exceed the lesser of the following:
(i) Two percent (2%) of the amount of the
transaction.
(ii) Ten dollars ($10).
The additional charges provided for in paragraphs (f), (g), and
(h) are not subject to refund or rebate.
(2) An additional charge may be made for insurance in
connection with the loan, other than insurance protecting the
lender against the debtor's default or other credit loss:
(a) with respect to insurance against loss of or damage
to property or against liability, if the lender furnishes a
clear and specific statement in writing to the debtor, setting
forth the cost of the insurance if obtained from or through the
lender and stating that the debtor may choose the person,
subject to the lender's reasonable approval, through whom the
insurance is to be obtained; and
(b) with respect to consumer credit insurance providing
life, accident, unemployment or other loss of income, or health
coverage, if the insurance coverage is not a factor in the
approval by the lender of the extension of credit and this fact
is clearly disclosed in writing to the debtor, and if, in order
to obtain the insurance in connection with the extension of
credit, the debtor gives specific affirmative written indication
of the desire to do so after written disclosure of the cost of
the insurance.
(Formerly: Acts 1971, P.L.366, SEC.4; Acts 1975, P.L.266,
SEC.1.) As amended by P.L.247-1983, SEC.16; P.L.139-1990, SEC.1;
P.L.181-1991, SEC.3; P.L.14-1992, SEC.26; P.L.122-1994,
SEC.19; P.L.45-1995, SEC.9; P.L.80-1998, SEC.6.
Repealed
(Repealed by P.L.122-1994, SEC.122.)
IC 24-4.5-3-207
Conversion to revolving loan account
Sec. 207. Conversion to Revolving Loan Account. . The
parties may agree to add to a revolving loan account the unpaid
balance of a consumer loan, not made pursuant to a revolving
loan account, or a refinancing, or consolidation thereof, or the
unpaid balance of a
consumer credit sale, refinancing or consolidation, for the
purpose of this section.
(1) the unpaid balance of a consumer loan, refinancing, or
consolidation is an amount equal to the principal determined
according to the provisions on refinancing (24-4.5-3-205); and
(2) the unpaid balance of a consumer credit sale,
refinancing, or consolidation is an amount equal to the amount
financed determined according to the provisions on refinancing
(24-4.5-2-205).
(Formerly: Acts 1971, P.L.366, SEC.4.)
IC
24-4.5-3-210), the debtor may prepay in full the unpaid balance
of a consumer loan, refinancing, or consolidation at any time
without penalty. With respect to a consumer loan that is
primarily secured by an interest in land, a lender may contract
for a penalty for prepayment of the loan in full, not to exceed
two percent (2%) of any amount prepaid within sixty (60) days of
the date of the prepayment in full, after deducting all refunds
and rebates as of the date of the prepayment. However, the
penalty may not be imposed:
(a) if the loan is refinanced or consolidated with the
same creditor;
(b) for prepayment by proceeds of any insurance or
acceleration
after default; or
(c) after three (3) years from the contract date.
(2) At the time of prepayment of a consumer loan not subject
to the provisions of rebate upon prepayment (IC 24-4.5-3-210),
the total finance charge, including the prepaid finance charge
but excluding the loan origination fee allowed under
IC 24-4.5-3-201, may not exceed the maximum charge allowed under
this chapter for the period the loan was in effect. For the
purposes of determining compliance with this subsection, the
total finance charge does not include the following:
(a) The loan origination fee allowed under
IC 24-4.5-3-201.
(b) The borrower paid mortgage broker fee, if any, paid
to a person who does not control, is not controlled by, or is
not under common control with, the creditor holding the loan at
the time a consumer loan is prepaid.
(3) The creditor or mortgage servicer shall provide an
accurate payoff of the consumer loan to the debtor within ten
(10) calendar days after the creditor or mortgage servicer
receives the debtor's written request for the accurate consumer
loan payoff amount. A creditor or mortgage servicer who fails to
provide the accurate consumer loan payoff amount is liable for:
(a) one hundred dollars ($100) if an accurate consumer
loan payoff amount is not provided by the creditor or mortgage
servicer within ten (10) calendar days after the creditor or
mortgage servicer receives the debtor's first written request;
and
(b) the greater of:
(i) one hundred dollars ($100); or
(ii) the loan finance charge that accrues on the
loan from the date the creditor or mortgage servicer receives
the first written request until the date on which the accurate
consumer loan payoff amount is provided;
if an accurate consumer loan payoff amount is not
provided by the creditor or mortgage servicer within ten (10)
calendar days after the creditor or mortgage servicer receives
the debtor's second written request, and the creditor or
mortgage servicer failed to comply with subdivision (a).
A liability under this subsection is an excess charge under
IC 24-4.5-5-202.
(Formerly: Acts 1971, P.L.366, SEC.4.) As amended by
P.L.14-1992, SEC.29; P.L.122-1994, SEC.21; P.L.23-2000, SEC.6;
P.L.159-2001, SEC.1.
IC 24-4.5-3-210
Rebate upon prepayment
Sec. 210. Rebate upon Prepayment. . (1) Except as
provided in subsection (2), upon prepayment in full of the
unpaid balance of a precomputed consumer loan, refinancing, or
consolidation, an amount not less than the unearned portion of
the loan finance charge calculated according to this section
shall be rebated to the debtor. If the rebate otherwise required
is less than one dollar ($1), no rebate
need be made.
(2) Upon prepayment in full of a consumer loan, refinancing,
or consolidation, other than one (1) under a revolving loan
account, if the loan finance charge earned is less than any
permitted minimum loan finance charge (
IC 24-4.5-3-206),
under the refinancing agreement or consolidation agreement.
(4) In this section:
(a) "periodic balance" means the amount scheduled to be
outstanding on the last day of a computational period before
deducting the payment, if any, scheduled to be made on that day;
(b) "computation period" means one (1) month if one-half
(1/2) or more of the intervals between scheduled payments under
the agreement is one (1) month or more, and otherwise means one
(1) week;
(c) the "interval" to the due date of the first
scheduled installment or the final scheduled payment date is
measured from the date of a loan, refinancing, or consolidation,
and includes either the first or last day of the interval; and
(d) if the interval to the due date of the first
scheduled installment does not exceed one (1) month by more than
fifteen (15) days when the computational period is one (1)
month, or eleven (11) days when the computational period is one
(1) week, the interval shall be considered as one (1)
computational period.
(5) This subsection applies only if the schedule of payments
is not regular.
(a) If the computational period is one (1) month and:
(i) if the number of days in the interval to the due
date of the first scheduled installment is less than one (1)
month by more than five (5) days, or more than one (1) month by
more than five (5) but not more than fifteen (15) days, the
unearned loan finance charge shall be increased by an adjustment
for each day by which the interval is less than one (1) month
and, at the option of the lender, may be reduced by an
adjustment for each day by which the interval is more than one
(1) month; the adjustment for each day shall be one-thirtieth
(1/30) of that part of the loan finance charge earned in the
computational period prior to the due
date of the first scheduled installment assuming that period
to be one (1) month; and
(ii) if the interval to the final scheduled payment
date is a number of computational periods plus an additional
number of days less than a full month, the additional number of
days shall be considered a computational period only if sixteen
(16) days or more. This subparagraph applies whether or not
subparagraph (i) applies.
(b) Notwithstanding paragraph (a), if the computational
period is one (1) month, the number of days in the interval to
the due date of the first installment exceeds one (1) month by
not more than fifteen (15) days, and the schedule of payments is
otherwise regular, the lender, at the lender's option, may
exclude the extra days and the charge for the extra days in
computing the unearned loan finance charge; but if the lender
does so and a rebate is required before the due date of the
first scheduled installment, the lender shall compute the earned
charge for each elapsed day as one-thirtieth (1/30) of the
amount the earned charge would have been if the first interval
had been one (1) month.
(c) If the computational period is one (1) week and:
(i) if the number of days in the interval to the due
date of the first scheduled installment is less than five (5)
days, or more than nine (9) days, but not more than eleven (11)
days, the unearned loan finance charge shall be increased by an
adjustment for each day by which the interval is less than seven
(7) days and, at the option of the lender, may be reduced by an
adjustment for each day by which the interval is more than seven
(7) days; the adjustment for each day shall be one-seventh (1/7)
of that part of the loan finance charge earned in the
computational period prior to the due date of the first
scheduled installment, assuming that period to be one (1) week;
and
(ii) if the interval to the final scheduled payment
date is a number of computational periods plus an additional
number of days less than a full week, the additional number of
days shall be considered a computational period only if five (5)
days or more. This subparagraph applies whether or not
subparagraph (i) applies.
(6) If a deferral (