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IC 23-2-5-1
"Commissioner" defined
Sec. 1. As used in this chapter, "commissioner" refers to the
securities commissioner appointed under IC 23-19-6-1(a).
As added by P.L.235-1985, SEC.1. Amended by P.L.27-2007,
SEC.17.
IC 23-2-5-2
"Loan" defined
Sec. 2. As used in this chapter, "loan" means any agreement to
advance money or property in return for the promise to make
payments for the money or property.
As added by P.L.235-1985, SEC.1.
IC 23-2-5-3 Version a
Definitions
Note: This version of section effective until 1-1-2010. See also
following version of this section, effective 1-1-2010.
Sec. 3. (a) As used in this chapter, "bona fide third party fee"
includes fees for the following:
(1) Credit reports, investigations, and appraisals performed by
a person who holds a license or certificate as a real estate
appraiser under IC 25-34.1-8.
(2) If the loan is to be secured by real property, title
examinations, an abstract of title, title insurance, a property
survey, and similar purposes.
(3) The services provided by a loan broker in procuring possible
business for a lending institution if the fees are paid by the
lending institution.
(b) As used in this chapter, "certificate of registration" means a
certificate issued by the commissioner authorizing an individual to:
(1) engage in origination activities on behalf of a licensee; or
(2) act as a principal manager on behalf of a licensee.
(c) As used in this chapter, "license" means a license issued by the
commissioner authorizing a person to engage in the loan brokerage
business.
(d) As used in this chapter, "licensee" means a person that is
issued a license under this chapter.
(e) As used in this chapter, "loan broker" means any person who,
in return for any consideration from any source procures, attempts to
procure, or assists in procuring, a loan from a third party or any other
person, whether or not the person seeking the loan actually obtains
the loan. "Loan broker" does not include:
(1) any supervised financial organization (as defined in
IC 24-4.5-1-301(20)), including a bank, savings bank, trust
company, savings association, or credit union;
(2) any other financial institution that is:
IC 23-2-5-3 Version b
Definitions
Note: This version of section effective 1-1-2010. See also
preceding version of this section, effective until 1-1-2010.
Sec. 3. (a) As used in this chapter, "loan broker license" means a
license issued by the commissioner authorizing a person to engage
in the loan brokerage business.
(b) As used in this chapter, "licensee" means a person that is
issued a license under this chapter.
(c) As used in this chapter, "loan broker" means any person who,
in return for any consideration from any source procures, attempts to
procure, or assists in procuring, a residential mortgage loan from a
third party or any other person, whether or not the person seeking the
loan actually obtains the loan. "Loan broker" does not include:
(1) any supervised financial organization (as defined in
IC 24-4.5-1-301(20)), including a bank, savings bank, trust
company, savings association, or credit union;
(2) any other financial institution that is:
(A) regulated by any agency of the United States or any
state; and
(B) regularly actively engaged in the business of making
consumer loans that are not secured by real estate or taking
assignment of consumer sales contracts that are not secured
by real estate;
(3) any insurance company;
(4) any person arranging financing for the sale of the person's
product; or
(5) a creditor that is licensed under IC 24-4.4-2-402.
(d) As used in this chapter, "loan brokerage business" means a
person acting as a loan broker.
(e) As used in this chapter, "mortgage loan origination activities"
means performing any of the following activities for compensation
or gain in connection with a residential mortgage loan:
(1) Receiving or recording a borrower's or potential borrower's
residential mortgage loan application information in any form
for use in a credit decision by a creditor.
(2) Offering to negotiate or negotiating terms of a residential
mortgage loan.
(f) As used in this chapter, "borrower's residential mortgage loan
application information" means the address of the proposed
residential real property to be mortgaged and borrower's essential
personal and financial information necessary for an informed credit
decision to be made on the borrower's mortgage loan application.
(g) As used in this chapter, "mortgage loan originator" means an
individual engaged in mortgage loan origination activities. The term
does not include a person who:
(1) performs purely administrative or clerical tasks on behalf of
a mortgage loan originator or acts as a loan processor or
underwriter;
(2) performs only real estate brokerage activities and is licensed
in accordance with IC 25-34.1 or the applicable laws of another
state, unless the person is compensated by a creditor, a loan
broker, a mortgage loan originator, or any agent of a creditor, a
loan broker, or a mortgage loan originator; or
(3) is involved only in extensions of credit relating to time share
plans (as defined in 11 U.S.C. 101(53D)).
(h) As used in this chapter, "mortgage loan originator license"
means a license issued by the commissioner authorizing an
individual to act as a mortgage loan originator on behalf of a loan
broker licensee.
(i) As used in this chapter, "person" means an individual, a
partnership, a trust, a corporation, a limited liability company, a
limited liability partnership, a sole proprietorship, a joint venture, a
joint stock company, or another group or entity, however organized.
(j) As used in this chapter, "ultimate equitable owner" means a
person who, directly or indirectly, owns or controls ten percent
(10%) or more of the equity interest in a loan broker licensed or
required to be licensed under this chapter, regardless of whether the
person owns or controls the equity interest through one (1) or more
other persons or one (1) or more proxies, powers of attorney, or
variances.
(k) As used in this chapter, "principal manager" means an
individual who:
(1) has at least three (3) years of experience:
(A) as a mortgage loan originator; or
(B) in financial services;
that is acceptable to the commissioner; and
(2) is principally responsible for the supervision and
management of the employees and business affairs of a loan
broker licensee.
(l) As used in this chapter, "principal manager license" means a
license issued by the commissioner authorizing an individual to act
as:
(1) a principal manager; and
(2) a mortgage loan originator;
on behalf of a loan broker licensee.
(m) As used in this chapter, "bona fide third party fee", with
respect to a residential mortgage loan, includes any of the following:
(1) Fees for real estate appraisals. However, if the residential
mortgage loan is governed by Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act (12 U.S.C.
3331 through 3352), the fee for an appraisal performed in
connection with the loan is not a bona fide third party fee unless
the appraisal is performed by a person that is licensed or
certified under IC 25-34.1-3-8.
(2) Fees for title examination, abstract of title, title insurance,
property surveys, or similar purposes.
(3) Notary and credit report fees.
(4) Fees for the services provided by a loan broker in procuring
possible business for a creditor if the fees are paid by the
creditor.
(n) As used in this chapter, "branch office" means any fixed
physical location from which a loan broker licensee holds itself out
as engaging in the loan brokerage business.
(o) As used in this chapter, "loan processor or underwriter" means
an individual who:
(1) is employed by a loan broker licensee and acts at the
direction of, and subject to the supervision of, the loan broker
licensee or a licensed principal manager employed by the loan
broker licensee; and
(2) performs solely clerical or support duties on behalf of the
loan broker licensee, including any of the following activities
with respect to a residential mortgage loan application received
by the loan broker licensee:
(A) The receipt, collection, distribution, and analysis of
information commonly used in the processing or
underwriting of a residential mortgage loan.
(B) Communicating with a borrower or potential borrower
to obtain the information necessary for the processing or
underwriting of a residential mortgage loan, to the extent
that the communication does not include:
(i) offering or negotiating loan rates or terms; or
(ii) counseling borrowers or potential borrowers about
residential mortgage loan rates or terms.
(p) As used in this chapter, "real estate brokerage activity" means
any activity that involves offering or providing real estate brokerage
services to the public, including any of the following:
(1) Acting as a real estate broker or salesperson for a buyer,
seller, lessor, or lessee of real property.
(2) Bringing together parties interested in the sale, lease, or
exchange of real property.
(3) Negotiating, on behalf of any party, any part of a contract
concerning the sale, lease, or exchange of real property, other
than in connection with obtaining or providing financing for the
transaction.
(4) Engaging in any activity for which the person performing
the activity is required to be licensed under IC 25-34.1 or the
applicable laws of another state.
(5) Offering to engage in any activity, or to act in any capacity
with respect to any activity, described in subdivisions (1)
through (4).
(q) As used in this chapter, "registered mortgage loan originator"
means a mortgage loan originator who:
(1) is an employee of:
(A) a depository institution;
(B) a subsidiary that is:
(i) owned and controlled by a depository institution; and
(ii) regulated by a federal financial institution regulatory
agency (as defined in 12 U.S.C. 3350(6)); or
(C) an institution regulated by the Farm Credit
Administration; and
(2) is registered with and maintains a unique identifier with the
Nationwide Mortgage Licensing System and Registry.
(r) As used in this chapter, "residential mortgage loan" means a
loan that is secured by a mortgage, deed of trust, or other consensual
security interest on real estate in Indiana on which there is located or
intended to be constructed a dwelling (as defined in the federal Truth
in Lending Act (15 U.S.C. 1602(v)) that is or will be used primarily
for personal, family, or household purposes.
(s) As used in this chapter, "personal information" includes any
of the following:
(1) An individual's first and last names or first initial and last
name.
1508 of the S.A.F.E. Mortgage Licensing Act of 2008 (Title V
of P.L.110-289); and
(4) is registered as a mortgage loan originator with, and
maintains a unique identifier through, the Nationwide Mortgage
Licensing System and Registry.
(x) As used in this chapter, "unique identifier" means a number or
other identifier that:
(1) permanently identifies a mortgage loan originator; and
(2) is assigned by protocols established by the Nationwide
Mortgage Licensing System and Registry and the federal
financial institution regulatory agencies to facilitate:
(A) the electronic tracking of mortgage loan originators; and
(B) the uniform identification of, and public access to, the
employment history of and the publicly adjudicated
disciplinary and enforcement actions against mortgage loan
originators.
As added by P.L.235-1985, SEC.1. Amended by P.L.247-1987,
SEC.1; P.L.1-1990, SEC.242; P.L.8-1993, SEC.314; P.L.79-1998,
SEC.22; P.L.230-1999, SEC.1; P.L.14-2000, SEC.52; P.L.115-2001,
SEC.1; P.L.73-2004, SEC.12; P.L.230-2007, SEC.6; P.L.145-2008,
SEC.10; P.L.1-2009, SEC.130; P.L.156-2009, SEC.1.
IC 23-2-5-4 Version a
License to engage in loan brokerage business required; certificate
of registration to act as originator or principal manager required;
application; evidence of compliance; criminal background check
Note: This version of section effective until 1-1-2010. See also
following version of this section, effective 1-1-2010.
Sec. 4. (a) A person may not engage in the loan brokerage
business in Indiana unless the person first obtains a license from the
commissioner. Any person desiring to engage or continue in the loan
brokerage business shall apply to the commissioner for a license
under this chapter.
(b) An individual may not perform origination activities in Indiana
on behalf of a person licensed or required to be licensed under this
chapter unless the individual first obtains a certificate of registration
from the commissioner. An individual desiring to engage in
origination activities on behalf of a person licensed or required to be
licensed under this chapter shall apply to the commissioner for
registration under this chapter.
(c) An individual may not act as a principal manager on behalf of
a person licensed or required to be licensed under this chapter unless
the individual first obtains a certificate of registration from the
commissioner. Any individual desiring to act as a principal manager
on behalf of a person licensed or required to be licensed under this
chapter shall apply to the commissioner for registration under this
chapter.
(d) The commissioner may request evidence of compliance with
this section at any of the following times:
(1) The time of application for an initial:
IC 23-2-5-4 Version b
License to engage in loan brokerage business required; license to
act as mortgage loan originator or principal manager required;
unique identifier required; evidence of compliance; criminal
background check
Note: This version of section effective 1-1-2010. See also
preceding version of this section, effective until 1-1-2010.
Sec. 4. (a) A person may not engage in the loan brokerage
business in Indiana unless the person first obtains a loan broker
license from the commissioner. Any person desiring to engage or
continue in the loan brokerage business shall apply to the
commissioner for a loan broker license under this chapter.
(b) An individual may not act as a mortgage loan originator in
Indiana on behalf of a person licensed or required to be licensed as
a loan broker under this chapter unless the individual first obtains a
unique identifier from the Nationwide Mortgage Licensing System
and Registry and a mortgage loan originator license from the
commissioner. An individual desiring to act as a mortgage loan
originator on behalf of a person licensed or required to be licensed
as a loan broker under this chapter shall apply to the commissioner
for a mortgage loan originator license under this chapter.
(c) An individual may not act as a principal manager on behalf of
a person licensed or required to be licensed as a loan broker under
this chapter unless the individual first obtains a unique identifier
from the Nationwide Mortgage Licensing System and Registry and
a principal manager license from the commissioner. Any individual
desiring to act as a principal manager on behalf of a person licensed
or required to be licensed as a loan broker under this chapter shall
apply to the commissioner for a principal manager license under this
chapter.
(d) The commissioner may request evidence of compliance with
this section at any of the following times:
(1) The time of application for an initial license.
(2) The time of renewal of a license.
(3) Any other time considered necessary by the commissioner.
(e) For purposes of subsection (d), evidence of compliance with
this section must include a criminal background check, including a
national criminal history background check (as defined in
IC 10-13-3-12) by the Federal Bureau of Investigation.
(f) A unique identifier obtained by an individual from the
Nationwide Mortgage Licensing System and Registry under
subsection (b) or (c) may not be used for purposes other than those
set forth in the S.A.F.E. Mortgage Licensing Act of 2008 (Title V of
P.L.110-289).
As added by P.L.235-1985, SEC.1. Amended by P.L.230-1999,
SEC.2; P.L.230-2007, SEC.7; P.L.145-2008, SEC.11; P.L.156-2009,
SEC.2.
IC 23-2-5-5 Version a
Applications for license or registration; contents; written
examination; bond; issuance; expiration; service of process;
criminal background checks
Note: This version of section effective until 1-1-2010. See also
following version of this section, effective 1-1-2010.
Sec. 5. (a) An application for license or renewal of a license must
contain:
(1) consent to service of process under subsection (h);
(2) evidence of the bond required in subsection (e);
(3) an application fee of four hundred dollars ($400), plus two
hundred dollars ($200) for each ultimate equitable owner;
(4) an affidavit affirming that none of the applicant's ultimate
equitable owners, directors, managers, or officers have been
convicted, in any jurisdiction, of an offense involving fraud or
deception that is punishable by at least one (1) year of
imprisonment, unless waived by the commissioner under
subsection (i);
(5) evidence that the applicant, if the applicant is an individual,
has completed the education requirements under section 21 of
this chapter;
(6) the name and registration number for each originator to be
employed by the licensee;
(7) the name and registration number for each principal
manager; and
(8) for each ultimate equitable owner, the following
information:
(A) The name of the ultimate equitable owner.
(B) The address of the ultimate equitable owner, including
the home address of the ultimate equitable owner if the
ultimate equitable owner is an individual.
(C) The telephone number of the ultimate equitable owner,
including the home telephone number if the ultimate
equitable owner is an individual.
(D) The ultimate equitable owner's Social Security number
and date of birth, if the ultimate equitable owner is an
individual.
(b) An application for registration as an originator shall be made
on a registration form prescribed by the commissioner. The
application must include the following information for the individual
that seeks to be registered as an originator:
(1) The name of the individual.
(2) The home address of the individual.
(3) The home telephone number of the individual.
(4) The individual's Social Security number and date of birth.
(5) The name of the:
(A) licensee; or
(B) applicant for licensure;
for whom the individual seeks to be employed as an originator.
(6) Consent to service of process under subsection (h).
(7) Evidence that the individual has completed the education
requirements described in section 21 of this chapter.
(8) An application fee of one hundred dollars ($100).
(9) All registration numbers previously issued to the individual
under this chapter, if applicable.
(c) An application for registration as a principal manager shall be
made on a registration form prescribed by the commissioner. The
application must include the following information for the individual
who seeks to be registered as a principal manager:
(1) The name of the individual.
(2) The home address of the individual.
(3) The home telephone number of the individual.
(4) The individual's Social Security number and date of birth.
(5) The name of the:
(A) licensee; or
(B) applicant for licensure;
for whom the individual seeks to be employed as a principal
manager.
(6) Consent to service of process under subsection (h).
(7) Evidence that the individual has completed the education
requirements described in section 21 of this chapter.
(8) Evidence that the individual has at least three (3) years of
experience in the:
(A) loan brokerage; or
(B) financial services;
business.
(9) An application fee of two hundred dollars ($200).
(10) All registration numbers previously issued to the
individual, if applicable.
(d) The commissioner shall require an applicant for registration
as:
(1) an originator under subsection (b); or
(2) a principal manager under subsection (c);
to pass a written examination prepared and administered by the
commissioner or an agent appointed by the commissioner.
(e) A licensee must maintain a bond satisfactory to the
commissioner in the amount of fifty thousand dollars ($50,000),
which shall be in favor of the state and shall secure payment of
damages to any person aggrieved by any violation of this chapter by
the licensee.
IC 23-2-5-5 Version b
Applications for licenses; contents; bond; expiration; service of
process; criminal background checks; consumer reports; financial
responsibility
Note: This version of section effective 1-1-2010. See also
preceding version of this section, effective until 1-1-2010.
Sec. 5. (a) An application for a loan broker license or renewal of
a loan broker license must contain:
(1) consent to service of process under subsection (g);
(2) evidence of the bond required in subsection (d);
(3) an application fee of two hundred dollars ($200), plus one
hundred dollars ($100) for each ultimate equitable owner;
(4) an affidavit affirming that none of the applicant's ultimate
equitable owners, directors, managers, or officers have been
convicted, in any jurisdiction, of:
(A) any felony within the previous seven (7) years; or
(B) an offense involving fraud or deception that is
punishable by at least one (1) year of imprisonment;
unless such an affidavit is waived by the commissioner under
subsection (h);
(5) evidence that the applicant, if the applicant is an individual,
has completed the education requirements under section 21 of
this chapter;
(6) the name and license number for each mortgage loan
originator to be employed by the licensee;
(7) the name and license number for each principal manager;
and
(8) for each ultimate equitable owner, the following
information:
(A) The name of the ultimate equitable owner.
(B) The address of the ultimate equitable owner, including
the home address of the ultimate equitable owner if the
ultimate equitable owner is an individual.
(C) The telephone number of the ultimate equitable owner,
including the home telephone number if the ultimate
equitable owner is an individual.
(D) The ultimate equitable owner's Social Security number
and date of birth, if the ultimate equitable owner is an
individual.
(b) An application for licensure as a mortgage loan originator
shall be made on a form prescribed by the commissioner. The
application must include the following information for the individual
that seeks to be licensed as a mortgage loan originator:
(1) The name of the individual.
(2) The home address of the individual.
(3) The home telephone number of the individual.
(4) The individual's Social Security number and date of birth.
(5) The name of the:
(A) loan broker licensee; or
(B) applicant for loan broker licensure;
for whom the individual seeks to be employed as a mortgage
loan originator.
($5,000,000).
(2) Sixty thousand dollars ($60,000) if the total amount of
residential mortgage loans originated by the loan broker in the
previous calendar year was greater than five million dollars
($5,000,000) but not greater than twenty million dollars
($20,000,000).
(3) Seventy-five thousand dollars ($75,000) if the total amount
of residential mortgage loans originated by the loan broker in
the previous calendar year was greater than twenty million
dollars ($20,000,000).
The bond shall be in favor of the state and shall secure payment of
damages to any person aggrieved by any violation of this chapter by
the licensee or any licensed mortgage loan originator or licensed
principal manager employed by the licensee.
(e) The commissioner shall issue a license and license number to
an applicant for a loan broker license, a mortgage loan originator
license, or a principal manager license if the applicant meets the
applicable licensure requirements set forth in this chapter.
(f) Licenses issued by the commissioner under this chapter expire
on December 31 of the year in which they are issued.
(g) Every applicant for licensure or for renewal of a license shall
file with the commissioner, in such form as the commissioner by rule
or order prescribes, an irrevocable consent appointing the secretary
of state to be the applicant's agent to receive service of any lawful
process in any noncriminal suit, action, or proceeding against the
applicant arising from the violation of any provision of this chapter.
Service shall be made in accordance with the Indiana Rules of Trial
Procedure.
(h) Upon good cause shown, the commissioner may waive the
requirements of subsection (a)(4) for one (1) or more of an
applicant's ultimate equitable owners, directors, managers, or
officers.
(i) Whenever an initial or a renewal application for a license is
denied or withdrawn, the commissioner shall retain the initial or
renewal application fee paid.
(j) At the time of application for an initial license under this
chapter, the commissioner shall require each:
(1) equitable owner, in the case of an applicant for a loan broker
license;
(2) individual described in subsection (a)(4), in the case of an
applicant for a loan broker license; and
(3) applicant for licensure as:
(A) a mortgage loan originator; or
(B) a principal manager;
to submit fingerprints for a national criminal history background
check (as defined in IC 10-13-3-12) by the Federal Bureau of
Investigation, for use by the commissioner in determining whether
the equitable owner, the individual described in subsection (a)(4), or
the applicant should be denied licensure under this chapter for any
reason set forth in section 10(c) or 10(d) of this chapter. The
equitable owner, individual described in subsection (a)(4), or
applicant shall pay any fees or costs associated with the fingerprints
and background check required under this subsection. The
commissioner may not release the results of a background check
described in this subsection to any private entity.
(k) Every three (3) years, beginning with the third calendar year
following the calendar year in which an initial license is issued under
this chapter, the commissioner shall require each:
(1) equitable owner, in the case of a loan broker licensee;
(2) individual described in subsection (a)(4), in the case of a
loan broker licensee; and
(3) licensed:
(A) mortgage loan originator; or
(B) principal manager;
to submit fingerprints for a national criminal history background
check (as defined in IC 10-13-3-12) by the Federal Bureau of
Investigation, for use by the commissioner in determining whether
the equitable owner, the individual described in subsection (a)(4), or
the licensee should be denied continued licensure under this chapter
for any reason set forth in section 10(c) of this chapter. The equitable
owner, individual described in subsection (a)(4), or licensee shall pay
any fees or costs associated with the fingerprints and background
check required under this subsection. The commissioner may not
release the results of a background check described in this subsection
to any private entity.
(l) The commissioner shall require each applicant for licensure as:
(1) a mortgage loan originator; or
(2) a principal manager;
to submit written authorization for the commissioner or an agent of
the commissioner to obtain a consumer report (as defined in
IC 24-5-24-2) concerning the applicant.
(m) In reviewing a consumer report obtained under subsection (l),
the commissioner may consider one (1) or more of the following in
determining whether an individual described in subsection (l) has
demonstrated financial responsibility:
(1) Bankruptcies filed by the individual within the most recent
ten (10) years.
(2) Current outstanding civil judgments against the individual,
except judgments resulting solely from medical expenses owed
by the individual.
(3) Current outstanding tax liens or other government liens or
filings.
(4) Foreclosure actions filed within the most recent three (3)
years against property owned by the individual.
(5) Any pattern of seriously delinquent accounts associated with
the individual during the most recent three (3) years.
As added by P.L.235-1985, SEC.1. Amended by P.L.247-1987,
SEC.2; P.L.113-1992, SEC.4; P.L.11-1996, SEC.18; P.L.230-1999,
SEC.3; P.L.115-2001, SEC.2; P.L.230-2007, SEC.8; P.L.3-2008,
SEC.167; P.L.145-2008, SEC.12; P.L.156-2009, SEC.3.
IC 23-2-5-6 Version a
Renewal of license or registration
Note: This version of section effective until 1-1-2010. See also
following version of this section, effective 1-1-2010.
Sec. 6. A licensee may not continue engaging in the loan
brokerage business unless the licensee's license is renewed
biennially. A registrant may not continue:
(1) engaging in origination activities; or
(2) acting as a principal manager;
unless the registrant's certificate of registration is renewed biennially.
A licensee shall renew its license by filing with the commissioner, at
least thirty (30) days before the expiration of the license, an
application containing any information the commissioner may
require to indicate any material change from the information
contained in the applicant's original application or any previous
application. A registrant may renew the registrant's certificate of
registration by filing with the commissioner, at least thirty (30) days
before the expiration of the registration, an application containing
any information the commissioner may require to indicate any
material change from the information contained in the applicant's
original application or any previous application.
As added by P.L.235-1985, SEC.1. Amended by P.L.11-1996,
SEC.19; P.L.230-1999, SEC.4; P.L.115-2001, SEC.3; P.L.145-2008,
SEC.13.
IC 23-2-5-6 Version b
Renewal of licenses
Note: This version of section effective 1-1-2010. See also
preceding version of this section, effective until 1-1-2010.
Sec. 6. A loan broker licensee may not continue engaging in the
loan brokerage business unless the licensee's license is renewed
annually. A mortgage loan originator licensee or a principal manager
licensee may not continue acting as:
(1) a mortgage loan originator; or
(2) a principal manager;
unless the licensee's license is renewed annually. A licensee under
this chapter shall renew its license by filing with the commissioner,
at least thirty (30) days before the expiration of the license, an
application containing any information the commissioner may
require to indicate any material change from the information
contained in the applicant's original application or any previous
application.
As added by P.L.235-1985, SEC.1. Amended by P.L.11-1996,
SEC.19; P.L.230-1999, SEC.4; P.L.115-2001, SEC.3; P.L.145-2008,
SEC.13; P.L.156-2009, SEC.5.
IC 23-2-5-7 Version a
Loan broker regulation account
Note: This version of section effective until 1-1-2010. See also
following version of this section, effective 1-1-2010.
Sec. 7. (a) The loan broker regulation account is created in the
state general fund. The money in the loan broker regulation account
may be used only for the regulation of loan brokers under this
chapter. The loan broker regulation account shall be administered by
the treasurer of state. The money in the loan broker regulation
account does not revert to any other account within the state general
fund at the end of a state fiscal year.
(b) Except as provided in subsection (c), all fees and funds
accruing from the administration of this chapter shall be accounted
for by the commissioner and shall be deposited with the treasurer of
state who shall deposit them in the loan broker regulation account in
the state general fund.
(c) All expenses incurred in the administration of this chapter
shall be paid from appropriations made from the state general fund.
However, costs of investigations and civil penalties recovered under
this chapter shall be deposited in the securities division enforcement
account created under IC 23-19-6-1(f). The funds in the securities
division enforcement account shall be available, with the approval of
the budget agency, to augment and supplement the funds
appropriated for the administration of this chapter.
As added by P.L.235-1985, SEC.1. Amended by P.L.115-2001,
SEC.4; P.L.27-2007, SEC.18.
IC 23-2-5-7 Version b
Loan broker regulation account
Note: This version of section effective 1-1-2010. See also
preceding version of this section, effective until 1-1-2010.
Sec. 7. (a) The loan broker regulation account is created in the
state general fund. The money in the loan broker regulation account
may be used only for the regulation of loan brokers, mortgage loan
originators, and principal managers under this chapter. The loan
broker regulation account shall be administered by the treasurer of
state. The money in the loan broker regulation account does not
revert to any other account within the state general fund at the end of
a state fiscal year.
(b) Except as provided in subsection (c), all fees and funds
accruing from the administration of this chapter shall be accounted
for by the commissioner and shall be deposited with the treasurer of
state who shall deposit them in the loan broker regulation account in
the state general fund.
(c) All expenses incurred in the administration of this chapter
shall be paid from appropriations made from the state general fund.
However, costs of investigations incurred under this chapter shall be
paid from, and civil penalties recovered under this chapter shall be
deposited in, the securities division enforcement account created
under IC 23-19-6-1(f). The funds in the securities division
enforcement account shall be available, with the approval of the
budget agency, to augment and supplement the funds appropriated
for the administration of this chapter.
As added by P.L.235-1985, SEC.1. Amended by P.L.115-2001,
SEC.4; P.L.27-2007, SEC.18; P.L.156-2009, SEC.6.
IC 23-2-5-8
Repealed
(Repealed by P.L.113-1992, SEC.10.)
IC 23-2-5-9
Statute of frauds; required statement
Sec. 9. (a) To be enforceable, every contract for the services of a
loan broker shall be in writing and signed by the contracting parties.
IC 23-2-5-9.1 Version a
Real estate appraisals; improper influence; ownership interest in
appraisal company
Note: This version of section effective until 1-1-2010. See also
following version of this section, effective 1-1-2010.
Sec. 9.1. (a) As used in this section, "appraisal company" means
a person that employs or retains the services of one (1) or more real
estate appraisers.
(b) As used in this section, "immediate family", with respect to an
individual, refers to:
(1) the individual's spouse who resides in the individual's
household; and
(2) any dependent child of the individual.
(c) As used in this section, "real estate appraiser" means a person
who:
(1) is licensed as a real estate broker under IC 25-34.1 and
performs real estate appraisals within the scope of the person's
license; or
(2) holds a real estate appraiser license or certificate issued
under IC 25-34.1-8.
(d) A person licensed or registered under this chapter, or a person
required to be licensed or registered under this chapter, shall not
knowingly bribe, coerce, or intimidate another person to corrupt or
improperly influence the independent judgment of a real estate
appraiser with respect to the value of any real estate offered as
security for a mortgage loan.
(e) Except as provided in subsection (f), after June 30, 2007:
(1) a person licensed or registered under this chapter, or a
person required to be licensed or registered under this chapter;
(2) a member of the immediate family of:
(A) a person licensed or registered under this chapter; or
(B) a person required to be licensed or registered under this
chapter; or
(3) a person described in subdivision (1) or (2) in combination
with one (1) or more other persons described in subdivision (1)
or (2);
may not own or control a majority interest in an appraisal company.
(f) This subsection applies to a person or combination of persons
described in subsection (e) who own or control a majority interest in
an appraisal company on June 30, 2007. The prohibition set forth in
subsection (e) does not apply to a person or combination of persons
described in this subsection, subject to the following:
(1) The interest in the appraisal company owned or controlled
by the person or combination of persons described in subsection
(e) shall not be increased after June 30, 2007.
(2) The interest of a person licensed or registered under this
chapter, or of a person required to be licensed or registered
under this chapter, shall not be transferred to a member of the
person's immediate family.
(3) If the commissioner determines that any person or
combination of persons described in subsection (e) has violated
this chapter, the commissioner may order one (1) or more of the
persons to divest their interest in the appraisal company. The
commissioner may exercise the remedy provided by this
subdivision in addition to, or as a substitute for, any other
remedy available to the commissioner under this chapter.
As added by P.L.230-2007, SEC.10.
IC 23-2-5-9.1 Version b
Real estate appraisals; improper influence; ownership interest in
appraisal company
Note: This version of section effective 1-1-2010. See also
preceding version of this section, effective until 1-1-2010.
Sec. 9.1. (a) As used in this section, "appraisal company" means
a business entity that:
(1) performs real estate appraisals on a regular basis for
compensation through one (1) or more owners, officers,
employees, or agents; or
(2) holds itself out to the public as performing real estate
appraisals.
(b) As used in this section, "immediate family", with respect to an
individual, refers to:
(1) the individual's spouse who resides in the individual's
household; and
(2) any dependent child of the individual.
(c) As used in this section, "real estate appraiser" means a person
who:
(1) is licensed as a real estate broker under IC 25-34.1 and
performs real estate appraisals within the scope of the person's
license;
(2) holds a real estate appraiser license or certificate issued
under IC 25-34.1-3-8; or
(3) otherwise performs real estate appraisals in Indiana.
(d) A person licensed under this chapter, or a person required to
be licensed under this chapter, shall not knowingly bribe, coerce, or
intimidate another person to corrupt or improperly influence the
independent judgment of a real estate appraiser with respect to the
value of any real estate offered as security for a residential mortgage
loan.
(e) Except as provided in subsection (f):
(1) a person licensed under this chapter, or a person required to
be licensed under this chapter;
(2) a member of the immediate family of:
(A) a person licensed under this chapter; or
(B) a person required to be licensed under this chapter; or
(3) a person described in subdivision (1) or (2) in combination
with one (1) or more other persons described in subdivision (1)
or (2);
may not own or control a majority interest in an appraisal company.
(f) This subsection applies to a person or combination of persons
described in subsection (e) who own or control a majority interest in
an appraisal company on June 30, 2007. The prohibition set forth in
subsection (e) does not apply to a person or combination of persons
described in this subsection, subject to the following:
(1) The interest in the appraisal company owned or controlled
by the person or combination of persons described in subsection
(e) shall not be increased after June 30, 2007.
(2) The interest of a person licensed under this chapter, or of a
person required to be licensed under this chapter, shall not be
transferred to a member of the person's immediate family.
(3) If the commissioner determines that any person or
combination of persons described in subsection (e) has violated
this chapter, the commissioner may order one (1) or more of the
persons to divest their interest in the appraisal company. The
commissioner may exercise the remedy provided by this
subdivision in addition to, or as a substitute for, any other
remedy available to the commissioner under this chapter.
As added by P.L.230-2007, SEC.10. Amended by P.L.156-2009,
SEC.7.
IC 23-2-5-10 Version a
Violations; investigation by commissioner; orders and notices;
hearing; denial, suspension, or revocation of license or
registration; censure; summary orders; transfer or termination of
registration
Note: This version of section effective until 1-1-2010. See also
following version of this section, effective 1-1-2010.
Sec. 10. (a) Whenever it appears to the commissioner that a
person has engaged in or is about to engage in an act or a practice
constituting a violation of this chapter or a rule or an order under this
chapter, the commissioner may investigate and may issue, with a
prior hearing if there exists no substantial threat of immediate
irreparable harm or without a prior hearing, if there exists a
substantial threat of immediate irreparable harm, orders and notices
as the commissioner determines to be in the public interest, including
cease and desist orders, orders to show cause, and notices. After
notice and hearing, the commissioner may enter an order of
rescission, restitution, or disgorgement, including interest at the rate
of eight percent (8%) per year, directed to a person who has violated
this chapter or a rule or order under this chapter.
(b) Upon the issuance of an order or notice without a prior hearing
by the commissioner under subsection (a), the commissioner shall
promptly notify the respondent and, if the subject of the order or
notice is a registrant, the licensee for whom the registrant is
employed:
(1) that the order or notice has been issued;
(2) of the reasons the order or notice has been issued; and
(3) that upon the receipt of a written request the matter will be
set down for a hearing to commence within fifteen (15) business
days after receipt of the request unless the respondent consents
to a later date.
If a hearing is not requested and not ordered by the commissioner, an
order remains in effect until it is modified or vacated by the
commissioner. If a hearing is requested or ordered, the
commissioner, after notice of an opportunity for hearing, may modify
or vacate the order or extend it until final determination.
(c) The commissioner may deny an application for an initial or a
renewal license or registration, and may suspend or revoke the
license of a licensee or the registration of a registrant if the applicant,
the licensee, the registrant, or an ultimate equitable owner of an
applicant or of a licensee:
(1) fails to maintain the bond required under section 5 of this
chapter;
(2) has, within the most recent ten (10) years:
(A) been the subject of an adjudication or a determination
by:
(i) a court with jurisdiction; or
(ii) an agency or administrator that regulates securities,
commodities, banking, financial services, insurance, real
estate, or the real estate appraisal industry;
in Indiana or in any other jurisdiction; and
(B) been found, after notice and opportunity for hearing, to
have violated the securities, commodities, banking, financial
services, insurance, real estate, or real estate appraisal laws
of Indiana or any other jurisdiction;
(3) has:
(A) been denied the right to do business in the securities,
commodities, banking, financial services, insurance, real
estate, or real estate appraisal industry; or
(B) had the person's authority to do business in the
securities, commodities, banking, financial services,
insurance, real estate, or real estate appraisal industry
revoked or suspended;
by Indiana or by any other state, federal, or foreign
governmental agency or self regulatory organization;
(4) is insolvent;
(5) has violated any provision of this chapter;
(6) has knowingly filed with the commissioner any document or
statement that:
(A) contains a false representation of a material fact;
(B) fails to state a material fact; or
(C) contains a representation that becomes false after the
filing but during the term of a license or certificate of
registration as provided in subsection (i);
(7) has:
(A) been convicted, within ten (10) years before the date of
the application, renewal, or review, of any crime involving
fraud or deceit; or
(B) had a felony conviction (as defined in IC 35-50-2-1(b))
within five (5) years before the date of the application,
renewal, or review;
(8) if the person is a licensee or principal manager, has failed to
reasonably supervise the person's originators or employees to
ensure their compliance with this chapter;
(9) is on the most recent tax warrant list supplied to the
commissioner by the department of state revenue; or
(10) has engaged in dishonest or unethical practices in the loan
broker business, as determined by the commissioner.
(d) The commissioner may do either of the following:
(1) Censure:
(A) a licensee;
(B) an officer, a director, or an ultimate equitable owner of
a licensee;
(C) a registrant; or
(D) any other person;
who violates or causes a violation of this chapter.
(2) Permanently bar any person described in subdivision (1)
from being:
(A) licensed or registered under this chapter; or
(B) employed by or affiliated with a person licensed or
registered under this chapter;
if the person violates or causes a violation of this chapter.
(e) The commissioner may not enter a final order:
(1) denying, suspending, or revoking the license of a licensee or
the registration of a registrant; or
(2) imposing other sanctions;
without prior notice to all interested parties, opportunity for a
hearing, and written findings of fact and conclusions of law.
However, the commissioner may by summary order deny, suspend,
or revoke a license or certificate of registration pending final
determination of any proceeding under this section or before any
proceeding is initiated under this section. Upon the entry of a
summary order, the commissioner shall promptly notify all interested
parties that the summary order has been entered, of the reasons for
the summary order, and that upon receipt by the commissioner of a
written request from a party, the matter will be set for hearing to
commence within fifteen (15) business days after receipt of the
request. If no hearing is requested and none is ordered by the
commissioner, the order remains in effect until it is modified or
vacated by the commissioner. If a hearing is requested or ordered, the
commissioner, after notice of the hearing has been given to all
interested persons and the hearing has been held, may modify or
vacate the order or extend it until final determination.
(f) IC 4-21.5 does not apply to a proceeding under this section.
(g) If a registrant seeks to transfer the registrant's registration to
another licensee who desires to have the registrant engage in
origination activities or serve as a principal manager, whichever
applies, the registrant shall, before the registrant conducts origination
activities or serves as a principal manager for the new employer,
submit to the commissioner, on a form prescribed by the
commissioner, a registration application, as required by section 5 of
this chapter.
(h) If the employment of a registrant is terminated, whether:
(1) voluntarily by the registrant; or
(2) by the licensee employing the registrant;
the licensee that employed the registrant shall, not later than five (5)
days after the termination, notify the commissioner of the
termination and the reasons for the termination.
(i) If a material fact or statement included in an application under
this chapter changes after the application has been submitted, the
applicant shall provide written notice to the commissioner of the
change. The commissioner may revoke or refuse to renew the license
or registration of any person who:
(1) is required to submit a written notice under this subsection
and fails to provide the required notice within two (2) business
days after the person discovers or should have discovered the
change; or
(2) would not qualify for licensure or registration under this
chapter as a result of the change in a material fact or statement.
As added by P.L.235-1985, SEC.1. Amended by P.L.11-1996,
SEC.20; P.L.230-1999, SEC.5; P.L.14-2000, SEC.53; P.L.270-2003,
SEC.3; P.L.48-2006, SEC.7; P.L.230-2007, SEC.11; P.L.145-2008,
SEC.14.
IC 23-2-5-10 Version b
Violations; investigation by commissioner; orders and notices;
hearing; denial, suspension, or revocation of license; censure;
summary orders; transfer or termination of license; change of
material fact or statement
Note: This version of section effective 1-1-2010. See also
preceding version of this section, effective until 1-1-2010.
Sec. 10. (a) Whenever it appears to the commissioner that a
person has engaged in or is about to engage in an act or a practice
constituting a violation of this chapter or a rule or an order under this
chapter, the commissioner may investigate and may issue, with a
prior hearing if there exists no substantial threat of immediate
irreparable harm or without a prior hearing, if there exists a
substantial threat of immediate irreparable harm, orders and notices
as the commissioner determines to be in the public interest, including
cease and desist orders, orders to show cause, and notices. After
notice and hearing, the commissioner may enter an order of
rescission, restitution, or disgorgement, including interest at the rate
of eight percent (8%) per year, directed to a person who has violated
this chapter or a rule or order under this chapter.
(b) Upon the issuance of an order or notice without a prior hearing
by the commissioner under subsection (a), the commissioner shall
promptly notify the respondent and, if the subject of the order or
notice is a mortgage loan originator licensee or a principal manager
licensee, the loan broker licensee for whom the mortgage loan
originator or principal manager is employed:
(1) that the order or notice has been issued;
(2) of the reasons the order or notice has been issued; and
(3) that upon the receipt of a written request the matter will be
set for a hearing to commence not later than fifteen (15)
business days after receipt of the request if the original order
issued by the commissioner was a summary suspension,
summary revocation, or denial of a license and not later than
forty-five (45) business days after receipt of the request for all
other orders unless the respondent consents to a later date.
If a hearing is not requested and not ordered by the commissioner, an
order remains in effect until it is modified or vacated by the
commissioner. If a hearing is requested or ordered, the
commissioner, after notice of an opportunity for hearing, may modify
or vacate the order or extend it until final determination.
(c) The commissioner may deny an application for an initial or a
renewal license, and may suspend or revoke the license of a licensee
if the applicant, the licensee, or an ultimate equitable owner of an
applicant for a loan broker license or of a loan broker licensee:
(1) has, within the most recent ten (10) years:
(A) been the subject of an adjudication or a determination
by:
(i) a court with jurisdiction; or
(ii) an agency or administrator that regulates securities,
commodities, banking, financial services, insurance, real
estate, or the real estate appraisal industry;
in Indiana or in any other jurisdiction; and
(B) been found, after notice and opportunity for hearing, to
have violated the securities, commodities, banking, financial
services, insurance, real estate, or real estate appraisal laws
of Indiana or any other jurisdiction;
(2) except as provided in subsection (d)(1) with respect to the
loan brokerage business, has:
(A) been denied the right to do business in the securities,
commodities, banking, financial services, insurance, real
estate, or real estate appraisal industry; or
(B) had the person's authority to do business in the
securities, commodities, banking, financial services,
insurance, real estate, or real estate appraisal industry
revoked or suspended;
by Indiana or by any other state, federal, or foreign
governmental agency or self regulatory organization;
(3) is insolvent;
(4) has violated any provision of this chapter;
(5) has knowingly filed with the commissioner any document or
statement that:
(A) contains a false representation of a material fact;
(B) fails to state a material fact; or
(C) contains a representation that becomes false after the
filing but during the term of a license as provided in
subsection (j);
(6) has been convicted, within ten (10) years before the date of
the application, renewal, or review, of any crime, other than a
felony, involving fraud or deceit;
(7) if the person is a loan broker licensee or a principal
manager, has failed to reasonably supervise the person's
mortgage loan originators or employees to ensure their
compliance with this chapter;
(8) is on the most recent tax warrant list supplied to the
commissioner by the department of state revenue; or
(9) has engaged in dishonest or unethical practices in the loan
brokerage business, as determined by the commissioner.
(d) The commissioner shall deny an application for an initial or a
renewal license and shall revoke the license of a licensee if the
applicant, the licensee, or an ultimate equitable owner of an applicant
for a loan broker license or of a loan broker licensee:
(1) has had a:
(A) loan broker license issued under this chapter;
(B) mortgage loan originator license issued under this
chapter;
(C) principal manager license issued under this chapter; or
(D) license that is:
(i) equivalent to a license described in clause (A), (B), or
(C); and
(ii) issued by another jurisdiction;
revoked by the commissioner or the appropriate regulatory
agency in another jurisdiction, whichever applies;
(2) has been convicted of or pleaded guilty or nolo contendere
to a felony in a domestic, foreign, or military court:
(A) during the seven (7) year period immediately preceding
the date of the application or review; or
(B) at any time preceding the date of the application or
review if the felony involved an act of fraud or dishonesty,
a breach of trust, or money laundering;
(3) fails to maintain the bond required under section 5(d) of this
chapter;
(4) fails to demonstrate the financial responsibility, character,
and general fitness necessary to:
(A) command the confidence of the community in which the
applicant or licensee engages or will engage in the loan
brokerage business; and
(B) warrant a determination by the commissioner that the
applicant or licensee will operate honestly, fairly, and
efficiently within the purposes of this chapter;
(5) has failed to meet the education requirements set forth in
section 21 of this chapter;
(6) has failed to pass the written examination required by
section 5.5 of this chapter; or
(7) fails to:
(A) keep or maintain records in accordance with section 18
of this chapter; or
(B) allow the commissioner or an agent appointed by the
commissioner to inspect or examine a loan broker licensee's
books and records to determine compliance with section 18
of this chapter.
(e) The commissioner may do either of the following:
(1) Censure:
(A) a licensee;
(B) an officer, a director, or an ultimate equitable owner of
a loan broker licensee; or
(C) any other person;
who violates or causes a violation of this chapter.
(2) Permanently bar any person described in subdivision (1)
from being:
(A) licensed under this chapter; or
(B) employed by or affiliated with a person licensed under
this chapter;
if the person violates or causes a violation of this chapter.
(f) The commissioner may not enter a final order:
(1) denying, suspending, or revoking the license of an applicant
or a licensee; or
(2) imposing other sanctions;
without prior notice to all interested parties, opportunity for a
hearing, and written findings of fact and conclusions of law.
However, the commissioner may by summary order deny, suspend,
or revoke a license pending final determination of any proceeding
under this section or before any proceeding is initiated under this
section. Upon the entry of a summary order, the commissioner shall
promptly notify all interested parties that the summary order has
been entered, of the reasons for the summary order, and that upon
receipt by the commissioner of a written request from a party, the
matter will be set for hearing to commence not later than forty-five
(45) business days after receipt of the request. If no hearing is
requested and none is ordered by the commissioner, the order
remains in effect until it is modified or vacated by the commissioner.
If a hearing is requested or ordered, the commissioner, after notice
of the hearing has been given to all interested persons and the
hearing has been held, may modify or vacate the order or extend it
until final determination.
IC 23-2-5-11 Version a
Powers and duties of commissioner; use immunity for witnesses;
certificate of compliance or noncompliance; authority to compel
compliance; multistate automated licensing system and repository
Note: This version of section effective until 1-1-2010. See also
following version of this section, effective 1-1-2010.
Sec. 11. (a) The commissioner may do the following:
(1) Adopt rules under IC 4-22-2 to implement this chapter.
(2) Make investigations and examinations:
(A) in connection with any application for licensure or for
registration of a licensee or registrant or with any license or
certificate of registration already granted; or
in any action at law or in equity to enforce this chapter.
(d) If:
(1) a person disobeys any lawful:
(A) subpoena issued under this chapter; or
(B) order or demand requiring the production of any books,
accounts, papers, records, documents, or other evidence or
information as provided in this chapter; or
(2) a witness refuses to:
(A) appear when subpoenaed;
(B) testify to any matter about which the witness may be
lawfully interrogated; or
(C) take or subscribe to any oath required by this chapter;
the circuit or superior court of the county in which the hearing,
inquiry, or investigation in question is held, if demand is made or if,
upon written petition, the production is ordered to be made, or the
commissioner or a hearing officer appointed by the commissioner,
shall compel compliance with the lawful requirements of the
subpoena, order, or demand, compel the production of the necessary
or required books, papers, records, documents, and other evidence
and information, and compel any witness to attend in any Indiana
county and to testify to any matter about which the witness may
lawfully be interrogated, and to take or subscribe to any oath
required.
(e) If a person fails, refuses, or neglects to comply with a court
order under this section, the person shall be punished for contempt
of court.
(f) The commissioner's authority to designate a multistate
automated licensing system and repository under subsection (a)(16)
is subject to the following:
(1) The commissioner may not require any person exempt from
licensure or registration under this chapter, or any employee or
agent of an exempt person, to:
(A) submit information to; or
(B) participate in;
the multistate automated licensing system and repository.
(2) The commissioner may require a person required under this
chapter to submit information to the multistate automated
licensing system and repository to pay a processing fee
considered reasonable by the commissioner.
As added by P.L.235-1985, SEC.1. Amended by P.L.230-1999,
SEC.6; P.L.48-2006, SEC.8; P.L.145-2008, SEC.15.
IC 23-2-5-11 Version b
Powers and duties of commissioner; use immunity for witnesses;
certificate of compliance or noncompliance; authority to compel
compliance; multistate automated licensing system and repository
Note: This version of section effective 1-1-2010. See also
preceding version of this section, effective until 1-1-2010.
Sec. 11. (a) The commissioner may do the following:
(1) Adopt rules under IC 4-22-2 to implement this chapter.
under this chapter against a specified person for engaging in a
specified act, practice, or course of business if the
determination is consistent with this chapter. The commissioner
may adopt rules to establish fees for individuals requesting an
interpretive opinion or a determination under this subdivision.
A person may not request an interpretive opinion or a
determination concerning an activity that:
(A) occurred before; or
(B) is occurring on;
the date the opinion or determination is requested.
(16) Subject to subsection (f), designate a multistate automated
licensing system and repository, established and operated by a
third party, to serve as the sole entity responsible for:
(A) processing applications for:
(i) licenses under this chapter; and
(ii) renewals of licenses under this chapter; and
(B) performing other services that the commissioner
determines are necessary for the orderly administration of
the division's licensing system.
A multistate automated licensing system and repository
described in this subdivision may include the Nationwide
Mortgage Licensing System and Registry established by the
Conference of State Bank Supervisors and the American
Association of Residential Mortgage Regulators. The
commissioner may take any action necessary to allow the
division to participate in a multistate automated licensing
system and repository.
(b) If a witness, in any hearing, inquiry, or investigation
conducted under this chapter, refuses to answer any question or
produce any item, the commissioner may file a written petition with
the circuit or superior court in the county where the hearing,
investigation, or inquiry in question is being conducted requesting a
hearing on the refusal. The court shall hold a hearing to determine if
the witness may refuse to answer the question or produce the item.
If the court determines that the witness, based upon the witness's
privilege against self-incrimination, may properly refuse to answer
or produce an item, the commissioner may make a written request
that the court grant use immunity to the witness. Upon written
request of the commissioner, the court shall grant use immunity to a
witness. The court shall instruct the witness, by written order or in
open court, that:
(1) any evidence the witness gives, or evidence derived from
that evidence, may not be used in any criminal proceedings
against that witness, unless the evidence is volunteered by the
witness or is not responsive to a question; and
(2) the witness must answer the questions asked and produce
the items requested.
A grant of use immunity does not prohibit evidence that the witness
gives in a hearing, investigation, or inquiry from being used in a
prosecution for perjury under IC 35-44-2-1. If a witness refuses to
give the evidence after the witness has been granted use immunity,
the court may find the witness in contempt.
(c) In any prosecution, action, suit, or proceeding based upon or
arising out of this chapter, the commissioner may sign a certificate
showing compliance or noncompliance with this chapter by any
person. This shall constitute prima facie evidence of compliance or
noncompliance with this chapter and shall be admissible in evidence
in any action at law or in equity to enforce this chapter.
(d) If:
(1) a person disobeys any lawful:
(A) subpoena issued under this chapter; or
(B) order or demand requiring the production of any books,
accounts, papers, records, documents, or other evidence or
information as provided in this chapter; or
(2) a witness refuses to:
(A) appear when subpoenaed;
(B) testify to any matter about which the witness may be
lawfully interrogated; or
(C) take or subscribe to any oath required by this chapter;
the circuit or superior court of the county in which the hearing,
inquiry, or investigation in question is held, if demand is made or if,
upon written petition, the production is ordered to be made, or the
commissioner or a hearing officer appointed by the commissioner,
shall compel compliance with the lawful requirements of the
subpoena, order, or demand, compel the production of the necessary
or required books, papers, records, documents, and other evidence
and information, and compel any witness to attend in any Indiana
county and to testify to any matter about which the witness may
lawfully be interrogated, and to take or subscribe to any oath
required.
(e) If a person fails, refuses, or neglects to comply with a court
order under this section, the person shall be punished for contempt
of court.
(f) The commissioner's authority to designate a multistate
automated licensing system and repository under subsection (a)(16)
is subject to the following:
(1) The commissioner may not require any person that is not
required to be licensed under this chapter, or any employee or
agent of a person that is not required to be licensed under this
chapter, to:
(A) submit information to; or
(B) participate in;
the multistate automated licensing system and repository.
(2) The commissioner may require a person required under this
chapter to submit information to the multistate automated
licensing system and repository to pay a processing fee
considered reasonable by the commissioner.
As added by P.L.235-1985, SEC.1. Amended by P.L.230-1999,
SEC.6; P.L.48-2006, SEC.8; P.L.145-2008, SEC.15; P.L.156-2009,
SEC.9.
IC 23-2-5-13
Court to compel obedience to subpoena, order, or demand
Sec. 13. Upon:
(1) disobedience on the part of any person to any lawful
subpoena issued under this chapter, or to any lawful order or
demand requiring the production of any books, accounts,
papers, records, documents, or other evidence or information as
provided in this chapter; or
(2) the refusal of any witness to appear when subpoenaed, to
testify to any matter regarding which the witness may be
lawfully interrogated, or to take or subscribe to any oath
required by this chapter;
it shall be the duty of the circuit or superior court of the county in
which the hearing or inquiry or investigation in question is being or
is to be held, where demand is made, or where the production is
ordered to be made, upon written petition of the commissioner, to
compel obedience to the lawful requirements of the subpoena, order,
or demand.
As added by P.L.235-1985, SEC.1. Amended by P.L.230-1999,
SEC.7.
IC 23-2-5-14
Civil penalty; actions to enforce penalties
Sec. 14. (a) If the commissioner determines, after a hearing, that
a person has violated this chapter, the commissioner may, in addition
to all other remedies, impose a civil penalty upon the person in an
amount not to exceed ten thousand dollars ($10,000) for each
violation.
(b) The commissioner may bring an action in the circuit or
superior court of Marion County to enforce payment of any penalty
imposed under this section.
As added by P.L.235-1985, SEC.1. Amended by P.L.230-1999,
SEC.8.
IC 23-2-5-15
Violation; liability for damages, interest, and attorney's fees;
contract void
Sec. 15. Any person who violates this chapter or any rule or
regulation adopted under this chapter, in connection with a contract
for the services of a loan broker, is liable to any person damaged by
the violation, for the amount of the actual damages suffered, interest
at the legal rate, and attorney's fees. If a person violates any
provision of this chapter, or any rule or regulation adopted under this
chapter, in connection with a contract for loan brokering services, the
contract is void, and the prospective borrower is entitled to receive
from the loan broker all sums paid to the loan broker.
As added by P.L.235-1985, SEC.1. Amended by P.L.230-1999,
SEC.9; P.L.230-2007, SEC.12.
IC 23-2-5-16
Violations; felonies
Sec. 16. (a) Except as provided in subsection (b), a person who
knowingly violates this chapter commits a Class C felony.
(b) A person who knowingly violates this chapter commits a Class
B felony if the person damaged by the violation is at least sixty (60)
years of age.
(c) A person commits a Class C felony if the person knowingly
makes or causes to be made:
(1) in any document filed with or sent to the commissioner or
the securities division; or
(2) in any proceeding, investigation, or examination under this
chapter;
any statement that is, at the time and in the light of the circumstances
under which it is made, false or misleading in any material respect.
As added by P.L.235-1985, SEC.1. Amended by P.L.230-2007,
SEC.13; P.L.156-2009, SEC.10.
IC 23-2-5-17
Rescission of transaction; limitations
Sec. 17. (a) If a transaction for which a loan broker has charged
any fee is rescinded by any person under the provisions of the
Truth-in-Lending Act (15 U.S.C. 1601-1667e) within twenty (20)
calendar days after a notice of the rescission has been delivered to
the creditor, the loan broker shall return to the person any
consideration that has been given to the loan broker other than bona
fide third party fees.
(b) For purposes of calculating the time period during which a
person may avoid a contract under IC 24-5-10-8 or IC 24-4.5-2-502,
a contract with a loan broker shall be considered to be a sale of
services that occurs on the date on which the person signs the written
contract required by section 9 of this chapter.
As added by P.L.247-1987, SEC.4. Amended by P.L.3-1990, SEC.82;
P.L.113-1992, SEC.6.
IC 23-2-5-18 Version a
Account numbers; records; retention; breach of security of
records; disclosure requirements; disposal of personal information
Note: This version of section effective until 1-1-2010. See also
following version of this section, effective 1-1-2010.
IC 23-2-5-18 Version b
Account numbers; records; retention; breach of security of
records; disclosure requirements; disposal of personal information
Note: This version of section effective 1-1-2010. See also
preceding version of this section, effective until 1-1-2010.
Sec. 18. (a) Each loan broker agreement shall be given an account
number. Each person licensed as a loan broker or required to be
licensed as a loan broker under this chapter shall keep and maintain
the following records or their electronic equivalent:
(1) A file for each borrower or proposed borrower that contains
the following:
(A) The name and address of the borrower or any proposed
borrower.
(B) A copy of the signed loan broker agreement.
(C) A copy of any other papers or instruments used in
connection with the loan broker agreement and signed by the
borrower or any proposed borrower.
(D) If a loan was obtained for the borrower, the name and
address of the creditor.
(E) If a loan is accepted by the borrower, a copy of the loan
agreement.
(F) The amount of the loan broker's fee that the borrower has
paid. If there is an unpaid balance, the status of any
collection efforts.
(2) All receipts from or for the account of borrowers or any
proposed borrowers and all disbursements to or for the account
of borrowers or any proposed borrowers, recorded so that the
transactions are readily identifiable.
(3) A general ledger that shall be posted at least monthly, and
a trial balance sheet and profit and loss statement prepared
within thirty (30) days of the commissioner's request for the
information.
(4) A sample of:
(A) all advertisements, pamphlets, circulars, letters, articles,
or communications published in any newspaper, magazine,
or periodical;
(B) scripts of any recording, radio, or television
announcement; and
(C) any sales kits or literature;
to be used in solicitation of borrowers.
(5) A report that lists all residential mortgage loans, including
pending loans and loans that were not closed, originated by the
loan broker. The report required by this subdivision must be
searchable by, or organized according to, the borrower's last
name and must include the following information for each
residential mortgage loan listed:
(A) The name and address of the borrower or potential
borrower.
(B) The name of the creditor.
(C) The name of the mortgage loan originator.
(D) The loan amount.
(E) The status of the loan, including the date of closing or
denial by the creditor.
(F) The interest rate for the loan.
The report required by this subdivision may be prepared or
produced by or through the loan broker's loan origination
software or other software used by the loan broker in its loan
brokerage business.
(b) The records listed in subsection (a) shall be kept for a period
of two (2) years in the office of the loan broker in which the loan was
originated and must be separate or readily identifiable from the
records of any other business that is conducted in the office of the
loan broker. If the office in which any records are required to be kept
under this subsection is located outside Indiana, the records must be:
(1) made available at a location that is:
(A) located in Indiana; and
(B) accessible to the securities division; or
(2) maintained electronically and made available to the
securities division not later than ten (10) business days after a
request by the securities division to inspect or examine the
records.
(c) If a breach of the security of any records:
(1) maintained by a loan broker under this section; and
(2) containing the unencrypted, unredacted personal
information of one (1) or more borrowers or prospective
borrowers;
occurs, the loan broker is subject to the disclosure requirements
under IC 24-4.9-3, unless the loan broker is exempt from the
disclosure requirements under IC 24-4.9-3-4.
(d) A person who is licensed or required to be licensed under this
chapter may not dispose of the unencrypted, unredacted personal
information of one (1) or more borrowers or prospective borrowers
without first shredding, incinerating, mutilating, erasing, or
otherwise rendering the information illegible or unusable.
As added by P.L.247-1987, SEC.5. Amended by P.L.113-1992,
SEC.7; P.L.230-1999, SEC.10; P.L.145-2008, SEC.16;
P.L.156-2009, SEC.11.
IC 23-2-5-18.5 Version a
Possession of funds belonging to others; duties to prospective
borrower
Note: This version of section effective until 1-1-2010. See also
following version of this section, effective 1-1-2010.
IC 23-2-5-18.5 Version b
Possession of funds belonging to others; duties to prospective
borrower
Note: This version of section effective 1-1-2010. See also
preceding version of this section, effective until 1-1-2010.
Sec. 18.5. Whenever a person licensed under this chapter, or a
person required to be licensed under this chapter, has possession of
funds belonging to others, including money received by or on behalf
of a prospective borrower, the person licensed under this chapter, or
required to be licensed under this chapter, shall:
(1) upon request of the prospective borrower, account for any
funds handled for the prospective borrower;
(2) follow any reasonable and lawful instructions from the
prospective borrower concerning the prospective borrower's
funds; and
(3) return any unspent funds of the prospective borrower to the
prospective borrower in a timely manner.
As added by P.L.230-2007, SEC.14. Amended by P.L.156-2009,
SEC.12.
IC 23-2-5-18.7
Reports of condition
IC 23-2-5-19 Version a
Exempt persons; burden of proof
Note: This version of section effective until 7-1-2009. See also
following repeal of this section, effective 7-1-2009.
IC 23-2-5-19 Version b
Repealed
(Repealed by P.L.156-2009, SEC.25.)
Note: This repeal of section effective 7-1-2009. See also
preceding version of this section, effective until 7-1-2009.
IC 23-2-5-20
Prohibited acts
Sec. 20. (a) A person shall not, in connection with a contract for
the services of a loan broker, either directly or indirectly, do any of
the following:
(1) Employ any device, scheme, or artifice to defraud.
(2) Make any untrue statements of a material fact or omit to
state a material fact necessary in order to make the statements
made, in the light of circumstances under which they are made,
not misleading.
(3) Engage in any act, practice, or course of business that
operates or would operate as a fraud or deceit upon any person.
(4) Collect or solicit any consideration, except a bona fide third
party fee, in connection with a loan until the loan has been
closed.
(5) Receive any funds if the person knows that the funds were
generated as a result of a fraudulent act.
(6) File or cause to be filed with a county recorder any
document that the person knows:
(A) contains:
(i) a misstatement; or
(ii) an untrue statement;
of a material fact; or
(B) omits a statement of a material fact that is necessary to
make the statements that are made, in the light of
circumstances under which they are made, not misleading.
(7) Knowingly release or disclose the unencrypted, unredacted
personal information of one (1) or more borrowers or
prospective borrowers, unless the personal information is used
in an activity authorized by the borrower or prospective
borrower under one (1) or more of the following circumstances:
(A) The personal information is:
(i) included on an application form or another form; or
(ii) transmitted as part of an application process or an
enrollment process.
(B) The personal information is used to obtain a consumer
report (as defined in IC 24-5-24-2) for an applicant for
credit.
(C) The personal information is used to establish, amend, or
terminate an account, a contract, or a policy, or to confirm
the accuracy of the personal information.
However, personal information allowed to be disclosed under
this subdivision may not be printed in whole or in part on a
postcard or other mailer that does not require an envelope, or in
a manner that makes the personal information visible on an
envelope or a mailer without the envelope or mailer being
opened.
(8) Engage in any reckless or negligent activity allowing the
release or disclosure of the unencrypted, unredacted personal
information of one (1) or more borrowers or prospective
borrowers. An activity described in this subdivision includes an
action prohibited by section 18(d) of this chapter.
(9) Knowingly bribe, coerce, or intimidate another person to
corrupt or improperly influence the independent judgment of a
real estate appraiser with respect to the value of any real estate
offered as security for a residential mortgage loan, as prohibited
by section 9.1(d) of this chapter.
(10) Violate any of the following:
(A) The federal Truth in Lending Act (15 U.S.C. 1601 et
seq.).
(B) The federal Real Estate Settlement Procedures Act (12
U.S.C. 2601 et seq.), as amended.
(C) The federal Equal Credit Opportunity Act (15 U.S.C.
1691 et seq.).
(D) Any other federal law or regulation concerning
residential mortgage lending.
(b) A person who commits an act described in subsection (a) is
subject to sections 10, 14, 15, and 16 of this chapter.
As added by P.L.247-1987, SEC.7. Amended by P.L.113-1992,
SEC.9; P.L.230-1999, SEC.12; P.L.115-2001, SEC.5; P.L.145-2008,
SEC.18; P.L.156-2009, SEC.14.
IC 23-2-5-20.5 Version a
Origination activities; registration required; registered principal
manager required at each location
Note: This version of section effective until 1-1-2010. See also
following version of this section, effective 1-1-2010.
Sec. 20.5. (a) A person licensed or required to be licensed as a
loan broker under this chapter shall not employ a person to engage
in origination activities unless the person is registered as an
originator or a principal manager under this chapter. The registration
of an originator or a principal manager is not effective during any
period in which the originator or principal manager is not employed
by a loan broker licensed under this chapter.
(b) A person licensed or required to be licensed as a loan broker
under this chapter shall not operate any principal or branch office of
a loan brokerage business without employing a registered principal
manager at that location.
As added by P.L.230-2007, SEC.16.
IC 23-2-5-20.5 Version b
Employment by loan broker; license required; licensed principal
manager required at each location; supervision of employees;
representation to the public
Note: This version of section effective 1-1-2010. See also
preceding version of this section, effective until 1-1-2010.
Sec. 20.5. (a) A person licensed or required to be licensed as a
loan broker under this chapter shall not employ a person to act as a
mortgage loan originator unless the person is licensed as a mortgage
loan originator or a principal manager under this chapter. The license
of a mortgage loan originator or a principal manager is not effective
during any period in which the mortgage loan originator or principal
manager is not employed by a loan broker licensed under this
chapter.
(b) A person licensed or required to be licensed as a loan broker
under this chapter shall not operate any principal or branch office of
a loan brokerage business without employing a licensed principal
manager at that location.
(c) The licensed principal manager employed at a principal or
branch office of a loan brokerage business shall supervise all
employees at that location. If a licensed mortgage loan originator
works from a location that is not a principal or branch office of a
loan brokerage business, the mortgage loan originator shall be
supervised by the principal manager employed at the principal or
branch office at which the mortgage loan originator's loan files are
sent.
(d) An individual that acts solely as a loan processor or
underwriter shall not represent to the public through:
(1) advertising; or
(2) 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 may or will perform mortgage loan origination
activities or otherwise act as a mortgage loan originator.
As added by P.L.230-2007, SEC.16. Amended by P.L.156-2009,
SEC.15.
IC 23-2-5-21 Version a
Academic instruction requirements
Note: This version of section effective until 1-1-2010. See also
following version of this section, effective 1-1-2010.
Sec. 21. (a) A person applying for an initial license or certificate
of registration must provide to the commissioner evidence that
during the twenty-four (24) month period immediately preceding the
application that the person completed at least twenty-four (24) hours
of academic instruction, acceptable to the commissioner, related to
the loan brokerage business. To maintain a license or registration
under this chapter, a person must provide to the commissioner
evidence that the person has completed at least six (6) hours of
academic instruction that is:
(1) acceptable to the commissioner; and
(2) related to the loan brokerage business;
during each calendar year after the year in which the license or
registration was initially issued.
(b) In determining the acceptability of academic instruction the
commissioner shall give consideration to approval of a licensee's
internal academic instruction programs completed by employees.
(c) In determining the acceptability of an education course, the
commissioner may require a fee, in an amount prescribed by the
commissioner by rule or order, for the commissioner's review of the
course.
As added by P.L.230-1999, SEC.13. Amended by P.L.230-2007,
SEC.17.
IC 23-2-5-21 Version b
Academic instruction requirements
Note: This version of section effective 1-1-2010. See also
preceding version of this section, effective until 1-1-2010.
Sec. 21. (a) A person applying for an initial license must provide
to the commissioner evidence that during the twenty-four (24) month
period immediately preceding the application that the person
completed at least twenty (20) hours of academic instruction,
acceptable to the commissioner and approved by the Nationwide
Mortgage Licensing System and Registry. The education hours
required under this subsection must include the following:
(1) Three (3) hours of federal law and regulations concerning
residential mortgage lending.
(2) Three (3) hours of ethics, including instruction on fraud,
consumer protection, and fair lending practices.
(3) Two (2) hours of training concerning lending standards for
nontraditional residential mortgage loan products.
(4) Two (2) hours of state law and rules concerning residential
mortgage lending.
(b) To maintain a license under this chapter, a person must
provide to the commissioner evidence that the person has completed
at least eight (8) hours of academic instruction that is acceptable to
the commissioner, and approved by the Nationwide Mortgage
Licensing System and Registry, during each calendar year after the
year in which the license was initially issued. The education hours
required under this subsection must include the following:
(1) Three (3) hours of federal law and regulations concerning
residential mortgage lending.
(2) Two (2) hours of ethics, including instruction on fraud,
consumer protection, and fair lending practices.
(3) Two (2) hours of training concerning lending standards for
nontraditional residential mortgage loan products.
(c) In determining the acceptability of academic instruction the
commissioner shall give consideration to approval of a licensee's
internal academic instruction programs completed by employees.
(d) In determining the acceptability of an education course, the
commissioner may require a fee, in an amount prescribed by the
commissioner by rule or order, for the commissioner's review of the
course.
As added by P.L.230-1999, SEC.13. Amended by P.L.230-2007,
SEC.17; P.L.156-2009, SEC.16.
IC 23-2-5-22 Version a
Appeals; service on commissioner; transcript
Note: This version of section effective until 1-1-2010. See also
following version of this section, effective 1-1-2010.
Sec. 22. (a) An appeal may be taken by:
(1) any person whose application for an initial or a renewal
license under this chapter is granted or denied, from any final
order of the commissioner concerning the application;
(2) any applicant for initial or renewed registration as a
principal manager or an originator, from any final order of the
commissioner affecting the application;
(3) any person against whom a civil penalty is imposed under
section 14(a) of this chapter, from the final order of the
commissioner imposing the civil penalty; or
(4) any person who is named as a respondent, from any final
order issued by the commissioner under section 10 or 11 of this
chapter;
IC 23-2-5-22 Version b
Appeals; service on commissioner; transcript
Note: This version of section effective 1-1-2010. See also
preceding version of this section, effective until 1-1-2010.
Sec. 22. (a) An appeal may be taken by:
(1) any person whose application for an initial or a renewal
license under this chapter is granted or denied, from any final
order of the commissioner concerning the application;
(2) any applicant for initial or renewed licensure as a principal
manager or a mortgage loan originator, from any final order of
the commissioner affecting the application;
(3) any person against whom a civil penalty is imposed under
section 14(a) of this chapter, from the final order of the
commissioner imposing the civil penalty; or
(4) any person who is named as a respondent, from any final
order issued by the commissioner under section 10 or 11 of this
chapter;
to the Marion circuit court or to the circuit or superior court of the
county where the person taking the appeal resides or maintains a
place of business.
(b) Not later than twenty (20) days after the entry of the order, the
commissioner shall be served with:
(1) a written notice of the appeal stating the court to which the
appeal will be taken and the grounds upon which a reversal of
the final order is sought;
(2) a demand in writing from the appellant for a certified
transcript of the record and of all papers on file in the
commissioner's office affecting or relating to the order; and
(3) a bond in the penal sum of five hundred dollars ($500) to the
state of Indiana with sufficient surety to be approved by the
commissioner, conditioned upon the faithful prosecution of the
appeal to final judgment and the payment of all costs that are
adjudged against the appellant.
(c) Not later than ten (10) days after the commissioner is served
with the items listed in subsection (b), the commissioner shall make,
certify, and deliver to the appellant the transcript, and the appellant
shall, not later than five (5) days after the date the appellant receives
the transcript, file the transcript and a copy of the notice of appeal
with the clerk of the court. The notice of appeal serves as the
appellant's complaint. The commissioner may appear and file any
motion or pleading and form the issue. The cause shall be entered on
the trial calendar for trial de novo and given precedence over all
matters pending in the court.
(d) The court shall receive and consider any pertinent oral or
written evidence concerning the order of the commissioner from
which the appeal is taken. If the order of the commissioner is
reversed, the court shall in its mandate specifically direct the
commissioner as to the commissioner's further action in the matter.
The commissioner is not barred from revoking or altering the order
for any proper cause that accrues or is discovered after the order is
entered. If the order is affirmed, the appellant is not barred after
thirty (30) days from the date the order is affirmed from filing a new
application if the application is not otherwise barred or limited.
During the pendency of the appeal, the order from which the appeal
is taken is not suspended but remains in effect unless otherwise
ordered by the court. An appeal may be taken from the judgment of
the court on the same terms and conditions as an appeal is taken in
civil actions.
As added by P.L.48-2006, SEC.9. Amended by P.L.145-2008,
SEC.19; P.L.156-2009, SEC.17.
IC 23-2-5-23 Version a
Documents; license or registration number required
Note: This version of section effective until 1-1-2010. See also
following version of this section, effective 1-1-2010.
Sec. 23. Any document delivered or required to be delivered by
a person licensed or required to be licensed to a borrower or
prospective borrower must contain:
(1) the license number of the loan broker; and
(2) the registration number of each:
(A) originator; or
(B) principal manager;
who had contact with the file.
As added by P.L.230-2007, SEC.18.
IC 23-2-5-23 Version b
Documents; license number required
Note: This version of section effective 1-1-2010. See also
preceding version of this section, effective until 1-1-2010.
Sec. 23. A loan broker agreement that is delivered or required to
be delivered by a person licensed or required to be licensed under
this chapter to a borrower or prospective borrower must contain:
(1) the license number of the loan broker; and
(2) the license number of each:
(A) mortgage loan originator; or
(B) principal manager;
who had contact with the file.
As added by P.L.230-2007, SEC.18. Amended by P.L.156-2009,
SEC.18.
IC 23-2-5-24
Cooperation with department of financial institutions
Sec. 24. In the securities divisions' investigative, examination, and
regulatory activities related to licensees under this article, the
securities division may cooperate with the Indiana department of
financial institutions in the regulation of a licensee that conducts:
(1) business under this article; and
(2) business that requires licensure under IC 24-4.4.
As added by P.L.156-2009, SEC.19.
IC 23-2-5-25
Reporting by commissioner
Sec. 25. Subject to IC 5-14-3, the commissioner is required to
regularly report:
(1) violations of this chapter; and
(2) enforcement actions and other relevant information;
IC 23-2-5-26
Process to challenge information reported
Sec. 26. The commissioner shall establish a process by which a
mortgage loan originator may challenge information entered into the
Nationwide Mortgage Licensing System and Registry by the
commissioner.
As added by P.L.156-2009, SEC.21.