This week is the final week for bills to be considered in committees. Bills that are going to be eligible for consideration for the remainder of session must pass the committee they were assigned to by the committee report deadline this Thursday. With the committee process winding down, the focus will shift to considering bills on second and third reading. After this week, there will only be two weeks left to amend and pass any bill that will make it to the Governor’s desk to be signed. With the previous months of work culminating in the final three weeks, the IMBA Legislative Team is staying focused on the remaining key issues that impact our industry. Below are key issues that will see action in the coming weeks.
BILLS TO WATCH
SB 50 – Various Trust and Probate Issues
Sen. Aaron Freeman (R-Indianapolis)
Rep. Jerry Torr (R-Carmel)
Why it matters
SB 50 was refined and crafted during the interim study committee process last summer through committee deliberation and testimony from various industries. The IMBA Legislative Team worked to keep out of the bill a harmful forced foreclosure proposal that would require a mortgage holder to file a foreclosure on a property in probate if the heir to the property requested it. SB 50 also includes provisions that amend the legacy trust statute that was passed into law during the 2019 legislative session. The amendments clarify that only the lender that relied upon the assets listed on a financial statement when extending credit is able to proceed against those assets in the event of a default. Other changes include various changes to trust and probate laws concerning proof of title affidavits, small estate affidavits, execution of a trust by a third party, silent trusts and nonjudicial settlements of accounts.
The bill is scheduled for a third reading vote in the House today.
SB 395 – Uniform Consumer Credit Code
Sen. Eric Bassler (R-Washington)Rep. Woody Burton (R-Whiteland)
Why it matters
This bill originated from recommendations made by the Financial Institutions Study Committee last summer. The IMBA provided suggested changes to the Uniform Consumer Credit Code for purposes of reforming the antiquated uniform law. The bill was amended in the Senate Insurance and Financial Institutions Committee with several significant changes, however. Most notably, the bill still attempts to fix the problematic refundable calculation of the prepaid/origination fee by establishing a flat origination fee/prepaid finance charge of no more than $75 for a consumer loan under $2,000, $150 for a consumer loan between $2,000 and $4,000, and $250 for a consumer loan over $4,000. The bill also raised the state usury rate from 25% to 36% but was amended to keep the rate at 25%. The bill was amended to remove several provisions about which the IMBA expressed concern, but still contains several items that are in need of additional work. The IMBA is continuing to work on addressing those issues.
The bill was heard in the House Financial Institutions Committee on Feb. 18 and was held for further consideration until Feb. 25. The committee will consider amendments to the bill on Feb. 25, and the IMBA Legislative Team will be tracking those amendments very closely.
HB 1109 – Telephone Solicitation and Consumer Credit
Rep. Matt Lehman (R-Berne)
Sen. Greg Walker (R-Columbus)
Why it matters
The IMBA supports HB 1109 as this legislation fixes two issues from the passage of last session’s HEA 1123 and HEA 1668. HEA 1123 inadvertently expanded the registration requirement for telephone solicitation to any business in the state of Indiana using the telephone to solicit business. The registration requirement is burdensome and comes with private right of action if not implemented properly. The IMBA sought this clarification to ensure financial institutions are not required to register with the attorney general’s office.
Additionally, the IMBA worked with lawmakers to amend HB 1109 to fix an issue lenders are dealing with when trying to pull a credit report on a customer and are returned an error message because of misinformation. HEA 1668, which passed in 2019, changed this process and took away the ability from lenders to do their own customer due diligence.
The bill is scheduled to be voted on for a final time in the Senate today.
HB 1191 – Land Contracts
Rep. Ed Clere (R-New Albany)
Sen. Jon Ford (R-Terre Haute)
Why it matters
The bill aims to place greater regulations on land contracts for purposes of businesses that engage in more than four land contracts at once. Exempted from the application of these new regulations are depository institutions, first lien mortgage lenders and subsidiaries of a first lien mortgage lender.
The bill passed the House by a vote of 84-9 on third reading and has yet to be given a committee hearing in the Senate.
HB 1353 – Financial Institutions and Consumer Credit
Rep. Woody Burton (R-Whiteland)
Sen. Eric Bassler (R-Washington)
Why it matters
The IMBA supports HB 1353, which is the annual bill from the Department of Financial Institutions. Every year, the DFI has an agency bill that cleans up portions of the code that it identifies as needing to be updated. The IMBA has reviewed the bill and supports the changes. There is one section of the bill that the IMBA sought clarification to fix the issue of which delinquency charge may be assessed. Last session the permissible delinquency charge was set in statute at $25 through the passage of HEA 1136. There was some confusion within contracts whether the delinquency share should be $25 or the former indexed rate according to the Consumer Price Index. The IMBA worked with legislators to clarify this inconsistency.
The bill was heard in the Senate Insurance and Financial Institutions Committee on Feb. 18 to consider an amendment and was held for further consideration until Feb. 26.