Indiana State Legislative Update January 28, 2020

January 28, 2020 2:33 PM | Anonymous member (Administrator)

STATEHOUSE SUMMARY

There are only a few days left for committees to consider bills before the committee report deadline. Committee work will conclude for the first half of session on Thursday. For a bill to be eligible for consideration by the General Assembly, it will have to pass committee by this deadline. This week sets up the remainder of session and narrows the scope of legislation that will be eligible for consideration in 2020.


BILLS TO WATCH

SB 100 – Nonconforming Structures

Sen. Blake Doriot (R-Syracuse)

Why it matters
The IMBA supports SB 100, which allows a parcel owner to reconstruct, repair, or renovate the nonconforming structure if the reconstruction, repairment, or renovation meets certain requirements. Because of the change in zoning laws, structures must conform to new standards after a casualty loss, which puts both the owner and the lien holder at additional risk.

Latest action
The bill passed the Senate by a vote of 47-0 and is now eligible for consideration by the House.


SB 327 – Reporting of Consumer Loans by Unlicensed Lenders

Sen. Andy Zay (R-Huntington)

Why it matters

The bill requires the reporting of base level consumer loan information to a private reporting agency approved by the Department of Financial Institutions under Chapter 7 (the payday lending section of the code). There is currently only one vendor approved by the department under Chapter 7. The requirement would apply to all lenders, both domiciled in state and out-of-state. Per IMBA conversations about the bill, this is an unintended consequence of the drafting of the bill. The IMBA is concerned about the new burdens this bill places on lenders and is working to address those concerns.

Latest action

This bill was heard in the Senate Insurance and Financial Institutions Committee on Jan. 22 and will be heard again Wednesday to consider amendments and for a committee vote.


SB 395 – Uniform Consumer Credit Code

Sen. Eric Bassler (R-Washington)

Why it matters

This bill originated from recommendations made by the Financial Institutions Study Committee last summer. The IMBA provided suggested changes UCCC for purposes of reforming the antiquated uniform law. The bill incorporates three recommendations from the IMBA. Most notably, the bill attempts to fix the problematic refundable calculation of the prepaid/origination fee. The bill also raises the state usury rate from 25% to 36%. The bill does have several sections that are concerning, and the IMBA Legislative Team is currently working with lawmakers to address those issues.

Latest action

This bill was heard in the Senate Insurance and Financial Institutions Committee on Jan. 22 and will be heard again Wednesday to consider amendments and for a committee vote.


SB 407 – Consumer Credit Transactions

Sen. Greg Walker (R-Columbus)

Why it matters

The IMBA has concerns with SB 407 as it would require all lenders doing business in Indiana to adhere to the Uniform Consumer Credit Code whether or not they are domiciled in Indiana. Currently, national banks are governed by federal laws specific to consumer loans, and the IMBA is concerned that this bill would have unintended consequences of requiring them to adhere to the UCCC. Additionally, the bill prohibits a lender from assessing the authorized nonrefundable prepaid finance charge on the second or any subsequent refinancing of a consumer loan made to a borrower by the lender. The IMBA is concerned about the new burdens this bill places on lenders and is working to address those concerns.

Latest action

The bill was assigned to the Senate Insurance and Financial Institutions Committee and is scheduled for a hearing on Jan. 29.


HB 1109 – Telephone Solicitation and Consumer Credit
Rep. Matt Lehman (R-Berne)

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 the 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.

Latest action

The bill passed the House by a vote of 95-0 and is now eligible for consideration by the Senate.


HB 1154 – Septic System Inspection Before Property Transfer
Rep. Mike Aylesworth (R-Hebron)

Why it matters

HB 1154 would require a septic system to be inspected and mitigated to certain standards before a transfer of deed can be executed. The IMBA has concerns with HB 1154 because of the potential for property transfers to be delayed or halted outright because of this additional regulation. Buyers have the option of inspecting septic and well systems currently, should they choose.

Latest action

The bill was assigned to the House Environmental Affairs Committee and has not been scheduled for a hearing.


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