State Rep. Woody Burton authored legislation regarding financial institutions and consumer credit, which passed the Indiana House of Representatives on Tuesday with a unanimous vote.
House Bill (HB) 1081 makes a variety of changes to current law concerning financial institutions: lien mortgage lenders, payday lenders, debt management companies, pawnbrokers, money transmitters and funeral trusts. This is known as an “omnibus bill” for the Indiana Department of Financial Institutions (DFI) because it deals with a number of diverse, unrelated topics.
“Many of the provisions and changes within this bill are made simply to conform to federal law and regulations,” said Rep. Burton. “These technical changes will be highly beneficial to the Indiana Department of Financial Institutions as they are in charge of supervising commercial banks, trust companies, private and savings banks, building and loan associations, credit unions and finance companies.”
This bill also includes language necessary to bring uniformity among the various licensing acts administered by the DFI. One highlight of this legislation is the provisions to update the Debt Management Act for companies that help Hoosiers manage their debts and finances. In regards to rental purchase agreements, the bill requires notification to the DFI of name or address changes, openings, closings or relocations of offices or stores, bankruptcies or reorganizations, or revocations or suspensions in other jurisdictions. Before appointing or hiring any director, executive director, executive officer or Indiana store manager, a lessor must also perform a background check on the candidate and retain records of the check until the department’s next examination.
“For the protection of all Hoosiers, it is important that we know candidates are qualified and clear of any criminal history in dealing with sensitive financial information,” said Rep. Burton.
Among their many responsibilities, the DFI also supervises pawnbrokers. This bill extends the application of the Pawnbrokers Act to transactions originated outside of Indiana given that the consumer is in Indiana when the transaction is originated. The pawnbroker must also have advertised or solicited the transaction by way of mail, brochure, telephone, print, radio, television, the Internet or electronic means.
In addition, the bill adds a provision that prohibits the use of misleading terms indicating that a business is a pawnbroker business when no license has been issued. For example, some businesses have advertised on the outside of their store with names such as NWAP, which is simply PAWN spelled backwards.
HB 1081 will move to the Senate for further discussion and debate. To stay up-to-date on this bill and any other piece of legislation in the General Assembly, visit www.in.gov/legislative.
