Indiana Modifies Provisions Regarding Uniform Consumer Credit Code (UCCC)
The state of Indiana modified multiple provisions under House Bill 1447 that include its Uniform Consumer Credit Code as well as First Lien Mortgage Lending. These provisions are effective on July 1, 2019.
The amendment provides that the department of financial institutions (“department”) may not issue or renew a person’s license to engage in first lien mortgage transactions or to make consumer loans if the department of state revenue notifies the department that a person is on the most recent tax warrant list until the person provides to the department a statement from the department of state revenue that the person’s tax warrant has been satisfied; or the department receives a notice from the commissioner of the department of state revenue.
Notices made by a person licensed under the UCCC must be in writing and submitted through the NMLSR or any other electronic registration system that may be approved by the director of the department of financial institution.
The amendment makes changes to the rental purchase agreement provisions by prohibiting leasing of, and rental purchase agreements involving, live domestic animals. It adds an new section defining “Initial rental payment” to mean “any up-front payment: (i) that is made by a lessee to a lessor, or to an agent acting on behalf of a lessor, for property under a rental purchase agreement; (ii) that includes a rental payment that permits the lessee’s use of the property for the initial rental period; (iii) that may be in an amount that is larger than a regular rental payment due under the rental purchase agreement; and (iv) that may include one or more of the following: (a) an amount intended to be paid toward the rental or ownership of the property that is the subject of the rental purchase agreement, (b) additional charges permitted under IC 24-7-5; (v) a security deposit.”
The amendment also defines “regular rental payment” to mean “a periodic payment in a fixed amount that permits a lessee’s use of property under a rental purchase agreement for a specific time after the initial rental period.”
The amendment provides that the lessor should furnish the lessee with the copy of the written and signed rental purchase agreement at the time of consummation of the agreement. Current law provides that a copy of the rental purchase agreement should be provided before any regular rental payment is due under the rental purchase agreement.
The amendment repeals several provisions that include: (a) rental purchase agreements provisions specifying that any up-front payment made by the lessee: (i) must be treated as an initial rental payment; (ii) is subject to the disclosure requirements under the statute; and (iii) may be in a sum larger than a regular rental payment; (b) provisions in the UCCC that provide that civil proceeding advance payment transactions (CPAP) are subject to the UCCC; (c) all provisions concerning CPAP transactions and provisions in the UCCC that define certain terms relating to CPAP transactions.
The amendment also authorizes the director to designate the NMLSR to serve as the sole entity responsible for processing applications and renewals for license; issuing unique identifiers for licensee; and performing other services that the director determines are necessary for the orderly administration of the department’s licensing system.
Rhona Kyeyune, LLM, is a regulatory compliance consultant with CLA. She is a graduate of Makerere University and earned her master of laws at Boston University School of Law.
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