§ 24-4.4-2-404.1 — Violations by individuals; persons convicted of felonies; civil penalties; creditor's duty to notify department of discharge or termination

Indiana § 24-4.4-2-404.1

• Jurisdiction: Indiana
• Art. 4.4: FIRST LIEN MORTGAGE LENDING
• Ch. 2: Miscellaneous

Text

1. (1) If the director determines that a
current or former director, an officer, or a manager of a creditor:
(a) has committed a violation of a statute, a rule, a final cease and
desist order, any condition imposed in writing by the director in
connection with the granting of any application or other request
by the creditor, or any written agreement between the creditor and
the director or the department;
(b) has committed fraudulent or unconscionable conduct; or
(c) has been convicted of a felony under the laws of Indiana or
any other jurisdiction;
the director, subject to subsection (2), may issue and serve upon the
officer, director, or manager a notice of the director's intent to issue an
order removing the person from the person's office or employment, an
order prohibiting any participation by the person in the conduct of the
affairs of any creditor, or an order both removing the person and
prohibiting the person's participation.
(2) A violation, practice, or breach specified in subsection (1) is
subject to the authority of the director under subsections (1) and (3) if
the director finds any of the following:
(a) The interests of the creditor's customers could be seriously
prejudiced by reason of the violation or practice.
(b) The violation, practice, or breach involves an act of fraud,
dishonesty, theft, breach of trust, money laundering, or the
wrongful taking of property on the part of the officer, director, or
manager involved.
(c) The violation, practice, or breach demonstrates a willful or
continuing disregard by the officer, director, or manager for state
and federal laws and regulations, and for the consumer
protections contained in this article.
(3) A person who has been convicted of a felony under the laws of
Indiana or any other jurisdiction may not serve as an officer, a director,
or a manager of a creditor, or serve in any similar capacity, unless the
person obtains the written consent of the director.
(4) A creditor that willfully permits a person to serve the creditor in
violation of subsection (3) is subject to a civil penalty of five hundred
dollars ($500) for each day the violation continues.
(5) A creditor shall give the department written notice of the
resignation, discharge, or termination of an employee, independent
contractor, or agent against whom allegations were made that accused
the employee, independent contractor, or agent of:
(a) violating this article or other laws, regulations, rules, or
industry standards of conduct applicable to first lien mortgage
transactions; or
(b) fraud, dishonesty, theft, breach of trust, money laundering, or
the wrongful taking of property.
The creditor shall provide the department the notice required under this
subsection not later than thirty (30) days after the effective date of the
resignation, discharge, or termination.

Legislative History

As added by P.L.35-2010, SEC.19. Amended by P.L.27-2012, SEC.11; P.L.176-2019, SEC.5.