§ 24-4.5-2-202 — Permitted additional charges; skip-a-payment services; expedited payment services; GAP agreements

(1) In addition to the credit service charge
permitted by this chapter, a seller may contract for and receive any of
the following additional charges in connection with a consumer credit
sale:
(a) Official fees and taxes.
(b) Charges for insurance as described in subsection (2).
(c) Notwithstanding provisions of the Consumer Credit Protection
Act (15 U.S.C. 1601 et seq.) concerning disclosure, charges for
other benefits, including insurance, conferred on the consumer, if
the benefits are of value to the consumer and if the charges are
reasonable in relation to the benefits, and are excluded as
permissible additional charges from the credit service charge. With
respect to any additional charge not specifically provided for in
this section, to be a permitted charge under this subsection the
seller must submit a written explanation of the charge to the
department indicating how the charge would be assessed and the
value or benefit to the consumer. Supporting documents may be
required by the department. The department shall determine
whether the charge would be of benefit to the consumer and is
reasonable in relation to the benefits.
(d) A charge not to exceed twenty-five dollars ($25) for each
returned payment by a bank or other depository institution of a
dishonored check, electronic funds transfer, negotiable order of
withdrawal, or share draft issued by the consumer.
(e) Annual participation fees assessed in connection with a
revolving charge account. Annual participation fees must:
(i) be reasonable in amount;
(ii) bear a reasonable relationship to the seller's costs to maintain
and monitor the charge account; and
(iii) not be assessed for the purpose of circumvention or evasion
of this article, as determined by the department.
(f) A charge not to exceed twenty-five dollars ($25) for a
skip-a-payment service, subject to the following:
(i) At the time of use of the service, the consumer must be given
written notice of the amount of the charge and must
acknowledge the amount in writing, including by electronic
signature.
(ii) A charge for a skip-a-payment service may not be assessed
with respect to a consumer credit sale subject to the provisions
on rebate upon prepayment that are set forth in section 210 of
this chapter.
(iii) A charge for a skip-a-payment service may not be assessed
with respect to any payment for which a delinquency charge has
been assessed under section 203.5 of this chapter.
(g) A charge not to exceed ten dollars ($10) for an optional
expedited payment service, subject to the following:
(i) The charge may be assessed only upon request by the
consumer to use the expedited payment service.
(ii) The amount of the charge must be disclosed to the consumer
at the time of the consumer's request to use the expedited
payment service.
(iii) The consumer must be informed that the consumer retains
the option to make a payment by traditional means.
(iv) The charge may not be established in advance, through any
agreement with the consumer, as the expected method of
payment.
(v) The charge may not be assessed with respect to any payment
for which a delinquency charge has been assessed under section
203.5 of this chapter.
(h) A charge for a GAP agreement, subject to subsection (4).
(2) An additional charge may be made for insurance written in
connection with the sale, other than insurance protecting the seller
against the consumer's default or other credit loss:
(a) with respect to insurance against loss of or damage to property,
or against liability, if the seller furnishes a clear and specific
statement in writing to the consumer, setting forth the cost of the
insurance if obtained from or through the seller and stating that the
consumer may choose the person, subject to the seller's reasonable
approval, through whom the insurance is to be obtained; and
(b) with respect to consumer credit insurance providing life,
accident, unemployment or other loss of income, or health
coverage, if the insurance coverage is not a factor in the approval
by the seller of the extension of credit and is clearly disclosed in
writing to the consumer, and if, in order to obtain the insurance in
connection with the extension of credit, the consumer gives
specific, affirmative, written indication of the desire to do so after
written disclosure of the cost.
(3) With respect to a subordinate lien mortgage transaction, the
following closing costs, if the costs are bona fide, reasonable in
amount, and not for the purpose of circumvention or evasion of this
article:
(a) fees for title examination, abstract of title, title insurance,
property surveys, or similar purposes;
(b) fees for preparing deeds, mortgages, and reconveyance,
settlement, and similar documents;
(c) notary and credit report fees;
(d) amounts required to be paid into escrow or trustee accounts if
the amounts would not otherwise be included in the credit service
charge; and
(e) appraisal fees.
(4) An additional charge may be made for a GAP agreement, subject
to the following:
(a) A GAP agreement or GAP coverage may not be required by the
seller, and that fact must be disclosed in writing to the consumer.
(b) The charge for the initial term of coverage under the GAP
agreement must be disclosed in writing to the consumer. The
charge may be disclosed on a unit-cost basis only in the case of the
following transactions:
(i) Revolving charge accounts.
(ii) Closed-end credit transactions, if the request for coverage is
made by mail or telephone.
(iii) Closed-end credit transactions, if the GAP agreement limits
the total amount of indebtedness eligible for coverage.
(c) If the term of coverage under the GAP agreement is less than
the term of the consumer credit sale, the term of coverage under
the GAP agreement must be disclosed in writing to the consumer.
(d) The consumer must sign or initial an affirmative written request
for coverage after receiving all required disclosures.
(e) The GAP agreement must include the following:
(i) In the case of GAP coverage for a new motor vehicle, the
manufacturer's suggested retail price (MSRP) for the motor
vehicle.
(ii) In the case of GAP coverage for a used motor vehicle, the
average retail value for the motor vehicle, as determined by use
of a third party valuation service provider that is customarily
relied upon in the used motor vehicle commercial marketplace.
(iii) The name of the financing entity taking assignment of the
agreement.
(iv) The name and address of the consumer.
(v) The name of the creditor selling the agreement.
(vi) Information advising the consumer that the consumer may
be able to obtain similar coverage from the consumer's primary
insurance carrier.
(vii) A coverage provision that includes a minimum deductible
of five hundred dollars ($500).
(viii) A provision providing for a minimum thirty (30) day
free-look period.
(ix) In the case of a consumer credit sale involving a motor
vehicle, a provision excluding the sale of GAP coverage if the
amount financed under the consumer credit sale (not including
the cost of the GAP agreement, the cost of any credit insurance,
and the cost of any warranties or service agreements) is less than
eighty percent (80%) of the manufacturer's suggested retail price
(MSRP), in the case of a new motor vehicle, or the average retail
value (as determined by use of a third party valuation service
provider that is customarily relied upon in the used motor
vehicle commercial marketplace), in the case of a used motor
vehicle.
(x) In the case of a GAP agreement in which the charge for the
agreement exceeds four hundred dollars ($400), specific
instructions that may be used by the consumer to cancel the
agreement and obtain a refund of the unearned GAP charge
before prepayment in full, in accordance with the procedures,
and subject to the conditions, set forth in subdivision (f).
(f) If the charge for the GAP agreement exceeds four hundred
dollars ($400), the consumer is entitled to cancel the agreement
and obtain a refund of the unearned GAP charge before
prepayment in full. Refunds of unearned GAP charges shall be
made subject to the following conditions:
(i) A refund of the charge for a GAP agreement must be
calculated using a method that is no less favorable to the
consumer than a refund calculated on a pro rata basis.
(ii) The consumer is entitled to a refund of the unearned GAP
agreement charge as outlined in the GAP agreement.
(iii) The seller of the GAP agreement is responsible for making
a timely refund to the consumer of unearned GAP agreement
charges under the terms and conditions of the GAP agreement.
(g) Upon prepayment in full of the consumer credit sale:
(i) the GAP coverage is automatically terminated; and
(ii) the seller of the GAP agreement must issue a refund in
accordance with subdivision (f).
(h) A creditor that sells GAP agreements must:
(i) insure its GAP agreement obligations under a contractual
liability insurance policy issued by an insurer authorized to
engage in the insurance business in Indiana; and
(ii) retain appropriate records, as required under this article,
regarding GAP agreements sold, refunded, and expired.
(5) As used in this section, "expedited payment service" means a
service offered to a consumer to ensure that a payment made by the
consumer with respect to a consumer credit sale will be reflected as
paid and posted on an expedited basis.
(6) As used in this section:
(a) "guaranteed asset protection agreement";
(b) "guaranteed auto protection agreement"; or
(c) "GAP agreement";
means, with respect to consumer credit sales involving motor vehicles
or other titled assets, an agreement in which the seller agrees to cancel
or waive all or part of the outstanding debt after all property insurance
benefits have been exhausted after the occurrence of a specified event.
(7) As used in this section, "skip-a-payment service" means a service
that:
(a) is offered by a creditor to a consumer; and
(b) permits the consumer to miss or skip a payment due under a
consumer credit sale without resulting in default.
Formerly: Acts 1971, P.L.366, SEC.3. As amended by
P.L.247-1983, SEC.5; P.L.181-1991, SEC.1; P.L.14-1992, SEC.16;
P.L.122-1994, SEC.12; P.L.45-1995, SEC.4; P.L.80-1998, SEC.5;
P.L.213-2007, SEC.7; P.L.217-2007, SEC.6; P.L.35-2010, SEC.43;
P.L.89-2011, SEC.14; P.L.159-2017, SEC.8; P.L.69-2018, SEC.14;
P.L.29-2022, SEC.3.