§ 24-4.5-7-413 — Surety bond; requirements; amount; termination; liability; notices

Indiana § 24-4.5-7-413

• Jurisdiction: Indiana
• Art. 4.5: UNIFORM CONSUMER CREDIT CODE
• Ch. 7: Small Loans

Text

(1) A person engaged in making small
loans under this chapter shall post a bond to the department in the
amount of fifty thousand dollars ($50,000) for each location where
small loans will be made, up to a maximum bond in an amount
determined by the director.
(2) A surety bond issued under this section must:
(a) provide coverage for a lender engaged in making small loans
under this chapter in an amount as prescribed in subsection (1);
(b) be in a form prescribed by the director;
(c) be in effect during the term of the lender's license under this
chapter;
(d) subject to subsection (3), remain in effect during the two (2)
years after the lender's license under this chapter is surrendered
or terminated;
(e) be payable to the department for the benefit of:
(i) the state; and
(ii) individuals who reside in Indiana when they agree to
receive financial services from the lender;
(f) be issued by a bonding, surety, or insurance company
authorized to do business in Indiana and rated at least "A-" by at
least one (1) nationally recognized investment rating service; and
(g) have payment conditioned upon the lender's or any of the
lender's employees' or agents' noncompliance with or violation of
this article or other applicable federal or state laws or regulations.
(3) The director may adopt rules or guidance documents with
respect to the requirements for a surety bond as necessary to
accomplish the purposes of this chapter. Upon written request from a
lender, the director may, at the discretion of the director, waive or
shorten the two (2) year period set forth in subsection (2)(d) during
which a surety bond required by this section must remain in effect after
the lender's license under this chapter is surrendered or terminated.
(4) If the principal amount of a surety bond required under this
section is reduced by payment of a claim or judgment, the lender for
whom the bond is issued shall immediately notify the director of the
reduction and, not later than thirty (30) days after notice by the
director, file a new or an additional surety bond in an amount set by the
director. The amount of the new or additional bond set by the director
must be at least the amount of the bond before payment of the claim or
judgment.
(5) If for any reason a surety terminates a bond issued under this
section, the lender shall immediately notify the department and file a
new surety bond in an amount as prescribed in subsection (1).
(6) Cancellation of a surety bond issued under this section does not
affect any liability incurred or accrued during the period when the
surety bond was in effect.
(7) The director may obtain satisfaction from a surety bond issued
under this section if the director incurs expenses, issues a final order,
or recovers a final judgment under this chapter.
(8) Notices required under this section must be in writing and
delivered by certified mail, return receipt requested and postage
prepaid, or by overnight delivery using a nationally recognized carrier.

Legislative History

As added by P.L.38-2002, SEC.1. Amended by P.L.258-2003, SEC.3; P.L.35-2010, SEC.87; P.L.216-2013, SEC.14; P.L.129-2020, SEC.8.