§ 24-9-5-5 — Unintentional or erroneous violations; corrections by creditors

(a) If the creditor or an assignee establishes by
a preponderance of evidence that a violation of this article is
unintentional or the result of a bona fide error of law or fact
notwithstanding the maintenance of procedures reasonably adopted to
avoid any such violation or error, the validity of the transaction is not
affected, and no liability is imposed under section 4 of this chapter
except in the case of a refusal to make a refund.
(b) Except as provided in subsection (c), a creditor in a high cost
home loan who in good faith fails to comply with this article is not
considered to have violated this article if the creditor does the
following before receiving notice of the failure from the borrower:
(1) Not later than ninety (90) days after the date of the loan
closing:
(A) makes appropriate restitution to the borrower of any
amounts collected in error; and
(B) takes necessary action to make all appropriate adjustments
to the loan to correct the error.
(2) Not later than one hundred twenty (120) days after the date of
the loan closing, notifies the borrower of:
(A) the error; and
(B) the amount of the required restitution or adjustment.
(c) Subsection (b) does not apply unless the creditor establishes that
the compliance failure was not intentional and resulted from a bona
fide error of fact or law, notwithstanding the maintenance of
procedures reasonably adopted to avoid the errors.

Legislative History

As added by P.L.73-2004, SEC.33.