§ 28-1-11-3.1 — Powers necessary and usual in carrying on banking business; enumerated powers; application of rules

Indiana § 28-1-11-3.1

• Jurisdiction: Indiana
• Art. 1: DEPARTMENT OF FINANCIAL INSTITUTIONS
• Ch. 11: Powers of Banks and Trust Companies

Text

1. (a) Any bank or trust company shall have
the power to discount, negotiate, sell and guarantee promissory notes,
bonds, drafts, acceptances, bills of exchange, and other evidences of
debt; to buy and sell, exchange, coin and bullion; to loan money; to
borrow money and to issue its notes, bonds, or debentures to evidence
any such borrowing and to mortgage, pledge, or hypothecate any of its
assets to secure the repayment thereof; to receive savings deposits and
deposits of money subject to check, and deposits of securities or other
personal property from any person or corporation, upon such terms as
may be agreed upon by the parties; to contract for and receive on loans
and discounts the highest rate of interest allowed by the laws of this
state to be contracted for and received by individuals; to accept, for
payment at a future date, drafts drawn upon it by its customers and to
issue letters of credit authorizing the holders thereof to draw drafts
upon it or its correspondents at sight or on time, however, the letter of
credit must state a specific expiration date; and to exercise all the
powers incidental and proper or which may be necessary and usual in
carrying on a general banking business, but it shall have no right to
issue bills to circulate as money.
(b) Subject to such regulations, rules, policies, and guidance as the
department finds to be necessary and proper, any bank or trust
company shall have the following powers:
(1) To make such loans and advances of credit and purchases of
obligations representing loans and advances of credit as are
eligible for insurance by the federal housing administrator, and to
obtain such insurance.
(2) To make such loans secured by mortgages on real property or
leasehold, as the federal housing administrator insures or makes
a commitment to insure, and to obtain such insurance.
(3) To purchase, invest in, and dispose of notes or bonds secured
by mortgage or trust deed insured by the federal housing
administrator or debentures issued by the federal housing
administrator, or bonds or other securities issued by national
mortgage associations.
(4) To extend credit to any state agency, with the approval of the
department, notwithstanding any other provisions or limitations
of IC 28-1. No law of this state prescribing the nature, amount, or
form of security or requiring security upon which loans or
advances of credit may be made, or prescribing or limiting
interest rates upon loans or advances of credit, or prescribing or
limiting the period for which loans or advances of credit may be
made, shall be deemed to apply to loans, advances of credit, or
purchases made pursuant to subdivisions (1), (2), and (3) and this
subdivision.
(5) To purchase, take, hold, and dispose of notes, and mortgages
securing such notes, made to any joint stock land bank heretofore
incorporated, in any case in which not less than ninety-nine
percent (99%) of the stock of said joint stock land bank is owned
by the bank or trust company at the time such notes or mortgages
be acquired by the bank or trust company; and upon dissolution
of any such joint stock land bank, or at any stage in the process of
such dissolution, any bank or trust company then owning not less
than ninety-nine percent (99%) of the stock of such joint stock
land bank may take, hold, and dispose of any notes, mortgages, or
other assets of such joint stock land bank of whatsoever nature,
including real estate, wheresoever situated, which such joint stock
land bank shall assign, transfer, convey, or otherwise make over
to such bank or trust company by way of final or partial
distribution of its assets to its stockholders upon such dissolution
or in connection with the process of such dissolution. No law of
this state prescribing the nature, amount, location, or form of
security, or requiring security upon which loans or advances of
credit may be made, or prescribing or limiting interest rates upon
loans or advances of credit, or prescribing or limiting the period
for which loan or advances of credit may be made, or prescribing
any ratio between the amount of any loan and the appraised value
of the security for such loan, or requiring periodical reductions of
the principal of any loan, shall be deemed to apply to loans, notes,
mortgages, real estate, or other assets mentioned in this
subdivision.
(6) To adopt stock purchase programs for employees and to grant
options to purchase, and to issue and sell, shares of its capital
stock to its employees, or to a trustee on their behalf (which may
be the bank or trust company issuing such capital stock), without
first offering the same to its shareholders, for such consideration,
not less than par value, and upon such terms and conditions as
shall be approved by its board of directors and by the holders of
a majority of its shares entitled to vote with respect thereto, and
by the department. In the absence of actual fraud in the
transaction, the judgment of the directors as to the consideration
for the issuances of such options and the sufficiency thereof shall
be conclusive. Any bank or trust company exercising the powers
granted in this subsection may, to the extent approved by the
department, have authorized and unissued stock required to fulfill
any stock option or other arrangement authorized herein.
(7) Subject to such restrictions as the department may impose, to
become the owner or lessor of personal or real property acquired
upon the request and for the use of a customer and to incur such
additional obligations as may be incident to becoming an owner
or lessor of such property.
(8) To purchase or construct buildings and hold legal title thereto
to be leased to municipal corporations or other public authorities,
for public purposes, having resources sufficient to make payment
of all rentals as they become due. Each lease agreement shall
provide that upon expiration, the lessee will become the owner of
the building.
(8.1) To purchase, hold, and convey real estate in accordance with
section 5 of this chapter.
(9) Subject to section 3.2 of this chapter, to exercise the rights and
privileges (as defined in section 3.2(a) of this chapter) that are or
may be granted to national banks domiciled in Indiana.
(10) Pursuant to its lending authority, to engage directly or
indirectly in any tax equity finance transaction permissible for a
national bank or federal savings association under 12 CFR
7.1025. The authority to engage in tax equity finance transactions
under this subdivision is separate from, and does not limit, any
investment authorities available to a bank or trust company. A tax
equity finance transaction is subject to the substantive legal
requirements of a loan, including, without limitation, IC 28-1-13.
(c) Any rule made and promulgated under and pursuant to this
section may apply to one (1) or more banks or trust companies or to one
(1) or more localities in the state as the department, in its discretion,
may determine.
As added by Acts 1980, P.L.40, SEC.7. Amended by
P.L.33-1991, SEC.14; P.L.14-1992, SEC.81; P.L.136-1994, SEC.2;
P.L.176-1996, SEC.11; P.L.194-1997, SEC.1; P.L.215-1999, SEC.2;
P.L.10-2006, SEC.30 and P.L.57-2006, SEC.30; P.L.213-2007,
SEC.38; P.L.217-2007, SEC.36; P.L.35-2010, SEC.116; P.L.27-2012,
SEC.50; P.L.73-2016, SEC.17; P.L.31-2022, SEC.1.