§ 28-11-3-1 — Examination of financial institutions; independent audit; report of condition; data processing services; use of report by Federal Home Loan Bank; unauthorized actions concerning reports; examination of vendors

Indiana § 28-11-3-1

• Jurisdiction: Indiana
• Art. 11: DEPARTMENT OF FINANCIAL INSTITUTIONS
• Ch. 3: Supervision of Financial Institutions

Text

(a) The department shall examine the affairs of
every financial institution as often as the department considers
necessary. Examinations may be made without notice to the institution
to be examined.
(b) In making an examination, the department may examine any of
the officers or agents of the institution under oath.
(c) The department may require an independent audit by a certified
public accountant, subject to the standards the department determines.
(d) The department, in the classification of assets, may disregard the
amount of an asset in its analysis of capital adequacy of the financial
institution until the amount of the asset is recovered.
(e) After the examiners complete the examination of a financial
institution, the examiners:
(1) shall submit their written findings and recommendations to:
(A) the board of directors;
(B) other parties authorized by the board of directors and
approved by the director; and
(C) in the case of a credit union, the supervisory committee of
the credit union, in addition to the parties set forth in clauses
(A) and (B); and
(2) may confer with the parties listed in subdivision (1) on the
findings and recommendations.
(f) Upon the conclusion of an examination, a full, true, and detailed
report of the condition of the financial institution shall be made to the
department by the examiners in the form prescribed by the department.
(g) A financial institution subject to examination by the department
may not cause, by contract or otherwise, any data processing or other
similar service to be performed, either on or off its premises, until
written assurances are furnished to the department by the financial
institution and the entity providing the service that the performance of
the service will be subject to regulation and examination by the
department to the same extent as if the service were being performed
by the financial institution on its own premises. Entities that provide
data processing or other similar services to more than one (1) financial
institution need only file one (1) written assurance to cover all financial
institutions to which the entity provides services.
(h) The report of an examination conducted under this section:
(1) is the exclusive property of the department; and
(2) except as provided in subsection (i), shall not be distributed,
published, or duplicated without the prior authorization of the
director.
(i) A financial institution that is or seeks to become a member of the
Federal Home Loan Bank System may provide a copy of a report of an
examination conducted by the department to the Federal Home Loan
Bank for the confidential use of the Federal Home Loan Bank if the
director and the Federal Home Loan Bank have entered into a written
agreement that provides that the report of the examination:
(1) remains the property of the department; and
(2) is not:
(A) subject to inspection under IC 5-14-3;
(B) subject to subpoena;
(C) subject to discovery; or
(D) admissible in evidence in any civil action.
(j) Except as provided in subsection (i), a person who knowingly or
intentionally possesses, distributes, publishes, or duplicates a report of
an examination conducted under this section without the prior
authorization of the director commits a Class B misdemeanor.
(k) If a financial institution contracts with an outside vendor to
provide a service that would otherwise be undertaken internally by the
financial institution and be subject to the department's routine
examination procedures, the person that provides the service to the
financial institution shall, at the request of the director, submit to an
examination by the department. If the director determines that an
examination under this subsection is necessary or desirable, the
examination may be made at the expense of the person to be examined.
If the person to be examined under this subsection refuses to permit the
examination to be made, the director may order any financial institution
that receives services from the person refusing the examination to:
(1) discontinue receiving one (1) or more services from the
person; or
(2) otherwise cease conducting business with the person.

Legislative History

As added by P.L.33-1991, SEC.56. Amended by P.L.262-1995, SEC.75; P.L.90-2008, SEC.69; P.L.35-2010, SEC.196; P.L.159-2017, SEC.54.