§ 28-11-3-6 — Federal preemption; exemption of state chartered entities and subsidiaries from provisions of state law

Indiana § 28-11-3-6

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

Text

(a) As used in this section:
(1) "federally chartered" means an entity organized or reorganized
under the law of the United States; and
(2) "state chartered" means an entity organized or reorganized
under the law of Indiana or another state.
(b) If the department determines that federal law has preempted a
provision of IC 24, IC 26, IC 28, IC 29, or IC 30, the provision of IC 24, IC 26, IC 28, IC 29, or IC 30 applies to a state chartered entity only
to the same extent that the department determines the provision is
applicable to the:
(1) same; or
(2) functionally equivalent;
type of federally chartered entity.
(c) A state chartered entity seeking an exemption from a provision
of IC 24, IC 26, IC 28, IC 29, or IC 30 based on the preemption of the
provision as applied to a federally chartered entity shall submit a letter
to the department:
(1) describing in detail; and
(2) documenting the federal preemption of;
the provisions from which it seeks exemption. If available, copies of
relevant federal law, regulations, and interpretive letters must be
attached to the letter submitted by the requesting entity.
(d) The department shall notify the requesting entity of the
department's receipt of the request not later than ten (10) business days
after the department's receipt of a letter described in subsection (c).
Except as provided in subsection (e), upon receipt of the notification,
the requesting entity may operate as if it is exempt from the provision
of IC 24, IC 26, IC 28, IC 29, or IC 30 ninety (90) days after the date
on which the department receives the letter, unless otherwise notified
by the department. This period may be extended for an additional
ninety (90) days if the department determines that the requesting
entity's letter raises issues requiring additional information or
additional time for analysis. If the department extends the period for
the department's review of the request, the requesting entity may
operate as if the requesting entity is exempt from a provision of IC 24,
IC 26, IC 28, IC 29, or IC 30 during the extended period of review only
if the requesting entity receives prior written approval from the
department. However:
(1) the department must:
(A) approve or deny the requested exemption; or
(B) convene a hearing;
not later than ninety (90) days after the department receives the
requesting entity's letter, unless the department has extended the
period for the department's review under this subsection; and
(2) if a hearing is convened, the department must approve or deny
the requested exemption not later than ninety (90) days after the
hearing is concluded.
(e) The department may refuse to exempt a requesting entity from
a provision of IC 24, IC 26, IC 28, IC 29, or IC 30 if the department
finds that any of the following conditions apply:
(1) The department determines that a described provision of IC 24, IC 26, IC 28, IC 29, or IC 30 is not preempted for a federally
chartered entity of the:
(A) same; or
(B) functionally equivalent;
type.
(2) The extension of the federal preemption in the form of an
exemption from a provision of IC 24, IC 26, IC 28, IC 29, or IC 30 to the requesting entity would:
(A) adversely affect the safety and soundness of the requesting
entity; or
(B) result in an unacceptable curtailment of consumer
protection provisions.
(3) The failure of the department to provide for the exemption
from a provision of IC 24, IC 26, IC 28, IC 29, or IC 30 will not
result in a competitive disadvantage to the requesting entity.
(f) The operation of a financial institution in a manner consistent
with exemption from a provision of IC 24, IC 26, IC 28, IC 29, or IC 30
under this section is not a violation of any provision of the Indiana
Code or rules adopted under IC 4-22-2.
(g) If a financial institution is exempted from the provisions of IC 24, IC 26, IC 28, IC 29, or IC 30 in compliance with this section, the
department shall do the following:
(1) Determine whether the exemption shall apply to all financial
institutions that, in the opinion of the department, possess a
charter that is:
(A) the same as; or
(B) functionally the equivalent of;
the charter of the exempt institution.
(2) For purposes of the determination required under subdivision
(1), ensure that applying the exemption to the financial
institutions described in subdivision (1) will not:
(A) adversely affect the safety and soundness of the financial
institutions; or
(B) unduly constrain Indiana consumer protection provisions.
(3) Issue an order published in the Indiana Register that specifies
whether the exemption applies to the financial institutions
described in subdivision (1).
(h) If the department denies the request of a financial institution
under this section for exemption from Indiana Code provisions that are
preempted for federally chartered institutions, the requesting institution
may appeal the decision of the department to the circuit court, superior
court, or probate court of the county in which the principal office of the
requesting institution is located.
(i) If the department determines that federal law has preempted a
provision of IC 24, IC 26, IC 28, IC 29, or IC 30 as the provision
applies to an operating subsidiary of a federally chartered entity, the
provision of IC 24, IC 26, IC 28, IC 29, or IC 30 applies to a qualifying
subsidiary (as defined in IC 28-13-16-1) of a state chartered entity only
to the same extent that the department determines the provision applies
to the operating subsidiary of:
(1) the same; or
(2) the functionally equivalent;
type of federally chartered entity. In determining whether to extend the
exemption from a provision of IC 24, IC 26, IC 28, IC 29, or IC 30 to
a qualifying subsidiary (as defined in IC 28-13-16-1) of a state
chartered entity under this subsection, the department shall use the
procedures and undertake the considerations described in this section
for a preemption determination with respect to a state chartered entity.

Legislative History

As added by P.L.73-2004, SEC.41. Amended by P.L.141-2005, SEC.21; P.L.84-2016, SEC.128.