(a) Every company may exercise all the powers
conferred upon domestic corporations by IC 23-1 but only to the extent
that those powers may be necessary, convenient, or expedient to
accomplish the purposes for which it is organized. Subject to the
restrictions and limitations contained in this chapter, every company
may exercise the following powers:
(1) To issue, negotiate, and sell its secured or unsecured
certificates of investment or indebtedness, subject to subdivision
(16), upon terms and conditions, in any form, and payable at times
that are not inconsistent with this chapter and, subject to
subsection (c), bearing a rate of interest approved by the
department.
(2) To make, purchase, discount, or otherwise acquire extensions
of credit under IC 24-4.5.
(3) To lend money without security or upon the security of
comakers, personal endorsement, or the mortgage of real or
personal property or the mortgage or pledge of bailment leases or
rentals due and to become due thereunder and other choses in
action, and to contract for interest, discount, fees, charges, or
other consideration fixed or permitted by any laws of Indiana
concerning interest, discount, or usury.
(4) To discount, purchase, or otherwise acquire notes, bills of
exchange, acceptances, bailment leases, and the property covered
thereby or the rentals due or to become due thereunder or other
choses in action and, subject to such restrictions the department
imposes, to become owner or lessor of personal or real property
acquired upon the request and for the use of a customer, and to
incur additional obligations incident to becoming an owner or
lessor of the property. The liability of a lessee under the lease
does not constitute an obligation (as defined in section 8 of this
chapter).
(5) To purchase or construct buildings and hold legal title to them,
to be leased for public purposes to municipal corporations or
other public authorities having resources sufficient to make
payment of all rentals as they become due. Each lease agreement
shall provide that upon expiration, the lessee shall become owner
of the building.
(6) To invest in bonds, notes, or certificates which are:
(A) the direct or indirect obligations of the United States or of
the state;
(B) obligations of mutual funds or financial institutions if the
obligations represent a participation in a fund invested in, or are
secured by, direct or indirect obligations of the United States
owned by the mutual fund or financial institution;
(C) the direct obligations of a civil or school county, township,
city, town, other taxing district, or municipality of Indiana;
(D) a special taxing district in Indiana;
(E) issued by or in the name of:
(i) the trustees of Indiana University;
(ii) the trustees of Purdue University;
(iii) the trustees of Ball State University;
(iv) the trustees of Indiana State University; or
(v) the Indiana finance authority;
(F) issued by or in the name of any municipality of Indiana and
payable from the revenues to be derived from the operation of
facilities for the production or distribution of water, electricity,
gas, or from the operation of sewage works; or
(G) the obligations of any Indiana toll road commission, public
library, or schoolhouse holding corporation first mortgage
bonds;
which district, municipality, taxing unit, or corporation is not then
in default in the payment of either principal or interest on any of
its funded obligations and has not so defaulted for a period of
more than six (6) months within the five (5) year period
immediately preceding the purchase of the securities.
(7) To invest in bonds, notes, or debentures rated in one (1) of the
first four (4) classifications established by one (1) or more
standard rating services specified by the department that satisfy
requirements of marketability prescribed periodically by the
department that are the obligations of a person, a firm, a limited
liability company, a corporation, a state, a territory, an insular
possession of the United States, or a county, township, town, city,
taxing district, or municipality thereof which is not then in default
in the payment of either principal or interest on any of its funded
obligations and has not so defaulted within the five (5) year
period immediately preceding the purchase of the securities and
other investment securities prescribed by the department by rule.
As used in this section, the term "investment securities" means
marketable obligations evidencing indebtedness of a person, firm,
limited liability company, or corporation in the form of bonds,
notes, or debentures commonly known as "investment securities"
and the definition of the term "investment securities" prescribed
by the department by rule. Except as is otherwise provided in this
chapter or otherwise permitted by law, nothing contained in this
subdivision authorizes the purchase by an industrial loan and
investment company of shares of stock or other securities, unless
the purchase is necessary to prevent loss under a debt previously
contracted in good faith and stocks or other securities so
purchased or acquired shall, within six (6) months from the time
of its purchase, be sold or disposed of at public or private sale,
unless otherwise ordered by the department.
(8) To invest in bonds or debentures issued under and by the
authority of the Federal Home Loan Bank Act (12 U.S.C. 1421
through 1429), or of the Home Owners' Loan Act (12 U.S.C. 1461
through 1468), or obligations issued by or for farm credit banks,
and banks for cooperatives under the Farm Credit Act of 1971 (12
U.S.C. 2001 through 2279aa-14).
(9) To invest in insured shares of an insured savings association
organized under the laws of Indiana, and in insured shares of an
insured federal savings association whose principal place of
business is located in Indiana; and in certificates of indebtedness
or investment of an industrial loan and investment company
organized under the laws of Indiana. However, not more than
twenty percent (20%) of the resources of the company may be
invested in the insured shares of any such association nor more
than ten percent (10%) of the company's capital and surplus in
such certificates of industrial loan and investment companies.
(10) To make 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 insurance from the administrator.
(11) To make loans secured by mortgage on real property or
leasehold if:
(A) the mortgage is insured by the federal housing
administrator; or
(B) the company makes a commitment to insure and to obtain
insurance from the administrator, if the mortgage is not insured
by the federal housing administrator.
(12) 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 insured by national
mortgage associations.
(13) To discount, purchase, or otherwise acquire charge accounts,
and drafts and bills of exchange evidencing charge accounts and
to impose and collect monthly service charges and maintenance
charges on charge accounts, drafts, or bills of exchange which are
owned or acquired in amounts agreed upon between the company
and the obligor, or obligors, on charge accounts, drafts, and bills
of exchange.
(14) To purchase or otherwise acquire property, real or personal,
tangible or intangible, in which the company has a security
interest to secure a debt owing to the company contracted in good
faith or the purchase or acquisition of which property is
considered expedient to prevent loss from a debt owing to the
company contracted in good faith, and for such purpose to engage
in any lawful business considered necessary or expedient by the
company to preserve, protect, or make saleable the property.
Property thus purchased or acquired shall be sold and disposed of
within two (2) years, or a longer period permitted by the
department, after the purchase or acquisition.
(15) To act as trustee of a trust created in the United States and
forming part of a stock bonus, pension, or profit sharing plan that
is qualified for tax treatment under Section 401(d) of the Internal
Revenue Code, and to act as trustee or custodian of an individual
retirement account within the meaning of Section 408 of the
Internal Revenue Code, if the funds of that trust or account are
only invested in certificates of investment or indebtedness of the
company or in obligations or securities issued by that company.
All funds held under this subdivision in a fiduciary capacity may
be commingled by the company for appropriate investment
purposes. However, individual records shall be kept by the
fiduciary for each participant and shall show in proper detail all
transactions engaged in under the authority of this subdivision.
(16) To do anything necessary and appropriate to obtain or
maintain federal deposit insurance under the Federal Deposit
Insurance Corporation Act (12 U.S.C. 1811 through 1833e) or
insurance under any other federal or Indiana law providing
insurance for certificates of investment or indebtedness issued by
a company. A company that obtains and maintains federal deposit
insurance is not required to obtain approval from the department
concerning the rate of interest payable on, or the form, the terms,
or the conditions of the certificates of investment or indebtedness,
and the company may exercise all of the powers that are conferred
upon institutions maintaining federal deposit insurance that are
not in conflict with Indiana law.
(17) To become a member of a federal home loan bank and
acquire, own, pledge, sell, assign, or otherwise dispose of shares
of the capital stock of a federal home loan bank.
(18) To borrow money and procure advances from a federal home
loan bank and to transfer, assign to, and pledge with the federal
home loan bank any of the bonds, notes, contracts, mortgages,
securities, or other property of the company held or acquired as
security for the payment of the loans and advances.
(19) To possess and exercise all rights, powers, and privileges
conferred upon and do and perform all acts and things required of
members or shareholders of a federal home loan bank, or by the
provisions of 12 U.S.C. 1421 through 1449.
(20) Subject to section 6.3 of this chapter, to exercise the rights
and privileges (as defined in section 6.3(a) of this chapter) that
are or may be granted to national banks domiciled in Indiana.
(b) 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, applies to loans, advances of credit,
or purchases made pursuant to subsection (a)(10), (a)(11), or (a)(12).
(c) If any national or state chartered bank or savings association is
not limited by law with regard to the rate of interest payable on any
type or category of checking account, savings account, or deposit,
certificate of deposit, membership share, or other account, then
industrial loan and investment companies are similarly not limited with
regard to the interest payable on certificates of investment or
indebtedness.
Formerly: Acts 1935, c.181, s.6; Acts 1937, c.105, s.3; Acts
1955, c.20, s.2; Acts 1969, c.129, s.1; Acts 1971, P.L.399, SEC.2; Acts
1973, P.L.284, SEC.2; Acts 1975, P.L.44, SEC.5. As amended by Acts
1977, P.L.293, SEC.1; Acts 1979, P.L.265, SEC.1; Acts 1982, P.L.169,
SEC.1; P.L.269-1983, SEC.1; P.L.141-1984, SEC.10; P.L.2-1987,
SEC.42; P.L.20-1990, SEC.11; P.L.8-1991, SEC.28; P.L.42-1993,
SEC.71; P.L.262-1995, SEC.64; P.L.194-1997, SEC.3; P.L.79-1998,
SEC.70; P.L.215-1999, SEC.6; P.L.235-2005, SEC.204; P.L.2-2007,
SEC.355; P.L.162-2007, SEC.39; P.L.213-2007, SEC.57;
P.L.217-2007, SEC.55.