(a) Except as otherwise provided in subsections
(c), (d), and (e), the total obligation of any person, firm, limited liability
company, or corporation to any industrial loan and investment
company shall at no time exceed fifteen percent (15%) of the amount
of the capital and surplus of the company.
(b) The term "obligations" as used in this section means the direct
liability of the maker or acceptor of paper discounted with or sold to
any such company, and the liability of the indorser, drawer, or
guarantor who obtains a loan from, or discounts paper with or sells
paper under the person's guaranty to any such company, and, in the
case of obligations of a copartnership or association, includes only
those obligations of the several members thereof directly related to the
copartnership or association, and, in the case of obligations of a
corporation, includes all obligations of all subsidiaries thereof in which
such corporation owns or controls a majority interest.
(c) Subsection (a) does not apply to the following:
(1) Obligations arising out of the discount of commercial or
business paper actually owned by the person, firm, limited
liability company, or corporation negotiating such paper.
(2) Obligations of the United States or any instrumentality thereof
or of this state, or of any municipal corporation or taxing district
thereof, or obligations fully insured by the federal housing
administrator as to principal; however, the department may, under
such rules and regulations as it may prescribe, limit the total
amount that may be invested by any industrial loan and
investment company in any one (1) obligation or in any class of
obligations described in subdivisions (1) and (2).
(3) Obligations arising out of the agreement to repurchase, or the
guaranty or endorsement of, retail installment sales contracts by
a retail seller or subsequent assignee. However, this subdivision
does not apply in any case where such company purchasing such
paper does not become the absolute owner, or in any case where
installment payments are collected by a prior owner of the paper,
or by a retail seller of the goods represented thereby.
(4) Obligations arising out of the agreement to repurchase, or the
guaranty or indorsement of, title-retaining real estate installment
sales contracts by a seller, or subsequent assignees; however, this
subdivision does not apply in any case where such company
purchasing such contracts does not become the absolute owner,
or in any case where installment payments are collected by a prior
owner of the contracts or by a seller of such contracts.
(5) Obligations of the borrower arising out of loans in which the
borrower has no personal liability but which are secured by
bailment leases or the rentals due and to become due thereunder;
and the rights of the lessor in said leases and the property being
leased thereunder, and which loans are to be repaid out of said
rentals due and to become due under said leases; or obligations
arising out of the guaranty, endorsement, or assignment of
bailment leases or the rentals due and to become due thereunder
by the lessor. However, this subdivision does not apply in any
such case where such company does not have the right or does not
actually collect the rentals due or to become due thereunder.
(d) Obligations to an industrial loan and investment company of any
subsidiary or subsidiaries of the company engaged in business for the
purpose provided in section 6(a)(15) of this chapter shall at no time
exceed in the case of one (1) subsidiary ten percent (10%) of the capital
and surplus of the company or, in the case of more than one (1)
subsidiary, in the aggregate twenty percent (20%) of the capital and
surplus of the company unless in either case the department shall
approve a larger percentage.
(e) Obligations to an industrial loan and investment company of any
subsidiary or subsidiaries of the company engaged in business for the
purpose provided in section 6(a)(14) of this chapter shall at no time
exceed in the aggregate thirty percent (30%) of the amount of the
capital and surplus of the company or such larger sum as the
department may approve.
(f) Except as otherwise provided in this subsection and in section 9
of this chapter, no loan shall be made, directly or indirectly, by any
industrial loan and investment company, to any active executive
officer, agent, or employee thereof. The board of directors or executive
committee of any industrial loan and investment company may, by
resolution, duly entered in the records of the proceedings of the board
or committee, authorize loans to or extend lines of credit to:
(1) any active executive officer, agent, or employee of such
industrial loan and investment company in any amount not
exceeding, at any one (1) time outstanding:
(A) ten thousand dollars ($10,000); plus
(B) ten thousand dollars ($10,000) which may be used for the
sole purpose of educating the children of such active executive
officer, agent, or employee as hereinafter provided; or
(2) directors not holding any office in such industrial loan and
investment company, and not acting as an agent or employee
thereof.
The board or committee may likewise authorize loans to or extend lines
of credit to firms, limited liability companies, or corporations in which
active executive officers, agents or employees or directors may be
partners, members, or stockholders, but the total amount of the
obligations of all such active executive officers, agents, or employees,
and directors, or other firms, limited liability companies, or
corporations in which such active executive officers, agents,
employees, and directors are partners, members, or stockholders, shall
not at any time exceed fifteen percent (15%) of the total resources of
the industrial loan and investment company at the time any such loan
or extension of credit is made. Loans and lines of credit permitted by
this subsection shall be made only on authorization by a majority of all
of the directors or members of the executive committee of such
industrial loan and investment company, and by the affirmative vote of
all directors or members of the executive committee present at the
meeting, and such authorization may be general and need not be given
for each loan or line of credit extended. However, such general
authorization shall be voted upon at least annually. When a line of
credit has been extended pursuant to this subsection to any such active
executive officer, agent, or employee or to any such director, or to any
firm, corporation, limited liability company, or partnership in which an
active executive officer, agent, employee, or director may be a partner,
member, or stockholder, any notes or other instruments evidencing an
indebtedness to the industrial loan and investment company, and any
renewals or extensions thereof, need not be authorized as otherwise
required by this subsection if such loan, or any renewal or any
extension thereof, is within the terms of the authorization of the line of
credit theretofore extended by the directors or executive committee to
such active executive officer, agent, or employee, or to such director,
or to any firm, corporation, limited liability company, or partnership in
which any active executive officer, agent, employee, or director may be
a partner, member or stockholder. The department, under such general
rules and regulations as it may prescribe, which shall apply to all
industrial loan and investment companies alike, may require full
collateral security for all loans of the types permitted by this subsection
and, for the purpose of providing that such security may be adequate,
may specify the types thereof that may be pledged. Subject to section
9 of this chapter, the limitations of this subsection shall not apply to a
loan by an industrial loan and investment company to an active
executive officer, agent, or employee thereof made upon the security
of real estate whereupon such active executive officer, agent, or
employee maintains the person's actual residence. The term "actual
residence" includes a two (2) family dwelling unit if one (1) of such
units is occupied by the active executive officer, agent, or employee of
the industrial loan and investment company.
(g) An officer or director of any industrial loan and investment
company who knowingly violates subsection (f) commits a Level 4
felony.
(h) For purposes of any lending limits set forth in this section with
respect to an industrial loan and investment company, the total loans
and extensions of credit by an industrial loan and investment company
includes any credit exposure to a person arising from a derivative
transaction (as defined in 12 U.S.C. 84(b)(3)) between the industrial
loan and investment company and the person.
Formerly: Acts 1935, c.181, s.8; Acts 1937, c.105, s.4; Acts
1949, c.229, s.1; Acts 1955, c.20, s.3; Acts 1969, c.129, s.2; Acts 1971,
P.L.399, SEC.3; Acts 1973, P.L.284, SEC.3. As amended by Acts
1977, P.L.293, SEC.2; Acts 1979, P.L.265, SEC.2; P.L.8-1993,
SEC.448; P.L.213-2007, SEC.59; P.L.217-2007, SEC.57;
P.L.158-2013, SEC.300; P.L.186-2015, SEC.35.