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IN HB1473
Bill
Status
1/14/2015
Primary Sponsor
Terri Jo Austin
Click for details
AI Summary
HB 1473 Summary
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After December 31, 2015, eligible nonprofit organizations (501(c)(3) tax-exempt) may register with the Department of Financial Institutions to facilitate zero-interest lending circle loans ranging from $250 to $2,500 for eligible Indiana residents.
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A lending circle is a voluntary group of 6-10 members that pools contributions or obtains funds and disburses them to members for personal, family, or household purposes; loans must have minimum terms of 90-180 days depending on principal amount.
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Registered nonprofits must establish director-approved underwriting criteria, require borrowers to complete financial education programs before disbursement, report payment performance to consumer reporting agencies, and maintain surety bonds.
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Nonprofits may charge only administrative fees (7% or up to $90 for first loan; 6% or up to $75 for subsequent loans) and insufficient funds fees (up to $10 per dishonored payment, maximum 2 per month); refinancing, consolidation, and credit insurance are prohibited.
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Lending circle loans are excluded from mortgage broker licensing requirements and the Uniform Consumer Credit Code; registered nonprofits may partner with other registered nonprofits and nonregistered organizations subject to written agreements and departmental approval.
Legislative Description
Nonprofit facilitators of lending circle loans. Provides that after December 31, 2015, an eligible nonprofit organization may apply to the department of financial institutions (department) for a certificate of registration to facilitate the making of zero interest, low cost lending circle loans to eligible individuals who participate in lending circles in Indiana. Defines a "lending circle" as group of individuals that is voluntarily organized for the purpose of: (1) generating a source of funds by: (A) pooling or collecting contributions from individual group members; or (B) obtaining funds from other sources, including from lending circle loans; and (2) disbursing the
Last Action
First Reading: referred to Committee on Financial Institutions
1/14/2015