Ind. Code ch. 37-3-3

in effect

Ind. Code § 37-3-3-1 Lender not considered a financial institution

Sec. 1. A lender is not considered a financial institution, except for purposes of IC 28-1. [Pre-2026 Revision Citation: 24-4.5-7-112.] As added by P.L.115-2026, SEC.97.

Ind. Code § 37-3-3-2 Finance charges

Sec. 2. (a) Finance charges on the first two hundred fifty dollars ($250) of a small loan are limited to fifteen percent (15%) of the principal. (b) Finance charges on the amount of a small loan greater than two hundred fifty dollars ($250) and less than or equal to four hundred dollars ($400) are limited to thirteen percent (13%) of the amount over two hundred fifty dollars ($250) and less than or equal to four hundred dollars ($400). (c) Finance charges on the amount of the small loan greater than four hundred dollars ($400) and less than or equal to five hundred fifty dollars ($550) are limited to ten percent (10%) of the amount over four hundred dollars ($400) and less than or equal to five hundred fifty dollars ($550). (d) The amount of five hundred fifty dollars ($550) in subsection (c) is subject to change under the provisions on adjustment of dollar amounts set forth in IC 37-2-1-5. However, notwithstanding IC 37-2-1-5(a), the Reference Base Index to be used under this subsection is the Index for October 2006. [Pre-2026 Revision Citation: 24-4.5-7-201.] As added by P.L.115-2026, SEC.97.

Ind. Code § 37-3-3-3 Fee for dishonored check, electronic funds transfer, or debit authorization; limits on lender's presentment of check or debiting of account

Sec. 3. (a) Notwithstanding any other law, the only fee that may be contracted for and received by the lender or an assignee on a small loan is a charge, not to exceed twenty-five dollars ($25), for each: (1) return by a bank or other depository institution of a dishonored: (A) check; (B) electronic funds transfer; (C) negotiable order of withdrawal; or (D) share draft; issued by the borrower; or (2) time an authorization to debit the borrower's account is dishonored. This additional charge may be assessed one (1) time regardless of how many times a check or an authorization to debit the borrower's account may be submitted by the lender and dishonored. (b) A lender may: (1) present a borrower's check for payment; or (2) exercise a borrower's authorization to debit the borrower's account; not more than three (3) times. [Pre-2026 Revision Citation: 24-4.5-7-202.] As added by P.L.115-2026, SEC.97.

Ind. Code § 37-3-3-4 Disclosures; informational brochure

Sec. 4. (a) For purposes of this section, the lender shall disclose to the borrower to whom credit is extended with respect to a small loan the information required by the Consumer Credit Protection Act (15 U.S.C. 1601 et seq.). (b) In addition to the requirements of subsection (a), the lender must conspicuously display in bold type a notice to the public both in the lending area of each business location and in the loan documents the following statement: "WARNING: A small loan is not intended to meet long term financial needs. A small loan should be used only to meet short term cash needs. The cost of your small loan may be higher than loans offered by other lending institutions. Small loans are regulated by the State of Indiana Department of Financial Institutions. A borrower may rescind a small loan without cost by paying the cash amount of the principal of the small loan to the lender not later than the end of the business day immediately following the day on which the borrower receives the loan proceeds.". (c) The statement required in subsection (b) must be in: (1) 14 point bold face type in the loan documents; and (2) not less than one (1) inch bold print in the lending area of the business location. (d) When a borrower enters into a small loan, the lender shall provide the borrower with a pamphlet approved by the department that describes: (1) the availability of debt management and credit counseling services; and (2) the borrower's rights and responsibilities in the transaction. [Pre-2026 Revision Citation: 24-4.5-7-301.] As added by P.L.115-2026, SEC.97.

Ind. Code § 37-3-3-5 Term of loan; consecutive small loans; extended payment plans

Sec. 5. (a) A small loan may not be made for a term of less than fourteen (14) days. (b) If five (5) consecutive small loans have been made to a borrower after the borrower's initial small loan, another small loan may not be made to that borrower within seven (7) days after the fifth consecutive small loan is paid in full. After the borrower's fifth consecutive small loan, the balance must be paid in full. (c) Subject to subsection (d), whenever a borrower has entered into an initial small loan followed by three (3) consecutive small loans, the lender shall offer the borrower the option to repay: (1) the third consecutive small loan; and (2) subject to subsection (b), any small loan entered into after the third consecutive small loan; under an extended payment plan. At the time of execution of a small loan described in subdivision (1) or (2), the lender shall disclose to the borrower the extended payment plan option by providing the borrower a written description of the extended payment plan option in a separate disclosure document approved by the director. (d) A lender shall offer an extended payment plan under subsection (c) under the following terms and conditions: (1) A borrower shall be permitted to request an extended payment plan at any time during the term of a third or subsequent consecutive small loan if: (A) the borrower has not defaulted on the outstanding small loan; and (B) the rescission period under section 6(f) of this chapter has expired. (2) An extended payment plan must allow the outstanding small loan to be paid in at least four (4) equal installments over a period of not less than sixty (60) days. (3) An agreement for an extended payment plan may not require a borrower to pay any amount before the original maturity date of the outstanding small loan. (4) The lender may not assess any fee or charge on a borrower for entering into an extended payment plan. (5) An agreement for an extended payment plan must be in writing and acknowledged by both the borrower and the lender. (6) A borrower may not enter into another small loan transaction while engaged in an extended payment plan. (7) A lender shall not: (A) compel, advise, solicit, or coerce a borrower to not exercise the borrower's right to request an extended payment plan; (B) discourage a borrower from exercising the borrower's right to request an extended payment plan; or (C) take any other action to influence a borrower's right to request an extended payment plan. (e) An agreement for an extended payment plan under subsection (c): (1) shall be considered an extension of the outstanding small loan; and (2) may not be considered a new loan. [Pre-2026 Revision Citation: 24-4.5-7-401.] As added by P.L.115-2026, SEC.97.

Ind. Code § 37-3-3-6 Limits based on borrower's income; security; partial payments; payments; loan documents; recision; renewal prohibited

Sec. 6. (a) A lender is prohibited from making a small loan to a borrower if the total of: (1) the principal amount and finance charges of the small loan to be issued; plus (2) any other small loan balances that the borrower has outstanding with any lender; exceeds twenty percent (20%) of the borrower's monthly gross income. (b) A small loan may be secured by only one (1) check or authorization to debit the borrower's account per small loan. The check or electronic debit may not exceed the amount advanced to or on behalf of the borrower plus loan finance charges contracted for and permitted. (c) A borrower may make partial payments in any amount on the small loan without charge at any time before the due date of the small loan. (d) After any payment is made on a small loan, whether the payment is made in part or in full before, on, or after the due date of the small loan, the lender shall give a signed and dated receipt to the borrower making a payment showing the amount paid and the balance due on the small loan. (e) The lender shall provide to each borrower a copy of the required loan documents before the disbursement of the loan proceeds. (f) A borrower may rescind a small loan without cost by paying the cash amount of the principal of the small loan to the lender not later than the end of the business day immediately following the day on which the borrower receives the proceeds. (g) A lender shall not enter into a renewal with a borrower. If a loan is paid in full, a subsequent loan is not a renewal. [Pre-2026 Revision Citation: 24-4.5-7-402.] As added by P.L.115-2026, SEC.97.

Ind. Code § 37-3-3-7 Security for loan

Sec. 7. A small loan may not be secured by personal property other than a check or electronic debit. [Pre-2026 Revision Citation: 24-4.5-7-403.] As added by P.L.115-2026, SEC.97.

Ind. Code § 37-3-3-8 Limits and number and amounts of outstanding loans; lender's verification; third party data base; civil penalties; excess finance charges; verification of Social Security number

Sec. 8. (a) As used in this section, "commercially reasonable method of verification" means a private consumer credit reporting service that the department determines to be capable of providing a lender with adequate verification information necessary to ensure compliance with subsection (d). (b) With respect to a small loan, no lender may permit a person to become obligated under more than one (1) loan agreement with the lender at any time. (c) A lender shall not make a small loan that, when combined with the outstanding balance on another outstanding small loan owed to another lender, exceeds a total of five hundred fifty dollars ($550), excluding finance charges. A lender shall not make a small loan to a borrower who has two (2) or more small loans outstanding, regardless of the total value of the small loans. The amount of five hundred fifty dollars ($550) in this subsection is subject to change under the provisions on adjustment of dollar amounts (IC 37-2-1-5). However, notwithstanding IC 37-2-1-5(a), the Reference Base Index to be used under this subsection is the Index for October 2006. (d) A lender complies with subsection (c) if the lender independently verifies the total number of outstanding small loans and the total outstanding balance of those small loans for a customer through a commercially reasonable method of verification. A lender's method of verifying whether a borrower has any outstanding small loans and the total outstanding balance of any loans will be considered commercially reasonable if the method includes a manual investigation or an electronic query of: (1) the lender's own records, including both records maintained at the location where the borrower is applying for the transaction and records maintained at other locations within the state that are owned and operated by the lender; and (2) an available third party data base provided by a private consumer reporting service, subject to the identification verification requirements set forth in subsection (l). (e) The department shall monitor the effectiveness of private consumer credit reporting services in providing the verification information required under subsection (d). If the department determines that a commercially reasonable method of verification is available, the department shall: (1) provide reasonable notice to all lenders identifying the commercially reasonable method of verification that is available; and (2) require each lender to use, consistent with the policies of the department, the identified commercially reasonable method of verification as a means of complying with subsection (d). (f) If a borrower presents evidence to a lender that a loan has been discharged in bankruptcy, the lender shall cause the record of the borrower's loan to be updated in the data base described in subsection (d)(2) to reflect the bankruptcy discharge. (g) A lender shall cause the record of a borrower's loan to be updated in the data base described in subsection (d)(2) to reflect: (1) presentment of the borrower's check for payment; or (2) exercise of the borrower's authorization to debit the borrower's account. If a check is returned or an authorization is dishonored because of insufficient funds in the borrower's account, the lender shall reenter the record of the loan in the data base. (h) A lender shall update information in a data base described in subsection (d)(2) to reflect partial payments made on an outstanding loan, the record of which is maintained in the data base. (i) If a lender ceases doing business in Indiana, the director may require the operator of the data base described in subsection (d)(2) to remove records of the lender's loans from the operator's data base. (j) The director may impose a civil penalty not to exceed one hundred dollars ($100) for each violation of: (1) this section; or (2) any rule or policy adopted by the director to implement this section. (k) The excess amount of loan finance charge provided for in agreements in violation of this section is an excess charge for purposes of the provisions concerning effect of violations on rights of parties (IC 37-2-6-9) and the provisions concerning civil actions by the department (IC 37-2-7-14). (l) If a borrower provides the borrower's Social Security number to a lender in connection with any transaction or proposed transaction under this chapter, the lender shall: (1) maintain procedures to verify that the Social Security number provided is legitimate and belongs to the borrower; and (2) retain copies of any documents used to verify the borrower's Social Security number. Documentation under this subdivision may be in electronic form and the numbers may be truncated. If a borrower does not have a Social Security number, the lender may require and accept another valid form of government issued identification, subject to the requirements of subdivisions (1) and (2) with respect to the government issued identification accepted. [Pre-2026 Revision Citation: 24-4.5-7-404.] As added by P.L.115-2026, SEC.97.

Ind. Code § 37-3-3-9 Carrying on other business

Sec. 9. (a) This section does not apply to a business that is licensed by the department for a purpose other than consumer loans. (b) A licensee may carry on other business at a location where the licensee makes small loans unless the licensee carries on other business for the purpose of evasion or violation of this article. [Pre-2026 Revision Citation: 24-4.5-7-405.] As added by P.L.115-2026, SEC.97.

Ind. Code § 37-3-3-10 Borrower's default; permissible and prohibited remedies; notice to borrower

Sec. 10. (a) An agreement with respect to a small loan may not provide for charges as a result of default by the borrower other than those specifically authorized by this chapter. A provision in a small loan agreement in violation of this section is unenforceable. (b) A lender or an assignee of a small loan may seek only the following remedies upon default by a borrower: (1) Recovery of: (A) the contracted principal amount of the loan; and (B) the loan finance charge. (2) If contracted for under section 3 of this chapter, collection of a fee for: (A) a returned check, negotiable order of withdrawal, or share draft; or (B) a dishonored authorization to debit the borrower's account; because of insufficient funds in the borrower's account. (3) Collection of postjudgment interest, if awarded by a court. (4) Collection of court costs, if awarded by a court. (c) A lender or an assignee of a small loan may not seek any of the following damages or remedies upon default by a borrower: (1) Payment of the lender's attorney's fees. (2) Treble damages. (3) Prejudgment interest. (4) Damages allowed for dishonored checks under any statute other than this chapter. (5) Any damages or remedies not set forth in subsection (b). (d) A contractual agreement in a small loan transaction must include a notice of the following in 14 point bold type: (1) The remedies available to a lender or an assignee under subsection (b). (2) The remedies and damages that a lender or an assignee is prohibited from seeking in a small loan transaction under subsection (c). [Pre-2026 Revision Citation: 24-4.5-7-406.] As added by P.L.115-2026, SEC.97.

Ind. Code § 37-3-3-11 Violations; remedies and damages; equitable relief; exhaustion of administrative remedies not required

Sec. 11. (a) This section applies to licensees and unlicensed persons. (b) A person who violates this chapter: (1) is subject to the remedies provided in IC 37-2-6-9; (2) commits a deceptive act under IC 24-5-0.5 and is subject to the penalties listed in IC 24-5-0.5; (3) has no right to collect, receive, or retain any principal, interest, or other charges from a small loan; however, this subdivision does not apply if the violation is the result of an accident or bona fide error of computation; and (4) is liable to the borrower for actual damages, statutory damages of two thousand dollars ($2,000) per violation, costs, and attorney's fees; however, this subdivision does not apply if the violation is the result of an accident or bona fide error of computation. The remedies described in this subsection are in addition to all other remedies set forth in IC 37-2 and this article. (c) The department may sue: (1) to enjoin any conduct that constitutes or will constitute a violation of this chapter; and (2) for other equitable relief. (d) The remedies provided in this section are cumulative but are not intended to be the exclusive remedies available to a borrower. A borrower is not required to exhaust any administrative remedies under this section or any other applicable law. [Pre-2026 Revision Citation: 24-4.5-7-409.] As added by P.L.115-2026, SEC.97.

Ind. Code § 37-3-3-12 Prohibited acts by lender

Sec. 12. A lender making small loans, or an assignee of a small loan, shall not commit nor cause to be committed any of the following acts: (1) Threatening to use or using the criminal process in any state to collect on a small loan. (2) Threatening to take action against a borrower that is prohibited by this chapter. (3) Making a misleading or deceptive statement regarding a small loan or a consequence of taking a small loan. (4) Contracting for or collecting attorney's fees on small loans made under this chapter. (5) Altering the date or any other information on a check or an authorization to debit the borrower's account held as security. (6) Using a device or agreement that the department determines would have the effect of charging or collecting more fees, charges, or interest than allowed by this chapter, including, but not limited to: (A) entering a different type of transaction with the borrower; (B) entering into a sales/leaseback arrangement; (C) catalog sales; (D) entering into transactions in which a customer receives a purported cash rebate that is advanced by someone offering Internet content services, or some other product or service, when the cash rebate does not represent a discount or an adjustment of the purchase price for the product or service; or (E) entering any other transaction with the borrower that is designed to evade the applicability of this chapter. (7) Engaging in unfair, deceptive, or fraudulent practices in the making or collecting of a small loan. (8) Charging to cash a check representing the proceeds of a small loan. (9) Except as otherwise provided in this chapter: (A) accepting the proceeds of a new small loan as payment of an existing small loan provided by the same lender; or (B) renewing, refinancing, or consolidating a small loan with the proceeds of another small loan made by the same lender. (10) Including any of the following provisions in a loan document: (A) A hold harmless clause. (B) A confession of judgment clause. (C) A mandatory arbitration clause, unless the terms and conditions of the arbitration have been approved by the director of the department. (D) An assignment of or order for payment of wages or other compensation for services. (E) A provision in which the borrower agrees not to assert a claim or defense arising out of contract. (F) A waiver of any provision of this chapter. (11) Selling insurance of any kind in connection with the making or collecting of a small loan. (12) Entering into a renewal with a borrower. [Pre-2026 Revision Citation: 24-4.5-7-410.] As added by P.L.115-2026, SEC.97.

Ind. Code § 37-3-3-13 Exemption of finance charges

Sec. 13. Finance charges made in compliance with this chapter are exempt from IC 37-2-4-35 and IC 35-45-7. [Pre-2026 Revision Citation: 24-4.5-7-411.] As added by P.L.115-2026, SEC.97.

Ind. Code § 37-3-3-14 Endorsement of check

Sec. 14. Upon the receipt of a check from a borrower for a small loan, unless the check is marked as void at the time of acceptance by the lender, the lender shall immediately stamp the back of the check with an endorsement that states: "This check is being negotiated as part of a small loan under IC 37-3, and any holder of this check takes it subject to the claims and defenses of the maker.". [Pre-2026 Revision Citation: 24-4.5-7-412.] As added by P.L.115-2026, SEC.97.

Ind. Code § 37-3-3-15 Surety bond; requirements; amount; termination; liability; notices

Sec. 15. (a) A person engaged in making small loans under this chapter shall post a bond to the department in the amount of fifty thousand dollars ($50,000) for each location where small loans will be made, up to a maximum bond in an amount determined by the director. (b) A surety bond issued under this section must: (1) provide coverage for a lender engaged in making small loans under this chapter in an amount as prescribed in subsection (a); (2) be in a form prescribed by the director; (3) be in effect during the term of the lender's license under this chapter; (4) subject to subsection (c), remain in effect during the two (2) years after the lender's license under this chapter is surrendered or terminated; (5) be payable to the department for the benefit of: (A) the state; and (B) individuals who reside in Indiana when they agree to receive financial services from the lender; (6) be issued by a bonding, surety, or insurance company authorized to do business in Indiana and rated at least "A-" by at least one (1) nationally recognized investment rating service; and (7) have payment conditioned upon the lender's or any of the lender's employees' or agents' noncompliance with or violation of this article or other applicable federal or state laws or regulations. (c) The director may adopt rules or guidance documents with respect to the requirements for a surety bond as necessary to accomplish the purposes of this chapter. Upon written request from a lender, the director may, at the discretion of the director, waive or shorten the two (2) year period set forth in subsection (b)(4) during which a surety bond required by this section must remain in effect after the lender's license under this chapter is surrendered or terminated. (d) If the principal amount of a surety bond required under this section is reduced by payment of a claim or judgment, the lender for whom the bond is issued shall immediately notify the director of the reduction and, not later than thirty (30) days after notice by the director, file a new or an additional surety bond in an amount set by the director. The amount of the new or additional bond set by the director must be at least the amount of the bond before payment of the claim or judgment. (e) If for any reason a surety terminates a bond issued under this section, the lender shall immediately notify the department and file a new surety bond in an amount as prescribed in subsection (a). (f) Cancellation of a surety bond issued under this section does not affect any liability incurred or accrued during the period when the surety bond was in effect. (g) The director may obtain satisfaction from a surety bond issued under this section if the director incurs expenses, issues a final order, or recovers a final judgment under this chapter. (h) Notices required under this section must be in writing and delivered by certified mail, return receipt requested and postage prepaid, or by overnight delivery using a nationally recognized carrier. [Pre-2026 Revision Citation: 24-4.5-7-413.] As added by P.L.115-2026, SEC.97.

Ind. Code § 37-3-3-16 Rulemaking authority

Sec. 16. The department may adopt rules under IC 4-22-2 to implement this article. [Pre-2026 Revision Citation: 24-4.5-7-414.] As added by P.L.115-2026, SEC.97.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://iga.in.gov/laws/2026/ic/titles/37Fetched: 10/17/2026