IndianaSB 169Second Regular Session 124th General Assembly (2026)SenateWALLET

Reorganization of consumer lending laws.

Sponsored By: Scott Baldwin (Republican)

Signed by Governor

insurance and financial institutionsthe housefinancial institutions

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Bill Overview

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100 provisions identified: 43 benefits, 19 costs, 38 mixed.

Ban on deceptive credit practices

The law bans deceptive and unfair credit practices. Examples include charging “best efforts” fees without getting a loan, false ads about financing, doing business without a needed license, pressuring appraisers, or adding prohibited fees. It also bans false statements to agencies and hiding or destroying records. Consumers can seek relief when these rules are broken.

Interest caps on store credit

For consumer credit sales, annual interest is capped at the greater of: 36% on balances up to $2,000; 21% on $2,000–$4,000; 15% over $4,000; or a flat 25%. Precomputed sale agreements are banned for sales made after June 30, 2020. Older sale agreements may have different terms based on their date.

Unauthorized loans are void

If a lender lacked the legal authority to make your consumer loan, the loan is void. You do not owe the principal or the finance charge. If you win a case showing a violation, the court can make the creditor pay your reasonable attorney’s fees.

Homeowners can sue for triple damages

If a violation causes you loss, you can sue for your actual damages. If the court finds a willful or knowing violation, the court may award three times your actual damages. The court may also award attorney’s fees and costs.

One statewide rulebook for lending

The state is the only authority that can set rules for making, servicing, and collecting loans. Local governments cannot create or enforce their own loan rules on these topics. A deal counts as made in Indiana when the lender receives your offer or agreement in Indiana, or when the lender solicited in Indiana, with exceptions for land outside Indiana and deals made at a lender’s office in another state. Indiana’s enforcement rules apply in Indiana court cases even if the original deal happened elsewhere.

Alternative mortgages can compound interest

Beginning July 1, 2026, some alternative mortgage loans may add unpaid interest to principal, and that added amount counts as principal. The mortgage lien also covers later advances and stays ahead of later‑recorded liens, except for taxes and special assessments. This can raise your total interest cost over time.

Faster levies and wage garnishment for taxes

From July 1, 2026, if a tax judgment is still unpaid after required notices, the county treasurer may levy bank funds, garnish wages, and withhold county payments without going to court. Employers must garnish and may charge an employer fee that the taxpayer pays. After a tax warrant judgment is uncollected or payment is not made on demand, the Department of State Revenue may claim funds at a bank (with up to a 60‑day hold), garnish wages within legal limits, and levy or sell other property with notice and redemption rights.

Protections in foreclosure rescue deals

If your home is resold within 18 months of a foreclosure reconveyance, the buyer must pay you at least 66% of the net resale proceeds within 90 days. You can cancel a consultant contract or a reconveyance until midnight of the seventh business day. A mailed cancellation is effective three days after you mail it with postage paid. You must repay advances within 30 days to keep the rescission valid. The buyer must give you a detailed accounting on the attorney general’s form and the consultant must keep your records for at least three years. The buyer must verify you can reasonably pay, give a rights notice, and hold a formal settlement before any transfer. If your housing and other debt payments are 60% or less of your monthly gross income, the law presumes you can pay; if the buyer relied only on your statement, they are presumed not to have verified.

What counts as a mortgage now

The law defines first‑lien home loans and what a “mortgage” means, and it excludes land contracts without a deed. First‑lien mortgages are usually not treated as consumer loans, except for disclosures, payoff quotes, property‑tax info, department powers, and debtor remedies. Some first‑lien mortgages now get the same disclosure and rescission rights as other consumer credit. The old first‑lien mortgage chapter is repealed July 1, 2026, and prior compliant documents remain valid. The state can treat a disguised deal as a loan so these rules apply.

Licenses and $50K bonds for small loans

If you regularly make or collect small loans in Indiana, you must be licensed. If you also make other consumer loans, you need separate licenses. You must post a $50,000 surety bond for each location, meeting the director’s form and rating rules, and it generally stays through the license and two years after. Finance charges that follow the small‑loan chapter are exempt from two listed statutes.

Overhaul of state consumer credit rules

Beginning July 1, 2026, the state repeals the old Uniform Consumer Credit Code and uses new, reorganized rules. The law sets maximum charges and displaces some older limits on creditor powers. Consumers keep access to courts because consumer credit contracts stay outside the arbitration chapter. The department director can reclassify disguised sales as consumer credit deals, and investigations stay confidential until enforcement. Some banks and licensed lenders are no longer treated as collection agencies, and fewer lenders count as “financial institutions” for privacy. Existing rules on creditor cancellation of insurance still apply. Courts continue to enforce liens and bank-account holds under updated citations.

Regulated lenders must use state software

Every licensee must use the automated exam and regulatory software the director designates. The director issues guidance, and using the software as directed is not a violation of the cited state rule. This standardizes oversight and may raise firm compliance duties.

Caps on consumer loan interest and fees

The law caps interest on covered consumer loans at 25% APR on unpaid balances. For supervised loans, the cap is the greater of a tiered rate (36% on the first $2,000, 21% on the next $2,000, and 15% over $4,000) or 25% APR. At closing, the finance charge plus any nonrefundable prepaid charge cannot exceed the rate set in IC 35-45-7-2. After default in a consumer sale, only reasonable attorney fees and costs apply, and deferral charges are capped at 25% a year of the deferred amount. Some lenders using this section are exempt from certain state licensing rules.

Clear rules for sales and disclosures

The law defines which purchases count as consumer credit sales and brings most consumer‑loan rules to consumer‑related sales. Home solicitation sales must follow federal buyer protections in 16 CFR 429. Lenders must give you the same loan disclosures required by federal Truth in Lending unless the deal is federally exempt. Any offer that activates a new loan by a check or similar instrument must say, in at least 10‑point type: “This is a solicitation for a loan. Read the enclosed disclosures before signing this agreement.” Parties can also agree in writing to treat a non‑consumer loan as a consumer loan so consumer protections apply.

Faster payoff and payment crediting

Creditors must credit your payment on the date they receive it, unless a short delay causes no extra charges. If they accept a payment that breaks their written rules, they must credit it within five days and fix any extra charges next period. On written request, a creditor or mortgage servicer must send an accurate payoff amount within seven business days (not counting weekends or legal holidays) or owe you $100. If they ignore a second written request, they owe at least $100 or the finance charges that built up while they delayed. You can keep paying the original lender until you get proper notice of an assignment, and any new holder must show proof on request.

Loan broker refunds after cancellation

Starting July 1, 2026, if you rescind a covered loan deal under the federal Truth in Lending Act within 20 days after the creditor gets your notice, the loan broker must return any money you paid them, except bona fide third‑party fees.

Lower caps on loan fees and terms

Small‑loan finance charges are capped by tiers: 15% on the first $250, 13% on $250–$400, and 10% on $400–$550. Nonrefundable prepaid finance charges are capped at $75, $150, or $200 by loan size (and 3% if the loan is secured by land). Late fees are capped at $5 for very frequent payments and $25 for less frequent or single‑installment loans. Lenders face limits on repeat up‑front fees, and supervised non‑revolving loans have maximum terms (up to 37 months over $300; up to 25 months at $300 or less). The law bans precomputed supervised loans made after June 30, 2020 and limits default/deferral and insurance charges in deferrals, refinances, or consolidations.

New protections for vehicle GAP

GAP coverage is optional. Sellers must disclose the price and terms, and you must ask for it to buy it. Vehicle GAP must have at least a $500 deductible, include a 30‑day trial period, and end when you pay off the loan. If you paid more than $400 for GAP, you must get a fair refund of the unused amount when it terminates.

No deficiency on low-cost repossessed goods

If goods with a cash price of $4,000 or less are repossessed or given back, you do not owe the remaining debt. The seller does not have to resell the item. A court cannot allow repossession or levy based on a judgment that this rule would block.

Penalties and rights when overcharged

You keep your rights under this law and cannot sign them away. If you are owed a refund and the creditor refuses within a reasonable time, you can recover a penalty up to the larger of the finance charge or ten times the overcharge. For deliberate violations, you can get the penalty even if a refund was later paid. Time limits apply: two years for revolving accounts and one year for other loans or sales.

Protections in credit sales and leases

Consumer credit sales and leases cannot add default charges beyond what the law allows. Any confession‑of‑judgment clause is void. You can be required to pay attorney fees only if they are reasonable, come after default, and the lawyer is not a salaried employee of the seller or lessor. For non‑revolving sales, the yearly finance rate is capped at 25% using the actuarial method. Revolving account rates follow the statute’s revolving‑account rules.

Refunds and oversight for credit insurance

If you pay off a loan in full with credit insurance money, the lender must return any part of the insurance charge they kept (refunds under $1 are not required). If they do not pay within 60 days, they owe daily interest at the contract APR and may face a civil penalty up to $1,000 for a pattern of violations. Insurers must file credit‑insurance forms and premium schedules with the Insurance Commissioner, who has 30 days to disapprove unfair or unreasonable filings.

Robocall and collector abuses are deceptive acts

Beginning July 1, 2026, breaking the federal robocall law or the federal debt collection law counts as a deceptive act under state law. This gives consumers a clear state‑law path to act against suppliers who violate those federal rules.

Stronger enforcement and refunds

The department can act for you to enforce your loan rights against licensed or should‑be‑licensed creditors. It can sue lenders that collect illegal charges and courts must order refunds, with extra penalties for willful or unrefunded overcharges. Courts and the department can fine violators, and the director can force refunds if a lender’s accounting hides overcharges. Loans structured to dodge the rules can be brought under the law’s limits. Courts may refuse unfair contract terms, and you have a clear right to get back any amount charged over the legal limit. Time limits apply: two years for revolving accounts and one year for others.

Stronger guardrails on small loans

You cannot get a small loan if the new loan plus any outstanding small loans would be over 20% of your monthly gross income. Small loans must be at least 14 days long, and after five straight small loans, there is a 7‑day cooling‑off before another loan. Lenders cannot renew small loans, cannot take more than one check or one debit authorization per loan, and cannot exceed the amount advanced plus allowed finance charges. If you default, they can recover only principal, allowed finance charges, a contracted returned‑item fee, and court‑awarded postjudgment interest and costs. They cannot use abusive collection tactics, force waivers, require confession of judgment, or sell tied insurance. Returned‑item or dishonored‑debit fees are capped at $25 per event and a check or debit can be tried no more than three times.

Stronger protections for small loans

A small loan is $50 to $550 in principal. Lenders must give you federal disclosures and a bold warning that these loans are short‑term. You may make partial payments anytime without a fee and get a signed receipt. You can cancel by paying back the principal by the end of the next business day. After an initial loan plus three straight small loans, you must be offered an extended plan with at least four equal payments over at least 60 days, and you usually cannot take another small loan during the plan. Contracts must list allowed remedies, and checks used as security must be stamped with a notice. If a lender breaks these rules, you can recover actual damages plus $2,000 per violation and the lender loses the right to collect charges, with narrow exceptions for bona fide errors.

Stronger protections in loan collections

Lenders cannot take an assignment of your earnings to secure a consumer loan. You cannot agree to a confession of judgment on a consumer loan. A lender cannot split loans to hike charges or dodge APR disclosure. You are not liable for a loan started by a stolen or misdelivered instrument. Loans tied to threats or criminal means are not enforceable in civil court. Default charges must follow the law; extra unauthorized fees are not allowed.

Stronger remedies for illegal consumer loans

If a supervised loan breaks the law on its payment schedule or term, you do not have to pay the loan finance charge and you can seek a penalty up to three times that charge. You must sue within one year after the last scheduled payment was due. If a lender lacked legal authority to make a consumer loan, the loan is void: you owe neither principal nor finance charges and can recover what you paid. Time limits are two years for revolving accounts and one year after the last scheduled payment due date for other loans.

Tighter rules for foreclosure help

Foreclosure consultants must give required written notices and cannot take fees before work is done (with narrow security exceptions). They cannot charge more than 8% per year on loans to homeowners, take wage assignments, accept secret payments, grab property interests, or take broad powers of attorney. While your right to cancel a reconveyance deal is active, the buyer cannot record your documents or transfer or encumber the home. Consultants also cannot claim any government tie or endorsement.

Closing protection letters at settlement

Beginning July 1, 2026, if a title company also runs your closing, it must give a closing protection letter to the lender, borrower, buyer, and seller. The letter covers losses of closing funds from theft, misuse, or not following written title or lien instructions. Any fee per recipient must be approved by the insurance commissioner and cannot be split.

Stronger rules for high‑cost loans

Lenders must check that you can repay a high‑cost home loan. Your balance cannot grow because payments don’t cover interest, except for a borrower‑requested temporary pause. Prepayment fees are capped at 2% in the first 24 months and banned after two years; you must be offered a no‑penalty option. Lenders cannot split deals to hide total points and fees, and cannot finance points and fees into the loan. High‑cost mortgages must be clearly labeled in notices and in the recorded documents.

Zero‑interest nonprofit mortgages exempt

If the director approves a bona fide nonprofit, its zero‑interest first‑ or second‑lien mortgages are exempt from the consumer‑credit law. The nonprofit must be a 501(c)(3), serve mostly low‑income households, avoid balloon payments and origination fees, and use volunteers or non‑commission staff. You get this benefit only if your lender is an approved nonprofit.

Job protections when wages are garnished

Your employer cannot fire you because creditors tried to garnish your wages. If you are fired for that reason, you can sue within six months, seek reinstatement, and recover up to six weeks of lost wages. Beginning July 1, 2026, employers who punish workers because of an income‑withholding order can be fined up to $5,000.

Stronger state enforcement against unfair lending

The department can order a creditor to stop violations after notice and a hearing, and can sue to get court orders that stop unlawful practices. Courts can grant temporary relief during a case. The department can target unconscionable or fraudulent credit terms, inducements, or debt collection. The attorney general can seek restitution and up to $10,000 per violation, with a five‑year filing window. Knowingly breaking the foreclosure rules is a Class A misdemeanor, and the department may accept written promises to stop; breaking them can be used as proof.

Stronger state tools to police lenders

If a creditor or its originator breaks the law, the surety bond can pay claims. The director can also collect on the bond to cover enforcement costs, final orders, or judgments. The department can order refunds for overcharges it finds and can say a deal is really disguised consumer credit. It can enforce federal‑style mortgage disclosure penalties. Final orders take effect on day 11 after service, and courts can compel subpoena compliance. The director can hire experts and rely on other officials’ reports and CPA audits.

Homeowner Protection Unit and funding

Beginning July 1, 2026, the Attorney General runs a Homeowner Protection Unit. The unit investigates mortgage fraud and home‑loan abuses, can file complaints, and can demand documents and testimony. The state creates a special account to fund the unit. For each mortgage recorded, $2.50 is sent to the state; the comptroller splits it $1.25 to the general fund and $1.25 to the unit. Counties send funds by June 20 and December 20; the comptroller distributes by June 30 and December 31.

New consumer lending code in 2026

Beginning July 1, 2026, the law creates Title 37 to organize consumer lending rules. The department can set temporary rules and licensing for creditors and mortgage originators to meet federal standards. Starting that date, the department enforces rental‑purchase rules and CPAP transactions, can order refunds, and can fine up to $10,000 per violation after notice and a hearing.

Tougher licensing and registry for lenders

Licenses are issued only if the company and key people have the training, experience, finances, character, and fitness to operate honestly and fairly. The department can deny proxy applications filed for unqualified people. The director uses the Nationwide Multistate Licensing System and Registry to request and share information, and those records are confidential but shareable with other regulators.

Stronger privacy for bank and license data

Information in the NMLSR is confidential and generally not open to public inspection, subpoena, or civil lawsuits, except for the director’s enforcement use. The department and director may not give national criminal history check results to private parties. Beginning July 1, 2026, department staff may not disclose depositor or shareholder names, deposit amounts, or other institution affairs, and these privacy protections extend to more licensed entities.

When lenders can cross collateralize

A seller in a consumer credit sale may use property from a prior or later sale to secure other debts with that seller. The total credit charge on balances tied together cannot be higher than if the balances were consolidated. This rule does not apply to an assignee that is not related to the original seller.

Licensing and renewals move to NMLSR

The Department takes and acts on license applications for first‑lien mortgage work. The director designates the NMLSR to process applications and renewals and issue unique IDs. A "creditor" includes those who regularly make first‑lien mortgages with a finance charge or more than four payments (with a table‑funding exclusion). Licenses must be renewed by December 31 each year, with fees, reports, any required bond, call reports, a compliance certification, and disclosure of material changes. The department sets initial, renewal, and exam fees and can charge a daily fee when those are late. If you miss filing or payment by 60 days after the due date, your license can be suspended or revoked.

More reporting and records for lenders

Licensees must keep records that show compliance and give the department free access. Keep first‑lien mortgage and other loan records for two years after the final entry and use GAAP or an approved format. File call reports with the NMLSR and an annual composite report; late filings can trigger daily fees. Tell the department within 30 days about changes in name, address, branches, bankruptcy, or revocation actions, and report any felony conviction of the company or key leaders within 30 days. Show the originator’s unique ID on mortgage applications and other required documents. If you use an offsite automated loan machine, notify the department, store its records at an approved site, and post the records address and a phone number at the machine. Use the automated exam software the director designates and follow the guidance.

New supervision fees on loan balances

Sellers, lessors, and lenders that file with the department must pay a supervision fee. The fee is based on original unpaid balances from Indiana consumer credit over $100,000 that you hold more than 30 days. Similar rules apply to assignees and assignors based on balances at assignment. The director sets the per‑$100,000 fee schedule. Some license renewals can deduct specified prior fees.

Stronger exams and penalties for lenders

The department can examine records, subpoena witnesses, and take documents. Vendors that serve creditors must submit to examinations, or the director can order creditors to stop using them. If records are outside Indiana, make them available in‑state or pay the department’s reasonable travel costs. If investigated, you must pay reasonable investigation costs within 60 days or face a daily fee. The department can issue show‑cause orders and suspend or revoke licenses after a hearing and can act quickly in emergencies. After a hearing, it may remove officers, bar people from certain work, and fine up to $15,000 per violation. The director sets penalties based on gravity, history, and any economic gain. Creditors cannot indemnify officers for these penalties; funds go to the financial institutions fund. Beginning July 1, 2026, mortgage businesses that also broker loans fall under loan‑broker rules and department exams and fees. If a creditor proves a violation was an honest mistake, the creditor is not liable under specified remedies and the deal remains valid.

State approval for creditor takeovers

No one may take control of a creditor without state approval. Control includes directing policies or owning at least 25% of voting shares. The department has up to 120 days to act on a change‑in‑control application.

New reporting and tax rules for mortgage lenders

Licensed mortgage creditors must file reports of condition to the Nationwide Multistate Licensing System and file financial statements on all first‑lien mortgages with the department, no more often than yearly. Licensees must tell the department within 30 days about major events like branch changes, bankruptcies, or certain convictions. A creditor’s CEO must report any transfer that gives a holder at least 10% ownership within 10 days after it posts to the books. Creditors handling first‑lien mortgages, and lenders on loans secured by a borrower’s main home, must comply with IC 6‑1.1‑12‑43. These are compliance duties for lenders, not new consumer taxes.

Collateral and deferral limits on loans

For supervised loans of $4,000 or less, a lender cannot take an interest in your land as collateral; any such security is void. For older precomputed loans made before July 1, 2020, a lender may charge a deferral fee on deferred payments, but only up to the lesser of 36% per year or the previously stated rate.

New rules for rent-to-own deals

Beginning July 1, 2026, your wages cannot be garnished for rental‑purchase debt before a court judgment. Rental‑purchase deals are mostly outside several consumer credit laws unless the rental‑purchase article says otherwise. These contracts cannot be used for motor vehicles (with limited parts exceptions), other titled property, or live domestic animals. Rental‑purchase of dwellings is not covered by this article.

No precomputed loans; new rate cap

For consumer loans made after June 30, 2020, lenders must use a rate on unpaid balances that does not exceed 25% a year. Precomputed consumer loans are not allowed after that date. A precomputed loan is one where the total due combines principal and finance charge figured in advance. If you fully prepay a precomputed loan made before July 1, 2020, the lender must rebate the unearned finance charge (very small rebates under $1 are not required). Lenders may still charge a limited nonrefundable prepaid finance charge if the law allows it.

Paying off and refinancing consumer loans

You can refinance a scheduled payment that is more than twice the average of earlier payments, with no penalty. Lenders must credit your payment the day they get it, or within five days if they accepted a nonconforming payment; any charge caused by a delay must be fixed next cycle. You may prepay a loan at any time. For loans secured mainly by land, a lender may charge up to a 2% prepayment penalty on amounts you prepay within a 60‑day window, but not if you refinance with the same creditor, if insurance pays, after acceleration for default, or after three years. You and a lender may also consolidate your consumer debts under the law’s rate limits. For revolving accounts, the average daily balance may be computed using a 30‑day month.

Rules for insurance sold with loans

Creditors may offer insurance and charge a separate fee only if insurance laws and filed rates allow it. They must mail or deliver your policy or certificate within 30 days after coverage starts, or promptly tell you if there is a delay. If insurance is required, you can use your own policy, and a creditor cannot request cancellation unless you default or agree in writing; any cancellation needs written notice at least 10 days after delivery (13 days after mailing). When you pay off the loan, any unearned property insurance premium must be refunded. If the lender pays to insure or preserve collateral under your agreement, those costs can be added to your debt but must be disclosed and cannot earn interest above the stated or allowed rate.

Stronger data and credit report rules

Beginning July 1, 2026, covered businesses must store and dispose of personal records in ways that protect your information and must follow breach‑notice laws after a data breach. On the same date, the law updates who counts as a consumer reporting agency and excludes some designated private entities, which may change which organizations must follow credit reporting rules.

More rights for mortgage borrowers

If a first‑lien mortgage can be rescinded, the lender cannot charge interest during the rescission period and must release funds after it ends. You can pay off your loan in full at any time without a penalty, and the lender or servicer must give a written payoff amount within 7 business days or face at least a $100 penalty and added charges. For mortgages 60 days delinquent, short‑sale offers must be acknowledged within 5 business days and accepted or rejected within 30 business days, with a possible 15‑day extension. Servicers of high‑cost home loans must report your payment history to a national credit bureau at least quarterly, with limited exceptions.

Wage garnishment limits and employer fees

For most debts, no more than the smaller of 25% of your disposable pay or the amount over 30× the federal minimum wage can be taken. A judge can lower the 25% limit for good cause, but not below 10%. For support orders, up to 50% or 60% of disposable pay can be withheld, rising to 55% or 65% if the support is over 12 weeks old. Support withholding comes before other garnishments. For non‑child support garnishments, your employer can charge one fee: the greater of $12 or 3% of the total, split half from your pay and half from the creditor. That fee is not an assignment of wages. For child support, the employer may deduct $2 each time they withhold support.

Stronger bonds for mortgage creditors

Licensed mortgage creditors and exempt sponsors of licensed originators must carry a surety bond. The director sets the bond amount based on your mortgage volume and the bond must come from an insurer rated at least A-. The bond stays in force during the license and usually for two years after, unless the director shortens or waives it. If a claim reduces your bond, you must notify the department and restore it within 30 days after notice. If your surety cancels, you must notify the department and file a new bond. Cancelling a bond does not erase liabilities that arose while it was active. These bonds help protect Indiana consumers by backing claims for losses.

Stronger enforcement for mortgage lenders

The department can suspend or revoke a license for repeated or willful violations, lack of qualifications, or material misstatements. The director can remove or bar company leaders for violations, fraud, or a felony. Letting a convicted felon serve in violation costs $500 per day. Creditors must tell the department within 30 days when someone accused of fraud or similar misconduct leaves. You can request a hearing in writing; notices must state the facts and how to ask for a hearing. If you request a hearing within 10 days, the department holds it within 45 days. The director may order immediate suspension, and the person has 15 days to ask a court for a stay. Giving up a license does not erase liability for past acts.

Loans and deals not covered by the law

The article does not cover many listed transactions. Examples include government credit, business and farm credit, certain insurance sales, tariff‑regulated utility transactions, licensed pawnbroker rates, some installment home fuel agreements without finance charges, Title IV student loans, and SEC/CFTC‑regulated margin or commodity accounts. Some community development and HUD‑funded subordinate‑lien mortgages are also exempt with listed exceptions. The United States, certain government instrumentalities, and qualifying nonprofits are excluded.

Some credit limits track inflation

Dollar amounts marked for adjustment change with the CPI‑U. Changes happen only on January 1 of odd‑numbered years and only when the index change is 10% or more. Amounts move in 10% steps based on March 5, 1971 levels and cannot go below 1971 amounts. The department must announce changes 60 days before they take effect.

More lender oversight and exams

The department can inspect records, subpoena witnesses, and order refunds, and can charge exam costs above filing fees (due in 60 days, with daily late fees). The director may hire experts, use data systems, and rely on outside audits; agencies may coordinate exams with the securities and insurance regulators. The department lists powers like taking complaints, seeking voluntary compliance, and running consumer education, and actions taken under its written guidance are a safe harbor. For changes in control, the director can extend review (one 30‑day and up to two 45‑day extensions) and approves only qualified acquirers that do not jeopardize owners, creditors, or the public.

Stronger state oversight of lenders

Beginning July 1, 2026, most financial institutions must follow federal and state anti‑money‑laundering laws, and the department enforces state rules. No one may take control of a creditor until the department approves the change; the department has 120 days, with limited extensions, and 10% ownership changes must be reported within 10 days. Also beginning July 1, 2026, the department has seven voting members with required backgrounds and party balance. The department must use interim rules to announce indexed dollar changes and certain loan and bankruptcy adjustments on set timelines.

Who needs a consumer loan license

Starting July 1, 2026, the law updates who is a “financial institution” and clarifies that banks and licensed consumer finance companies count as “creditors.” Depository institutions, certain regulated subsidiaries, and credit union service organizations may make non‑mortgage consumer loans in Indiana without this license. Licensed collection agencies may take assignments and collect without this license. Others who regularly make, take assignment of, or directly collect consumer loans must get and keep a license, with a separate license for each legal entity.

Fair deal rules for sales and leases

Leasing live domestic animals is banned. Sellers and lessors cannot take an assignment of your wages for a consumer sale or lease; any such assignment is unenforceable and revocable. A seller or lessor also cannot offer rebates or discounts that depend on events after you agree to buy or lease; deals induced that way are unenforceable and you may rescind or keep goods without paying.

Pawnbroker rate cap and terms

Beginning July 1, 2026, pawnbrokers’ maximum interest rate matches the supervised‑lender maximum. Loan terms must be at least one month. If you pay a pawn loan in the first month, only one month of interest may be charged. The law bans loan splitting to dodge rules, and overcharging lets you recover principal and interest and get your pledged item back.

Standard pawn ticket with key details

When you take a pawn loan, the pawnbroker must give you a written ticket at the time of the loan. It must list who you and the broker are, the items pledged, the loan amount and date, the APR, your ID, and the last day to redeem in 14‑point bold type. It must also show the department’s toll‑free number.

Stronger limits on wage garnishment

Courts cannot enter or enforce wage orders that exceed legal garnishment or support limits. Creditors cannot take your wages before a court enters judgment in your case.

Free help list for homeowners

The state keeps a list of nonprofits that help homeowners in default or foreclosure. You can ask for names and phone numbers. Listed groups cannot contract with for‑profit lenders or foreclosure buyers.

Reverse mortgage counseling required

Lenders that offer a reverse mortgage must give you a HUD‑approved pamphlet and make sure you get HUD‑approved counseling. You must provide the HUD counseling certificate before the lender can make the loan.

Rules for earned wage access services

Beginning July 1, 2026, the law defines earned wage access (early pay) services and key terms. It covers both employer‑integrated and consumer‑directed services and lists what is not covered, like small loans. It also clarifies who is a provider, licensee, or passive investor.

Mortgage lenders can co-locate businesses

Effective July 1, 2026, a licensed mortgage company may run other lawful businesses at the same location. The extra business cannot be used to evade or violate the consumer lending law.

Smooth switch to the new credit code

Starting July 1, 2026, old rules stay in place until agencies update them, and agencies must finish updates by January 1, 2028. People covered by the old rules have until July 1, 2027 to update documents and websites; the transition ends June 30, 2028. Contracts and materials made under the old law remain valid, and old citations point to the new sections. Federal-law references mean the federal text as of December 31, 2024, and the Uniform Commercial Code fills gaps. Historic 1971 licenses remain recognized under this article.

Recognized nonprofit housing counselors

The law defines which groups count as bona fide nonprofit housing counselors. To be exempt for a year, a nonprofit must file by December 31 and show it offers mortgage terms favorable to borrowers; the director must agree. Groups must be 501(c)(3), focus on affordable housing or education, avoid conflicted fees, and use HUD or state‑certified counselors.

More notice for Medicaid provider rulings

From July 1, 2026, more administrative orders must include formal notice. This includes Medicaid hospital reimbursement decisions, some audit findings, certain license actions, and orders against some unlicensed providers.

Attorney fees after loan default

Your loan contract may require you to pay reasonable attorney fees after default if the case is sent to an attorney who is not a salaried employee of the lender. Any term that tries to require unlawful fees is unenforceable.

Fees when paying government by card

Beginning July 1, 2026, a government body may charge you a vendor transaction fee, discount fee, or other enhanced service fee when you pay electronically. Agencies can also accept the net remitted amount as full payment if all affected government bodies agree. The Gaming Commission may charge either up to the vendor’s fee or a uniform convenience fee up to $3 on card payments.

More bank marketing calls to customers

Starting July 1, 2026, more calls from banks and licensed lenders are exempt from state telemarketing limits if they have an established business relationship with you under federal rules. This can mean more allowed marketing calls from your bank or lender.

Tighter checks for license applicants

When reviewing you under section 26(b), the director may look at your credit history. That includes bankruptcies in the last 10 years, current judgments (not medical‑only), tax or government liens, foreclosures in the last 3 years, and patterns of serious delinquency in the last 3 years. These factors can affect whether you qualify for a license.

Up to $30 minimum finance charge

For non‑revolving loans, a lender may charge a minimum finance fee up to $30. This applies only if the lender does not also charge a nonrefundable prepaid finance charge. The same $30 cap applies to supervised, non‑revolving loans when prepayment rules are followed.

8% interest when contract is silent

Starting July 1, 2026, if a written debt does not state an interest rate and no other law applies, interest is 8% per year from the date of settlement. Interest equals principal × 8% × (days owed ÷ 365).

Recording fees and card charges

Effective July 1, 2026, recording a deed costs $25 and a mortgage costs $55. If you pay by card, you may pay the vendor’s card charge or a convenience fee up to $3. The law sets how these fees are split into county funds.

Fees when paying state taxes by card

Starting July 1, 2026, if you pay state taxes or BMV excise taxes by card, the agency may charge a card fee up to the vendor’s highest charge from the most recent period. The BMV may also charge a $1.70 service fee on each excise tax collection. Your tax is not finally paid until the department receives payment or credit from the card issuer.

Card fees on state filings allowed

Beginning July 1, 2026, the Secretary of State may take filing payments by card. The office or its vendor may charge you a card fee up to the highest transaction fee the office paid in the most recent period. A card payment is not final until the office receives payment or credit.

Tighter licensing and conduct rules for lenders

People in the mortgage and lending business face clear bans on fraud, deceptive promises, unlicensed activity, prohibited fees, and record‑keeping failures. Starting July 1, 2026, breaking certain consumer laws is also a licensing violation and a Class A infraction. Licenses cannot be assigned or transferred except as approved, and the department must deny or not renew a license if you are on the state tax warrant list until cleared. Doing a single small‑loan activity in the prior or current year can make you a regular lender for licensing. Small‑loan lenders are not treated as financial institutions except under one statute. People with felony convictions cannot serve as officers or managers of a creditor without the director’s written consent. Attorney services are excluded from some filing and fee rules.

Fee caps on credit cards

Returned payments cost at most $25. If your revolving balance is over the limit by more than $100, the over‑limit fee can be up to $25 for that cycle. Each transaction fee is capped at the greater of 2% of the transaction or $10. A skip‑a‑payment service can cost up to $25 only with your signed acknowledgment and not if a late fee applies or the loan earns a prepayment rebate. An optional expedited payment can cost up to $10 only if you request it and the amount is disclosed; no expedited fee if a late fee applies.

How retail credit is calculated

Cash price can include sales, excise, or documentary fees, delivery or service charges, and title or registration fees the seller pays. Amount financed equals the cash price minus your down payment, plus any trade‑in payoff and listed fees that are not in the cash price. When debts are joined, payments apply first to earlier sales for non‑revolving accounts, and to fees then debts in entry order for revolving accounts; same‑day debts pay the smallest first. You can keep paying the original seller or lessor until you get clear notice and proof of an assignment. Consumer credit and consumer credit insurance are defined so you know which products are covered.

Refinancing and rolling balances in

You and your lender can agree to refinance a loan’s unpaid balance. The new finance charge must stay within legal rate limits. You can also agree to move an unpaid balance from a loan or a credit sale into a revolving account, which can change how interest and fees are charged.

Retail credit fee caps and options

For sales after June 30, 2020, prepaid finance fees are capped at $75 (to $2,000 financed), $150 (over $2,000–$4,000), and $200 (over $4,000). Delinquency fees are capped at $5 when payments are due every 14 days or less, and $25 when due every 15 days or more (for agreements after June 30, 2019). Sellers may charge some extra fees, like up to $25 for a returned payment, up to $25 to skip a payment, and up to $10 for an expedited payment you request, with required disclosures and limits. Some charges (like GAP or insurance) must meet strict choice, coverage, and refund rules.

Which consumer loans these rules cover

The law explains which loans are covered. It applies to consumer loans and some supervised loans and lists which rules reach consumer‑related loans. Some licensing rules also apply to consumer credit sales that are subordinate‑lien mortgage transactions.

Home loan rules repealed; fund aid

Starting July 1, 2026, the state repeals the Mortgage Rescue Protection Fraud law and the Home Loan Practices chapter. Those named protections and remedies are removed. The consumer protection assistance fund can still pay qualifying people in cases under listed consumer statutes, and its money does not revert.

Which home service deals are exempt

Beginning July 1, 2026, many items are exempt from the residential real estate service‑agreement rules. Examples include home warranties, insurance, HOA or condo documents, mortgages and commitments, certain liens, utilities, and land contracts. Deals made before March 15, 2024 are also excluded. This narrows which products get those consumer protections.

Stricter rules for wage assignments

From July 1, 2026, a wage assignment is valid only if it is written and signed, revocable in writing, agreed to by the employer in writing, and a signed copy is delivered to the employer within 10 days. Assignments are allowed only for the listed purposes, including some payments to firms regulated by consumer‑credit law.

Mortgage licensing and renewals through NMLS

Mortgage lenders must use the NMLS to apply and renew each year by December 31. You must keep required bonds, file call reports, pay fees, certify you still meet standards, and report material changes. You must quickly correct application errors and send surety bond notices through the NMLS. Electronic filings count as originals. The director may charge a reasonable NMLS processing fee and must review audited NMLS financials. If renewal is 60 days late, the license can be suspended or revoked, with a path to reinstatement or appeal. Surety bonds are payable for the benefit of the state and Indiana residents who got services from the bonded creditor.

Opt in to rules or set any charge

Parties to a sale that is not a consumer credit sale can sign a written agreement to use consumer credit‑sale protections. Once signed, the deal is treated as a consumer credit sale. For sales that are not consumer credit or consumer‑related sales, the buyer and seller may agree to any credit service charge.

Who is covered and when to notify

Sections 1–16 apply to people who make or solicit consumer credit sales, leases, and loans, and to those who collect or enforce those debts. If you run a covered credit business in Indiana, file a notification within 30 days after you start and then each year. Include your legal and trade names and all Indiana locations. Tell the Department within 30 days if you change name or address, open or close a branch, file bankruptcy, face revocation or suspension actions, or have a related felony conviction.

Who must be licensed to originate mortgages

If you regularly take mortgage applications or negotiate terms for pay, you are a mortgage loan originator and may need a license. Clerical staff like processors and underwriters are not originators if they only do support work under a licensed person. When the director requests it, you must give fingerprints and pay background‑check fees, and pay for a credit report and submit personal history in the NMLS form. The director may consider bankruptcies in the last 10 years and foreclosures in the last 3 years. Your unique originator ID must appear on mortgage application forms and other required documents.

Card payments add a processing fee

Beginning July 1, 2026, the department may accept credit or debit cards for its fees and penalties. It may charge a uniform fee to cover the card vendor’s processing cost. Your liability is not finally discharged until the department receives payment or credit from the processor.

New licensing and checks for lenders

The director may require all license applications and renewals to go through the NMLSR and can assign unique IDs. The department accepts electronic filings as original records and must act on license applications; you must amend filings if they become materially wrong. Before a license is issued, the department must find the company and key people have the training, experience, finances, and character to run the business fairly. The director may require FBI background checks, fingerprints, and credit reports, and the individual must pay those fees. The director may also report significant or repeat non‑mortgage consumer‑loan violations and complaints to the NMLSR.

Card fees for business filings

Starting July 1, 2026, the secretary of state accepts electronic filings and card payments. If you pay by card, you may be charged a vendor fee up to the highest card charge the state paid in the last period.

Credit law updates and recodification

Starting July 1, 2026, the law updates cross‑references and says that if this chapter conflicts with IC 26‑1‑9.1, that law controls. The state recodifies criminal offenses tied to consumer lending and mortgage fraud. Regulators can coordinate on investigations; the trust‑law lender definition is broadened. Two conformity defenses are repealed. The law also clarifies which older contracts past amendments covered.

Who counts as a loan broker

Beginning July 1, 2026, supervised financial organizations and certain licensed creditors are not treated as loan brokers. If you are licensed (or must be) and you perform loan broker activities, the department may examine your transactions, work with the securities division, and charge examination fees.

Who needs a license for second mortgages

Some banks, their subsidiaries, and credit‑union service groups can make subordinate‑lien mortgages without a mortgage license. Certain collection agencies and Farm Credit‑regulated institutions can take assignments or collect without a license. Others who make, assign, or collect these loans must hold a mortgage license. Mortgage loan originators must be employed or sponsored by a licensed creditor or exempt person registered with the NMLSR.

Sponsors & Cosponsors

Sponsor

Scott Baldwin
Republican • Senate

Cosponsors

Jake Teshka
Republican • House
Lonnie Randolph
Democratic • Senate

Roll Call Votes

All Roll Calls

Yes: 182 • No: 2

Senate vote • 2/25/2026

Roll Call 278 on SB0169.03.COMH.CON01

Yes: 46 • No: 0 • Other: 3

House vote • 2/23/2026

Roll Call 305 on SB0169.03.COMH

Yes: 93 • No: 1 • Other: 1

Senate vote • 1/22/2026

Roll Call 53 on SB0169.02.COMS

Yes: 43 • No: 1 • Other: 3

Actions Timeline

Signed by the Governor
3/5/2026Senate
Public Law 115
3/5/2026Senate
Signed by the Speaker
2/27/2026House
Signed by the President of the Senate
2/27/2026Senate
Signed by the President Pro Tempore
2/27/2026Senate
Senate concurred with House amendments; Roll Call 278: yeas 46, nays 0
2/25/2026Senate
Motion to concur filed
2/24/2026Senate
Returned to the Senate with amendments
2/24/2026House
Third reading: passed; Roll Call 305: yeas 93, nays 1
2/23/2026House
Second reading: ordered engrossed
2/19/2026House
Committee report: amend do pass, adopted
2/17/2026House
First reading: referred to Committee on Financial Institutions
1/28/2026House
Referred to the House
1/23/2026Senate
House sponsor: Representative Teshka
1/22/2026Senate
Third reading: passed; Roll Call 53: yeas 43, nays 1
1/22/2026Senate
Second reading: ordered engrossed
1/20/2026Senate
Senator Randolph added as coauthor
1/15/2026Senate
Committee report: amend do pass, adopted
1/15/2026Senate
Authored by Senator Baldwin
1/5/2026Senate
First reading: referred to Committee on Insurance and Financial Institutions
1/5/2026Senate

Bill Text

Enrolled Senate Bill (S)
PDF
Introduced Senate Bill (S)
PDF
Senate Bill (H)
PDF
Senate Bill (S)
PDF

Related Bills

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