2023 Indiana Code › Title 28. Financial Institutions › Article 11. Department of Financial Institutions › Chapter 3. Supervision of Financial Institutions › 28-11-3-6. Federal Preemption; Exemption of State Chartered Entities and Subsidiaries From Provisions of State Law

Sec. 6. (a) As used in this section:
(1) "federally chartered" means an entity organized or reorganized under the law of the United States; and
(2) "state chartered" means an entity organized or reorganized under the law of Indiana or another state.
(b) If the department determines that federal law has preempted a provision of IC 24, IC 26, IC 28, IC 29, or IC 30, the provision of IC 24, IC 26, IC 28, IC 29, or IC 30 applies to a state chartered entity only to the same extent that the department determines the provision is applicable to the:
(1) same; or
(2) functionally equivalent;
type of federally chartered entity.
(c) A state chartered entity seeking an exemption from a provision of IC 24, IC 26, IC 28, IC 29, or IC 30 based on the preemption of the provision as applied to a federally chartered entity shall submit a letter to the department:
(1) describing in detail; and
(2) documenting the federal preemption of;
the provisions from which it seeks exemption. If available, copies of relevant federal law, regulations, and interpretive letters must be attached to the letter submitted by the requesting entity.
(d) The department shall notify the requesting entity of the department's receipt of the request not later than ten (10) business days after the department's receipt of a letter described in subsection (c). Except as provided in subsection (e), upon receipt of the notification, the requesting entity may operate as if it is exempt from the provision of IC 24, IC 26, IC 28, IC 29, or IC 30 ninety (90) days after the date on which the department receives the letter, unless otherwise notified by the department. This period may be extended for an additional ninety (90) days if the department determines that the requesting entity's letter raises issues requiring additional information or additional time for analysis. If the department extends the period for the department's review of the request, the requesting entity may operate as if the requesting entity is exempt from a provision of IC 24, IC 26, IC 28, IC 29, or IC 30 during the extended period of review only if the requesting entity receives prior written approval from the department. However:
(1) the department must:
(A) approve or deny the requested exemption; or
(B) convene a hearing;
not later than ninety (90) days after the department receives the requesting entity's letter, unless the department has extended the period for the department's review under this subsection; and
(2) if a hearing is convened, the department must approve or deny the requested exemption not later than ninety (90) days after the hearing is concluded.
(e) The department may refuse to exempt a requesting entity from a provision of IC 24, IC 26, IC 28, IC 29, or IC 30 if the department finds that any of the following conditions apply:
(1) The department determines that a described provision of IC 24, IC 26, IC 28, IC 29, or IC 30 is not preempted for a federally chartered entity of the:
(A) same; or
(B) functionally equivalent;
type.
(2) The extension of the federal preemption in the form of an exemption from a provision of IC 24, IC 26, IC 28, IC 29, or IC 30 to the requesting entity would:
(A) adversely affect the safety and soundness of the requesting entity; or
(B) result in an unacceptable curtailment of consumer protection provisions.
(3) The failure of the department to provide for the exemption from a provision of IC 24, IC 26, IC 28, IC 29, or IC 30 will not result in a competitive disadvantage to the requesting entity.
(f) The operation of a financial institution in a manner consistent with exemption from a provision of IC 24, IC 26, IC 28, IC 29, or IC 30 under this section is not a violation of any provision of the Indiana Code or rules adopted under IC 4-22-2.
(g) If a financial institution is exempted from the provisions of IC 24, IC 26, IC 28, IC 29, or IC 30 in compliance with this section, the department shall do the following:
(1) Determine whether the exemption shall apply to all financial institutions that, in the opinion of the department, possess a charter that is:
(A) the same as; or
(B) functionally the equivalent of;
the charter of the exempt institution.
(2) For purposes of the determination required under subdivision (1), ensure that applying the exemption to the financial institutions described in subdivision (1) will not:
(A) adversely affect the safety and soundness of the financial institutions; or
(B) unduly constrain Indiana consumer protection provisions.
(3) Issue an order published in the Indiana Register that specifies whether the exemption applies to the financial institutions described in subdivision (1).
(h) If the department denies the request of a financial institution under this section for exemption from Indiana Code provisions that are preempted for federally chartered institutions, the requesting institution may appeal the decision of the department to the circuit court, superior court, or probate court of the county in which the principal office of the requesting institution is located.
(i) If the department determines that federal law has preempted a provision of IC 24, IC 26, IC 28, IC 29, or IC 30 as the provision applies to an operating subsidiary of a federally chartered entity, the provision of IC 24, IC 26, IC 28, IC 29, or IC 30 applies to a qualifying subsidiary (as defined in IC 28-13-16-1) of a state chartered entity only to the same extent that the department determines the provision applies to the operating subsidiary of:
(1) the same; or
(2) the functionally equivalent;
type of federally chartered entity. In determining whether to extend the exemption from a provision of IC 24, IC 26, IC 28, IC 29, or IC 30 to a qualifying subsidiary (as defined in IC 28-13-16-1) of a state chartered entity under this subsection, the department shall use the procedures and undertake the considerations described in this section for a preemption determination with respect to a state chartered entity.
As added by P.L.73-2004, SEC.41. Amended by P.L.141-2005, SEC.21; P.L.84-2016, SEC.128.