In a January 28, 2010 opinion, Midwest Title Loans, Inc. v. Mills, the Seventh Circuit has affirmed a permanent injunction issued by the district court invalidating a section of Indiana’s version of the Uniform Consumer Credit Code for violating the Commerce Clause of the U.S. Constitution.
Indiana added a provision to the Code in 2007 called the “territorial application” provision. It states that a loan is deemed to occur in Indiana if a resident of the state “enters into a consumer sale, lease or loan transaction with a creditor … in another state and the creditor …has advertised or solicited sales, leases, or loans in Indiana by any means ….” If the territorial application provision is triggered, the lender becomes subject to the Code and is bound by its restrictions, including a ceiling on the annual interest rate that a lender may charge.