2026 Legislative Session Summary

The Indiana General Assembly concluded its work for the 2026 legislative session at the end of the February, wrapping up a fast-paced and highly compressed schedule. With more than 700 bills introduced, lawmakers focused on targeted policy changes affecting taxation, housing supply, financial services and emerging technologies. Throughout the session, the Indiana Bankers Association worked closely with legislators to ensure that new laws support a safe, competitive and innovative banking environment for Indiana’s communities.

Fast and Furious

Unlike a budget year, the shorter session required legislators to prioritize issues with more immediate or narrow scope. Despite the condensed timeline brought about by an unsuccessful redistricting push in December largely influenced by President Donald Trump, the General Assembly advanced several proposals with meaningful implications for Indiana’s banking industry and the broader economy.

The IBA maintained an active presence at the Statehouse throughout the session, working closely with legislators and regulators to provide industry expertise and advocate for sound policy. Grassroots engagement from bankers across the state – including meetings, testimony and direct outreach – remained critical in shaping legislative outcomes and ensuring policymakers understand the essential role banks play in supporting Indiana’s economy.

Key Legislative Proposals

Housing policy was a major theme with direct implications for the industry. Legislation aimed at increasing housing supply, reducing zoning restrictions, and encouraging development were prevalent this session. HEA 1001, one of the House’s priority bills, revised the allocation of money available for making loans from the Residential Housing Infrastructure Assistance Revolving Fund. The bill limited local government restrictions on local zoning and housing rules with the goal of making it easier to build. It provides that certain housing must be automatically approved, caps parking requirements and requires multi-family or mixed-use residential developments to be permitted in commercial zones. In addition, an amendment expanded the Housing TIF expiration timeline from 20 years to 25 years.

HEA 1210 makes wide-ranging changes to Indiana’s tax and non-tax statutes, spanning more than 400 pages of legislative updates. While much of the bill addresses technical and administrative matters, several provisions are notable for financial institutions. These include updates to draining law affecting project financing, revisions to redevelopment tax credit repayment provisions and new requirements related to title transfers for mobile homes. The legislation also modernizes notice requirements by allowing publication through specified media and increases transparency by requiring municipal entities to publicly post contracts with municipal advisors. Overall, the bill reflects a board effort to update and streamline statutory processes across multiple areas of state policy.

SEA 169 reorganizes Indiana’s consumer lending statutes by repealing and recodifying several existing laws – including those governing mortgage lending, small loans and home loan practices – into a newly established Title 37 of the Indiana Code. The legislation is largely technical in nature, aligning statutory structure with the General Assembly’s drafting standards and updating cross-references for clarity and consistency. While the bill does not make substantive policy changes, it modernizes and streamlines the organization of Indiana’s consumer lending framework.

Lawmakers considered several pieces of legislation allowing businesses, including financial institutions, to round cash transactions as the penny is phased out. The IBA worked to ensure alignment with federal guidance, maintain optional implementation, and avoid operational disruptions and customer confusion. SEA 243 and HEA 1406 sought to do this by preserving flexibility for financial institutions while allowing modernizations of cash handling practices. The bills also contained provisions aligning Indiana’s tax structure with the One Big Beautiful Bill.

The continued evolution of digital assets remained a key policy topic. Legislation introduced during the session addressed a variety of topics, including regulation of cryptocurrency markets, oversight of digital asset custody and exchanges, and consumer protection measures. Notably, Indiana became the first state in the nation to prohibit operation of virtual currency kiosks with HEA 1116, citing concerns about fraud and consumer harm. The IBA monitored these developments closely to ensure that regulatory frameworks protect consumers, maintain appropriate oversight and preserve the role of regulated financial institutions.

Protecting Banks and Consumers

Just as importantly, the Indiana Bankers Association worked throughout the session to oppose or amend legislation that could have created significant challenges for financial institutions. While many positive policy changes advanced, the IBA’s defensive efforts were critical in preventing proposals that would have disrupted established financial systems, increased compliance burdens, or limited the ability of banks to serve their customers effectively.

One of the most closely watched issues for the banking industry was proposed regulation of interchange fees, HB 1215. This proposal, which has surfaced in multiple states, would have significantly altered how electronic payments are processed, and ultimately placed the universal payment system in jeopardy. The Indiana Bankers Association worked extensively with lawmakers to emphasize the importance of interchange revenue in supporting fraud prevention, payment infrastructure and consumer rewards programs. Ultimately, legislation that would have imposed major changes to interchange structures did not advance.

The session also included discussions around Indiana’s public deposit system. Banks play a critical role in safeguarding taxpayer funds, and policymakers examined potential changes to how public funds are managed. The IBA engaged to ensure that any modifications preserved the safety, reliability and local accessibility of public deposits – particularly for community banks that serve smaller, often underserved, municipalities.

HB 1324 would have created broad new advertising requirements by mandating that all advertised prices include nearly all fees associated with a transaction. While intended to promote pricing transparency, the bill’s expansive language raised concerns for financial institutions. Banking products and services often involve fees that are conditional, usage-based or assessed over time such as overdraft fees, wire transfer fees or account maintenance changes. As drafted, the bill could have created uncertainty around compliance, increased operations complexity and exposed institutions to heightened litigation risk under the Deceptive Consumer Sales Act. The IBA opposed this legislation, and it did not advance out of committee.

SB 85 would have established new requirements related to the collection and repayment of medical debt, including restrictions on wage garnishment and the use of liens on a consumer’s primary residence, as well as mandates for hospital payment plans and financial assistance disclosures. While intended to provide protections for vulnerable consumers, the bill raised concerns for financial institutions due to its broad scope and potential downstream impacts on the credit and collections framework. The IBA worked with lawmakers to clarify definitions and ensure that financial institutions were not unintentionally captured within the scope of the bill. The legislation ultimately did not advance.

HB 1051 would have prohibited health care providers and third parties from reporting medical debt to consumer reporting agencies and required consumer reporting agencies to remove existing medical debt from credit reports upon request. While intended to provide consumer protections, the bill raised concerns due to its potential impact on credit underwriting and risk assessment. Access to comprehensive and accurate credit data is a critical component of responsible lending, and limiting the reporting of certain categories of debt could reduce transparency and create challenges in evaluating a borrower’s ability to repay. The IBA engaged on the legislation, and it ultimately did not advance.

SB 197 would have increased the limitation on garnishment provided in the Uniform Consumer Credit Code from $200 to just over $600 per week in wages. It provides tangible personal property, deposit accounts and cash (but excluding debts owing and income owing) of $1,500 is exempt from bankruptcy (current law is $300). While not directly opposed to the legislation, the IBA raised concerns that the magnitude of the proposed increase may have exceeded what was appropriate.

Successful Session

Overall, the 2026 legislative session was a fast-paced and productive period for Indiana’s banking industry. Despite the compressed timeline, the General Assembly remained focused on target policy changes affecting economic development, financial services and consumer protection.

We extend our sincere thanks to the many lawmakers who took the time to engage with the IBA and consider the perspective of financial institutions. That collaboration helped ensure that enacted legislation reflects both sound policy objectives and the operational realities of financial institutions. Just as importantly, we want to thank our bank members whose grassroots efforts were instrumental in shaping the outcome of key legislation. Your engagement continues to make meaningful impact and reflects the value of consistent engagement and strong relationships.

The 2026 session demonstrated that when Indiana’s banking community speaks with a unified voice, it can help shape balanced, effective policy. From advancing practical updates to financial regulations to opposing proposals that could have disrupted the industry, the IBA’s advocacy produced tangible benefits for its members and the communities they serve.