Tennessee House Bill HB1062

Tennessee 2023-2024 Regular Session

• Introduced: 1/31/23
• Refer: 2/27/24
• Refer: 3/19/24
• Refer: 3/26/24
• Chaptered: 5/9/24
• Passed: 5/9/24

Caption

AN ACT to amend Tennessee Code Annotated, Title 4; Title 39; Title 45; Title 47 and Title 48, relative to financial institutions.

Impact

If enacted, this bill impacts the regulations surrounding financial institutions by modifying existing laws regarding credit union operations. By permitting credit unions to acquire loan interests without requiring borrower membership, it can potentially increase the volume of loans available to consumers. This aligns with broader efforts to promote financial inclusivity and competition within the banking sector, as it provides more opportunities for individuals to access funds through multiple institutions.

Summary

House Bill 1062 aims to amend the Tennessee Code Annotated to facilitate certain transactions involving credit unions. Specifically, the bill allows state-chartered credit unions to purchase a participation interest in a loan from various eligible organizations, including banks and other credit unions, without necessitating membership of the borrower. This legislative change is framed as a way to enhance the ability of credit unions to engage in lending activities, ultimately broadening access to financial resources for individuals who may not be members of those credit unions.

Sentiment

The sentiment surrounding HB 1062 has generally been supportive among pro-business and financial service advocates who see it as a means of fostering greater competition among financial institutions. Supporters argue that it simplifies the lending process and makes it more accessible for the community. Nonetheless, there may be concerns from certain sectors about ensuring that this does not undermine the safety and soundness of financial institutions or lead to predatory lending practices.

Contention

Notable points of contention related to HB 1062 may involve debates about the implications of loosening restrictions on lending for credit unions. Proponents of the bill argue it would encourage flexibility and adaptability within the financial landscape. However, critics may raise concerns about the regulatory oversight of such transactions and the potential risks associated with increased participation of non-members in credit union lending practices, emphasizing a need for careful implementation and monitoring.