SENATE BILL 1125
By Yager
HOUSE BILL 1011
By Fritts
HB1011
002425
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AN ACT to amend Tennessee Code Annotated, Title 45
and Title 47, Chapter 18, relative to online
payment systems.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Title 47, Chapter 18, Part 1, is amended by
adding the following as a new section:
47-18-136.
(a) As used in this section:
(1) "Online payment system":
(A) Means an online or mobile system that facilitates the
exchange of currency through the internet, including a money transfer or
payment; and
(B) Does not include an online or mobile system provided by:
(i) A state or national bank;
(ii) A state or federal savings and loan association; or
(iii) A state or federal credit union; and
(2) "User":
(A) Means an individual or entity utilizing an online payment
system; and
(B) Includes an individual or entity that:
(i) Has or does not have an account with the online
payment system; and
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(ii) Uses the online payment system to send money,
receive money, or both.
(b) Except as provided in subsection (c), an operator of an online payment
system shall not freeze the funds of a user without first providing the affected user with
written notice of the online payment system's intent to freeze the user's funds. The
operator shall provide the notice required by this subsection (b) to all users involved in
an affected transaction, including the user attempting to send money and the user who is
the intended recipient of the money.
(c) If an operator of an online payment system has a reasonable belief that
financial exploitation, as defined in § 45-2-1202, may have occurred, may have been
attempted, or is being attempted, or that fraud or a violation of another law or regulation
has occurred or is occurring, then the operator of the online payment system shall
provide notice as described in subsection (b) within thirty (30) days of freezing the funds.
Notice given pursuant to this subsection (c) must be limited or otherwise provided in a
manner that complies with 31 CFR 1022.320 and 31 U.S.C. § 5318, if applicable.
(d) A violation of this section by an online payment system constitutes an unfair
or deceptive act prohibited under § 47-18-104, and is punishable as provided in this part.
SECTION 2. Tennessee Code Annotated, Section 47-18-104(b), is amended by adding
the following as a new subdivision:
( ) A violation of § 47-18-136;
SECTION 3. This act takes effect July 1, 2025, the public welfare requiring it, and
applies to contracts or agreements entered into, amended, or renewed on or after that date.