SB 766 - HB 772
FISCAL NOTE
Fiscal Review Committee
Tennessee General Assembly
February 27, 2025
Fiscal Analyst: Elizabeth Bransford | Email: elizabeth.bransford@capitol.tn.gov | Phone: 615-741-2564
SB 766 - HB 772
SUMMARY OF BILL: Authorizes a premium finance company licensee (licensee) to
impose and collect a convenience fee from any insured paying by credit card, debit card, electronic
funds transfer, electronic check, or other electronic means to offset costs incurred by the licensee in
accepting and processing payments made by such means. Prohibits such fee from exceeding the
actual costs incurred by the licensee, but allows a convenience fee to be charged in lieu of the cost of
the payment type that does not exceed the average of the actual cost incurred across the various
electronic payment methods. Requires a licensee charging such fee to notify the insured of the
amount of the fee prior to completing the transaction, provide the insured an opportunity to cancel
the transaction without incurring a fee, and make available the option to make a loan payment by
check, cash, or money order without the imposition of a convenience fee for a card or electronic
payment.
Clarifies that the payment of a convenience fee is not refundable and is to be charged in addition to
all other interest and fees applicable to the loan. Prohibits a licensee from charging a convenience
fee on any debit card or prepaid card transaction if the payment card network processing the
transaction prohibits convenience fees by contract, rule, or policy. Authorizes licensees to charge
and collect from the insured a handling charge for certain invalid instruments given by any person in
repayment of a loan or other credit extension; provided, that a licensee (1) may redeposit or return
the instrument with the institution, insured, or person to whom the credit was extended, and (2)
shall not collect more than one handling charge on any one check or electronic debit authorization.
FISCAL IMPACT:
NOT SIGNIFICANT
Assumptions:
• Pursuant to Tenn. Code Ann. § 56-37-109, no licensee may charge premium loan charges
other than or in amounts greater than the following:
o In the case of the precomputed loan, a service charge in an amount equal to four
percent of the total amount of the loan not exceeding $15 and payable only once
per calendar year per premium loan account;
o In the case of a premium finance agreement, a one-time delinquency charge of $2 to
a maximum of five percent of the delinquent installment that is in default for 10
days or more. If the default results in the cancellation, a charge of $5 may be
permitted in certain circumstances; and
o In certain circumstance, in the case of a premium finance agreement for payment of
collection costs, attorney’s fees equal to 15 percent of the outstanding indebtedness
and any other charges that arose because a party breached the contract.
SB 766 - HB 772 2
• The proposed legislation authorizes a licensee to impose and collect convenience fees for
the electronic payment processing of loan payments.
• It further authorizes a licensee to charge handling charges for a draft, check, electronic
funds transfer, electronic check, card payment, or any other electronic payment, negotiable
order of withdrawal, or like instrument drawn on the bank or other depository institution
given by any person in repayment of an extension of credit if the instrument is not paid or
is dishonored by the institution.
• Pursuant to Tenn. Code Ann. § 47-29-102, when any check, draft, or order is not paid by
the drawee because the maker or drawer did not have an account with or sufficient funds
on deposit with the financial institution, or the draft, check, or order has an incorrect or
insufficient signature, the financial institution is authorized to assess a handling charge in an
amount not to exceed $30.
• Based on information provided by the Department of Financial Institutions (DFI),
authorizing licensees to impose certain charges will not change the fees assessed by DFI or
significantly impact operations.
• Therefore, any fiscal impact is estimated to be not significant.
IMPACT TO COMMERCE:
OTHER COMMERCE IMPACT
The extent of business revenue increase cannot be quantified with reasonable certainty.
Assumptions:
• A convenience fee collected by a licensee must not exceed actual third-party costs incurred
for the processing of payments made by electronic means; therefore, the net impact to
business revenue is considered not significant.
• The extent of any business revenue increase for licensees assessing handling charges for
electronic transactions cannot be determined with reasonable certainty.
• There will not be a significant impact to jobs in this state.
CERTIFICATION:
The information contained herein is true and correct to the best of my knowledge.
Bojan Savic, Executive Director