HOUSE BILL 772
By Powers
SENATE BILL 766
By Bailey
SB0766
002720
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AN ACT to amend Tennessee Code Annotated, Title 56,
Chapter 37, relative to premium finance
companies.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 56-37-109, is amended by deleting
subdivision (4) and substituting:
(4)
(A) A licensee may also impose and collect a convenience fee from any
insured paying by credit card, debit card, electronic funds transfer, electronic
check, or other electronic means in order to offset actual costs incurred by a
licensee in accepting and processing payments made by electronic means.
(B)
(i) A convenience fee collected by a licensee pursuant to this
subdivision (4) must not exceed the actual costs incurred by the licensee;
provided, that, a licensee may impose a convenience fee in lieu of the
actual cost of the individual payment type that does not exceed the
average of the actual cost incurred for the various types of electronic
payments for which the licensee imposes a convenience fee.
(ii)
(a) As used in subdivision (4)(B)(i), "actual cost" means
actual third-party costs incurred for the processing of payments
made by electronic means.
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(b) For purposes of determining actual costs as defined in
subdivision (4)(B)(ii)(a), if a licensee is a subsidiary of an entity
that processes payments made by electronic means, then the
costs incurred by the licensee's parent entity are third-party costs.
(C) A licensee charging a convenience fee pursuant to this subdivision
(4) shall notify the insured of the amount of the fee prior to completing a
transaction, provide an opportunity for the insured to cancel the transaction
without incurring a fee, and make available the option to make a payment on a
loan by check, cash, or money order directly to the licensee without the
imposition of a convenience fee for a card payment or electronic payment.
(D) When an insured elects to make a payment to the licensee by credit
card, debit card, electronic funds transfer, electronic check, or other electronic
means and a convenience fee is imposed and collected pursuant to this
subdivision (4), the payment of the convenience fee is not refundable.
(E) The convenience fee described in this subdivision (4) may be
charged in addition to all other interest and fees allowed by law.
(F) A licensee shall not charge a convenience fee on any debit card or
prepaid card transaction if the payment card network on which the transaction is
initiated or processed prohibits such convenience fee by contract, rule, or policy.
(5) Licensees may also charge and collect from the insured, through regular
billing procedure or otherwise, a handling charge pursuant to ยง 47-29-102 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 a bank or other
depository institution given by any person in full or partial repayment of a loan or other
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extension of credit if the instrument is not paid or dishonored by the institution; provided,
that a licensee:
(A) May redeposit the instrument with the institution or return the
dishonored instrument to the insured or person to whom the credit was extended
upon redemption of the instrument; and
(B) Shall not collect more than one (1) handling charge on any one (1)
check or electronic debit authorization.
(6) The charges referred to in this section must not be considered directly or
indirectly in determining whether a violation of usury laws has occurred under a premium
finance agreement.
SECTION 2. This act takes effect upon becoming a law, the public welfare requiring it.