HOUSE BILL 256
By Shepard
AN ACT to amend Tennessee Code Annotated, Title 45, Chapter
5, Part 1 and Title 45, Chapter 5, Part 4, relative to
industrial loan and thrift companies.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Title 45, Chapter 5, Part 4, is amended by
adding the following new section:
(a) When the loan is made, there shall be delivered to the borrower, or, if there
are two (2) or more borrowers, to one (1) of them, a written statement or copy of the loan
contract showing in clear and distinct terms:
(1) The name and address of the lender and of one (1) of the borrowers;
(2) The date of the loan contract;
(3) The schedule of installments or description thereof;
(4) The type of any instrument securing the loan;
(5) The principal amount of the loan excluding interest;
(6) The rate or amount of interest as the contract may provide;
(7) That the borrower may prepay the loan in whole or in part at any time,
and in case interest has been added to the principal of the loan; and
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(8) That the interest is subject to statutory refund requirements if the loan
is prepaid in full.
(b) A receipt shall be given for the amount of each payment made in currency.
Any note paid in full shall be so marked and returned, and any security interest that no
longer secures a loan shall be restored, canceled or released.
SECTION 2. Tennessee Code Annotated, Title 45, Chapter 5, Part 1, is amended by
adding the following new section:
A person, firm or corporation may not print, publish, distribute or cause the same
to be done in any manner whatsoever, any written or printed statement with regard to
interest or charges, terms or conditions for the lending of money which is false or
calculated to deceive.
SECTION 3. Tennessee Code Annotated, Title 45, Chapter 5, Part 4, is amended by
adding the following new section:
The commissioner may prepare schedules that may be used by an authorized
lender under this chapter for the repayment of a loan made under this chapter by
weekly, biweekly, semimonthly or monthly installments.
SECTION 4. This act shall take effect upon becoming a law, the public welfare
requiring it.
FISCAL NOTE
HB 256 - SB 180
February 25, 2003
SUMMARY OF BILL: Amends the Industrial Loan and Thrift Companies
Act by:
1. Requiring that industrial loan and thrift companies provide borrower(s)
with a copy of the loan contract disclosing in clear and distinct terms the
name and address of the lender and borrowers, the contract date, the
installment schedules, the type of any instrument securing the loan, the
loan's principal without interest, the interest, the right to prepayment, and
a statement that the interest is subject to statutory refund requirements if
the loan is prepaid.
2. Prohibiting an industrial loan and thrift company from distributing any
false or deceptive statement regarding terms for lending money, and
3. Authorizing the Commissioner of Financial Institutions to prepare loan
repayment schedules.
ESTIMATED FISCAL IMPACT:
Increase State Expenditures - Not Significant
Assumes the Department of Financial Institutions can utilize existing
resources to implement provisions of this bill.
CERTIFICATION:
This is to duly certify that the information contained herein is true and
correct to the best of my knowledge.
James A. Davenport, Executive Director