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PUBLIC CHAPTER NO. 287
HOUSE BILL NO. 743
By Representatives Keisling, Garrett
Substituted for: Senate Bill No. 1078
By Senators Johnson, Yager
AN ACT to amend Tennessee Code Annotated, Title 47, Chapter 18, relative to debt
resolution services.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Title 47, Chapter 18, is amended by adding
the following as a new part:
47-18-5801. Short title.
This part is known and may be cited as the "Debt Resolution Services Act."
47-18-5802. Part definitions.
As used in this part:
(1) "Active consumer" means a consumer for which an agreement to
resolve the consumer's debts has been accepted and who is actively making
payments to resolve the debt;
(2) "Affiliated with" means a dedicated account service provider that
controls, is controlled by, or is under common control with a licensee;
(3) "Agreement" means a contract between a licensee and a consumer
that meets the requirements of§ 47-18-5809;
(4) "Bank" means a financial institution, including a commercial bank,
savings bank, savings and loan association, credit union, mortgage bank, or a
trust company, engaged in the business of banking, that is chartered under
federal or state law and regulated by a federal or state banking regulatory
agency;
(5) "Business address" means the designation of the physical location of
a business, including the name and number of a street;
(6) "Business day" means a calendar day, except for Saturdays, Sundays,
and legal holidays;
(7) "Commissioner" means the commissioner of commerce and
insurance, or the commissioner's designee;
(8) "Consumer" means an individual who has executed an agreement
with a licensee;
(9) "Creditor" means a person that has extended credit to a consumer,
including an agent or assignee of the person;
(10) "Debt resolution services" means a program or service represented,
directly or by implication, to negotiate, settle, or in any way alter the terms of
payment or other terms of the debt between a consumer and one (1) or more
unsecured creditors, including a reduction in the balance, interest rate, or fees
owed by a consumer to an unsecured creditor;
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(11) "Dedicated account" means an account that meets the criteria set
forth in § 47-18-5809(a)(1 )-(5);
(12) "Dedicated account service provider" means an entity that facilitates
transactions authorized by the consumer pursuant to the terms of 16 CFR
310.4(a)(5)(ii);
(13) "Enrolled consumer" means a consumer who is saving in a dedicated
account, but whose creditors have not accepted a reduced amount to resolve the
consumer's debt with the credits;
(14) "Licensee" means a provider of debt resolution services that
possesses a valid license issued pursuant to this part;
(15) "Person" means an individual, group, unincorporated association,
limited or general partnership, corporation, or other business entity;
(16) "Record" means information that is inscribed on a tangible medium or
that is stored in an electronic or other medium and is retrievable in perceivable
form; and
(17) "State" means a state of the United States, including this state, the
District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory
or possession subject to the jurisdiction of the United States.
47-18-5803. License required.
(a) A person shall not provide or offer to provide debt resolution services in this
state unless the person first obtains a license from the commissioner.
(b) A licensee shall obtain a license for the licensee's primary business address.
(c) A license must not be transferred or assigned.
(d) A licensee shall file a surety bond in favor of this state in an amount the
commissioner determines before the licensee may provide or offer to provide debt
resolution services in this state; provided, that the amount of the bond must not be
greater than fifty thousand dollars ($50,000). The surety bond must be in effect during
the period of licensure and for two (2) years after the date the licensee ceases providing
debt resolution services to individuals in this state. The surety bond must have payment
conditioned upon noncompliance with this part by the licensee or the licensee's agent.
(e) A licensee shall not provide debt resolution services in this state under a
business name other than the business name that is listed on the licensee's license;
provided, that a licensee may do business under an assumed name as long as the
licensee registers the assumed name with the secretary of state and provides evidence
of the registration with the commissioner.
47-18-5804. Exempt persons.
(a) The following persons are exempt from this part:
(1) A person organized under § 501 (c) or § 501 (q) of the Internal
Revenue Code (26 U.S.C. § 501 );
(2) Judicial officers, including an individual acting under the direction of a
court;
(3) Banks and the employees of banks;
(4) Attorneys licensed to practice law in this state who provide debt
resolution services within an attorney-client relationship;
(5) Creditors or the employees of creditors who negotiate debt resolutions
with consumers or with licensees acting on behalf of consumers;
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(6) Assignees for the benefit of creditors;
(7) Officers or employees of the United States or any state who perform
debt resolution services on behalf of the federal government, a state, a
municipality, or a state agency, and who receive compensation solely from the
governmental entity;
(8) Certified public accountants licensed in this state who provide debt
resolution services within an accountant-client relationship;
(9) Dedicated account service providers that do not otherwise provide
debt resolution services for consumers; and
(10) Persons, to the extent that the person provides or agrees to provide
debt resolution services to an individual who the person has no reason to know
resides in this state at the time the person agrees to provide the services.
(b) The following persons are exempt from the licensing requirements
established in§ 47-18-5803:
(1) A licensee's employees; and
(2) A person who:
(A) Markets on behalf of a licensee; and
(B) Does not otherwise provide debt resolution services.
47-18-5805. Application for licensure.
(a)
(1) An application for a license or license renewal must:
(A) Be in a form prescribed by the commissioner;
(B) Contain information as the commissioner reasonably requires;
(C) Be accompanied by a reasonable fee established by the
commissioner; and
(D) Be signed under oath.
(2) A license to provide debt resolution services is valid for a period of two
(2) years from the date of issuance.
(b) The following items are required in an application for a license under this part:
(1) Proof of compliance with the Business Tax Act, compiled in title 67,
chapter 4, part 7, and any other requirement imposed by the secretary of state
for an entity to engage in business in this state;
(2) The applicant's name, principal business address, and telephone
number; all business addresses in this state; the principal email address for the
business; and the principal website address to be used for the business;
(3) The name and business address of each executive officer and
member of the board of directors, or equivalent leadership structure, of the
applicant;
(4) A statement describing, to the extent it is known or should be known
by the applicant, any material civil or criminal judgment in any jurisdiction, or any
enforcement action against the applicant, or any of the applicant's executive
officers or members of the applicant's board of directors, or equivalent leadership
structure, by any local, state, or federal governmental agency, in each case
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relating to debt adjusting, debt pooling, prorating, activity as a credit services
organization, unfair and deceptive trade practices, false advertising, this state's
consumer protection law, or any other similar law or regulation;
(5) A copy of each form of agreement and the schedule of fees and
charges that the applicant will use with consumers who reside in this state;
(6) Income statements and balance sheets from the applicant for the two
(2) fiscal years preceding the date of the application; and
(7) Evidence of accreditation or certification by an independent
accrediting or certifying organization approved by the commissioner or by a
national trade group for debt resolution services providers to certify that regular
audits have been completed to assure compliance with federal and state
regulations and with industry best practices.
(c) In connection with an application for license renewal, the licensee shall
provide access to the licensee's books and records with respect to consumers in this
state that are being or have been serviced by the licensee.
(d) The commissioner may participate in a multistate licensing system for the
sharing of regulatory information and for the licensing and application, by electronic or
other means, of entities engaged in the business of debt resolution services. The
commissioner may establish requirements for participation by an applicant in a multistate
licensing system that varies from this part. The applicant shall pay directly to a multistate
licensing system any additional fees relating to participation in the multistate licensing
system.
(e)
(1) The commIssIoner may require each applicant applying for initial
licensure under this part to submit a full set of fingerprints of each of the
applicant's executive officers in order for the commissioner to obtain and receive
national criminal history records from the criminal justice information services
division of the federal bureau of investigation. Unless the commissioner contracts
to obtain criminal history records, or makes use of an existing contract to obtain
criminal history records, pursuant to subdivision (e)(2), the commissioner may
submit each executive officer's fingerprints and the fee required to perform the
criminal history record check to the Tennessee bureau of investigation and the
federal bureau of investigation for state and national criminal history record
checks. The commissioner may require any fingerprints submitted pursuant to
this subsection (e) be provided in an electronic format.
(2) The commissioner may contract, or make use of an existing contract
with this state, for the collection and transmission of fingerprints authorized under
this section. If the commissioner contracts, or makes use of an existing contract,
then the commissioner may order the applicant to pay the fee for collecting and
transmitting fingerprints to the contractor. The commissioner may agree to a
reasonable fingerprinting fee to be charged by the contractor to the applicant.
(3) The commissioner shall treat and maintain any executive officer's
fingerprints and any criminal history record information obtained under this
section as confidential and limit the use of records solely to the purposes
authorized under this section. The fingerprints and any criminal history record
information are not subject to subpoena, other than a subpoena issued in a
criminal action or investigation, and are confidential by law and privileged, and
are not subject to discovery or admissible in evidence in any private civil action.
(4) The commissioner shall refuse to issue an initial license to an
applicant who does not provide fingerprints in compliance with this subsection
(e).
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(f) An applicant or licensee shall notify the commissioner within thirty (30) days
after a material change in any of the information submitted in connection with an
application for a license or license renewal submitted pursuant to this part, including:
(1) A change in the applicant's or licensee's principal place of business;
(2) A merger or dissolution related to the licensee; or
(3) An applicant or licensee pleading guilty to or being convicted of a
felony in a court of competent jurisdiction.
47-18-5806. License issuance or denial.
(a) The commissioner may deny a license if:
(1) The applicant does not satisfy the requirements of§ 47-18-5805;
(2) The application contains information that is materially erroneous or
materially incomplete;
(3) The applicant fails to provide in a timely manner such information as
the commissioner reasonably requests;
(4) An executive officer or member of the board of directors, or equivalent
leadership structure, of the applicant has been convicted of or pied nolo
contendere to:
(A) A felony; or
(B) An act involving fraud, deceit, or dishonesty; or
(5) An executive officer or member of the board of directors, or equivalent
leadership structure, of the applicant has had a professional license revoked,
suspended, or subjected to enforcement action in any state, and the license has
not been reinstated.
(b) The commissioner shall provide to the applicant a written decision and
findings containing the reasons supporting a denial of license issuance or renewal no
later than twenty (20) days after the date of the denial. The applicant may appeal the
denial to the chancery court of Davidson County no later than thirty (30) days after the
applicant's receipt of the written decision denying the license issuance or renewal.
47-18-5807. License suspension, revocation, or denial of renewal.
(a) The commissioner may suspend, revoke, or deny renewal of a license if:
(1) A licensee has violated this part or any rule adopted pursuant to this
part, or another law applicable to the conduct of the licensee's business;
(2) A fact or condition exists that, if it had existed when the licensee
applied for a license, would have warranted the commissioner refusing to issue
the license;
(3) The licensee does not satisfy the criteria required under § 47-18-
5805(b);
(4) The licensee has refused to permit the commissioner to examine the
licensee's books and records, failed to comply with § 47-18-5812, or made a
material misrepresentation or omission in complying with§ 47-18-5812; or
(5) The licensee has not responded within a reasonable time and in an
appropriate manner to the commissioner's communications.
(b) If the commissioner suspends, revokes, or denies renewal of a license, then
the commissioner may require the licensee to make available the licensee's books and
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records with respect to any consumers in this state that are being or have been serviced
by the licensee.
(c) Except as provided in § 47-18-5808, a licensee must receive notice and a
hearing before the commissioner revokes or suspends a license.
(d) A licensee may deliver a written notice to the commissioner to surrender the
licensee's license. However, if a licensee surrenders the licensee's license, the
licensee's civil or criminal liability for acts committed before the surrender is not affected.
(e) Upon a licensee's submission of an application for license renewal and until
such time as an application for license renewal is approved or denied, the licensee may
continue to provide or offer to provide debt resolution services, but a suspension or
denial of a license terminates any right to provide or offer to provide debt resolution
services in this state unless continuation is approved by the commissioner.
47-18-5808. Powers of the commissioner -- Enforcement.
(a) The commissioner may promulgate rules to administer this part, including
rules to establish reasonable fees to be paid by the applicants and licensees for the
expenses of administering this part. The rules must be promulgated in accordance with
the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.
(b) The Uniform Administrative Procedures Act, compiled in title 4, chapter 5,
governs all matters and procedures regarding the hearing and judicial review of any
violation or contested case arising under this part.
(c) If the commissioner finds that a delay in issuing an order under subsection (b)
will irreparably harm the public interest, then the commissioner may summarily suspend
the license pursuant to§ 4-5-320(d).
(d) Any order issued pursuant to this section is subject to review by appeal to the
chancery court of Davidson County.
(e) The commissioner may:
(1) Act on the commissioner's own initiative or in response to complaints;
(2) Receive complaints;
(3) Take action to obtain voluntary compliance with this part;
(4) Refer cases to the attorney general and reporter, a district attorney
general, or another appropriate law enforcement official; and
(5) Seek and provide remedies as provided in this part.
(f) The commissioner may investigate the books, accounts, records, and files of a
licensee or any other person that the commissioner has reason to believe is providing or
offering to provide debt resolution services in this state.
47-18-5809. Prerequisites and permitted practices for providing debt resolution
services.
(a) A licensee may request or require a consumer, as a condition to the provision
of debt resolution services, to establish and place funds into a dedicated account
administered by a dedicated account services provider; provided, that:
(1) The funds are held in a federal deposit insurance corporation insured
bank;
(2) The consumer owns the funds held in the account, including all
accrued interest on the account, if any;
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(3) The dedicated account service provider is not owned or controlled by,
or affiliated with, the debt resolution services provider. For purposes of this
subdivision (a)(3), "control" means the direct or indirect possession of the power
to direct or cause the direction of the management of a licensee, whether by
contract or through ownership of more than twenty percent (20%) of the voting
securities of the licensee;
(4) The dedicated account service provider does not give or accept any
money or other compensation in exchange for referrals of business involving the
debt resolution services;
(5) The consumer may terminate the debt resolution services at any time
without penalty by giving notice as required in§ 47-18-5810(a), and thereafter,
the licensee shall notify the dedicated account services provider of the
consumer's termination within five (5) business days of receipt of the consumer's
notice of intent to terminate debt resolution services; and
(6) The agreement discloses the criteria set forth in subdivisions (a)(1 )-
(5).
(b) A licensee shall, at the time an agreement is executed by a consumer, or as
shortly thereafter as practicable, distribute or otherwise make available to the consumer
a copy of the executed agreement. For purposes of this part, electronic distribution of an
executed agreement is permitted if the consumer agrees.
(c) The agreement with the consumer must disclose:
(1) The services that the licensee will perform;
(2) The methodology the licensee will use to calculate fees to be charged
for debt resolution services and, if known or if the information to calculate the fee
is reasonably available, at the time the agreement is executed, the fees that the
licensee will charge;
(3) The amount of time estimated on a good faith basis to be necessary to
achieve the resolution of all enrolled debts, and to the extent that the service may
include a resolution offer to any of the consumer's creditors, the time estimated
on a good faith basis when the debt resolution services provider will make a bona
fide resolution offer to each creditor;
(4) To the extent that the debt resolution services provider may include a
resolution offer to any of the consumer's creditors, the amount of money or the
percentage of each outstanding debt that the consumer must accumulate before
the debt resolution services provider will make a bona fide resolution offer to
each creditor;
(5) That debt resolution services may not be suitable for all individuals;
(6) To the extent that any aspect of the debt resolution services relies
upon or results in the consumer's failure to make timely payments to creditors,
that the consumer's failure to pay the consumer's debts will likely adversely affect
the consumer's creditworthiness, may result in the consumer being subject to
collection efforts, including lawsuits by creditors, and may increase the amount of
money the consumer owes due to the accrual of fees and interest;
(7) That, unless the consumer is insolvent, if a creditor resolves a debt for
less than its full amount, the resolution may result in the creation of taxable
income to the consumer, even though the consumer does not receive any
money;
(8) That specific results cannot be predicted or guaranteed and the
licensee cannot require a creditor to negotiate or resolve a debt;
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(9) That debt resolution services programs require an individual to meet
regular savings goals in order to enable resolutions;
(10) That the licensee does not provide tax, accounting, or legal advice to
an individual, unless the licensee is licensed in this state to provide such advice;
(11) That the licensee is the consumer's advocate and does not receive
compensation from creditors for providing debt resolution services to the
consumer;
(12) That the licensee does not make monthly or other payments to the
consumer's creditors;
(13) The list of debts that the agreement covers; and
(14) That, if applicable, the consumer's rights are subject to mandatory
arbitration of any and all disputes with the debt resolution services provider.
(d) A licensee shall maintain a toll-free telecommunications system, staffed at a
level that has adequate capacity to accept requests from the reasonably anticipated
volume of consumers contacting the licensee during ordinary business hours.
(e) A licensee may extend credit to a consumer in the form of a deferral of some
or all of the licensee's fee for resolving the consumer's debts, at no additional expense to
the consumer. A licensee may assist in arranging credit to the consumer if the credit is
extended to the consumer by or through a person that is either separately licensed or
authorized to perform lending in this state, or exempt from licensure.
47-18-5810. Consumer's right to terminate agreement.
(a) A consumer may terminate an agreement at any time without penalty by
notifying the licensee electronically, in writing, or telephonically on a recorded line.
(b) Within two (2) business days of receipt of a consumer's notice of termination,
a licensee shall advise the consumer of the effect, if any, a termination of the consumer's
debt resolution services program would have on a previously negotiated installment
resolution agreement and any pending resolution negotiations. Not later than five (5)
business days following the delivery of the advice, and absent further instruction from
the consumer, a licensee shall notify the dedicated account service provider of the
consumer's termination and request that the dedicated account service provider
communicate with the consumer regarding disposition of all funds held in the dedicated
account.
(c) Notwithstanding the consumer's right to terminate as set forth under
subsection (a), the licensee is entitled to recover all fees earned prior to the receipt of a
termination notice; provided, that the fee is requested or received in compliance with §
47-18-5813.
47-18-5811. Licensee's right to terminate agreement.
If a consumer fails to fulfill the consumer's contractual obligations on or before
the sixth day after the consumer was required to fulfill the obligations, then the licensee
may terminate its agreement with the consumer in writing, including electronically. If the
licensee terminates the agreement in accordance with this section, then the consumer
does not owe any further payment to the licensee as of the date the licensee terminates
the agreement, other than for the fees previously earned by the licensee.
Notwithstanding this part, if a consumer refuses to pay any fee to a licensee after the
payment has been earned by the licensee, then the licensee may, upon proper notice to
the consumer in writing, which may be provided electronically, terminate the licensee's
agreement with the consumer immediately.
47-18-5812. Annual reports.
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(a) A licensee shall file with the commissioner an annual report, under oath, that
includes the following information for the calendar year reporting period:
(1) Total number of active consumers in this state;
(2) Total number of enrolled consumers in this state; and
(3) The total fees collected in this state.
(b) If a licensee does not file an annual report as required under subsection (a),
or does not amend a filed report on or before the thirtieth day after the commissioner
provides notice to the licensee that the licensee's filed annual report requires
amendment, then the commissioner may assess civil penalties against the licensee and
suspend, revoke, or refuse to renew the licensee's license.
47-18-5813. Fees for debt resolution services.
(a) A licensee shall not impose, directly or indirectly, a fee or other charge on a
consumer, or receive payment from or on behalf of a consumer, for performing debt
resolution services, except as provided in this section.
(b) A licensee shall not request or receive payment of any fee or consideration
for any debt resolution services unless:
(1) The licensee and the consumer have signed an agreement that
complies with§ 47-18-5809;
(2) The licensee has renegotiated, resolved, reduced, or otherwise
altered the terms of at least one (1) debt pursuant to a resolution agreement or
other such valid contractual agreement executed by the consumer and the
creditor;
(3) The consumer has made at least one (1) payment pursuant to the
resolution agreement or other valid contractual agreement between the
consumer and the creditor; and
(4) To the extent that debts enrolled in a service are renegotiated,
resolved, reduced, or otherwise altered individually, the fee or consideration
either:
(A) Bears the same proportional relationship to the total fee for
renegotiating, resolving, reducing, or altering the terms of the entire debt
balance as the individual debt amount bears to the entire debt amount.
The individual debt amount and the entire debt amount are those owed at
the time the debt was enrolled in the service; or
(B) Is a percentage of the amount saved as a result of the
renegotiation, resolution, reduction, or alteration. The percentage charged
cannot change from one (1) individual debt to another. The amount saved
is the difference between the amount owed at the time the debt was
enrolled in the service and the amount actually paid to satisfy the debt.
(c) Any fee or other charge imposed by or on behalf of a dedicated account
service provider in connection with the administration of a dedicated account is not a fee
or other charge imposed for performing debt resolution services for purposes of this part.
(d) Any fee or other charge imposed by or on behalf of a third-party legal service
provider is not a fee or other charge imposed by a licensee for performing debt
resolution services for purposes of this part.
47-18-5814. Prohibitions.
(a) A licensee, a person who markets debt resolution services on behalf of a
licensee, or a person described in§ 47-18-5804(b)(2) shall not:
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(1) Take or exercise a power of attorney that authorizes the licensee to
resolve a debt. For purposes of this subdivision (a)(1 ), "resolve" means entering
into a binding agreement to discharge in full a debt in exchange for a payment of
a sum certain of money;
(2) Send to a creditor a cease and desist notice, or require a consumer to
notify a creditor of changes of address or phone number in order to divert
communication from the creditor to the debt resolution services provider rather
than the consumer;
(3) Exercise or attempt to exercise any authority of the consumer after a
licensee has received notice under § 47-18-5810 that the consumer has
terminated the consumer's agreement with the licensee;
(4) Initiate, or request that a dedicated account service provider initiate, a
transfer from a consumer's bank account unless the transfer is:
(A) A return of money to the consumer;
(B) Before any termination of an agreement and properly
authorized by the agreement and this part for payment of a fee; or
(C) At the express direction of the consumer, to a consumer's
creditor to fund a negotiated resolution with that creditor;
(5) Receive consumer funds or control consumer funds, other than to
receive funds in payment of fees earned by the debt resolution services provider;
(6) Resolve a debt or lead a consumer to believe that a payment to a
creditor is in resolution of a debt to the creditor unless, at the time of resolution,
the creditor confirms that the payment is in full resolution of the debt or is part of
a payment plan that, upon completion, will be in full resolution of the debt;
(7) Make a representation that:
(A) The licensee will furnish money to pay bills or prevent
attachments; or
(B) Participation in a program will prevent litigation, garnishment,
attachment, repossession, foreclosure, eviction, or loss of employment;
(8) Misrepresent that the licensee is able to furnish legal advice or
perform legal services;
(9) Misrepresent, directly or by implication, any material aspect of a debt
resolution services program, including the amount of money or the percentage of
the debt amount that a consumer may save by using the service; the amount of
time necessary to achieve the represented results; the amount of money or the
percentage of each outstanding debt that the consumer must accumulate before
the provider of the debt resolution services will initiate attempts with the
consumer's creditors or make a bona fide offer to negotiate, resolve, or modify
the terms of the consumer's debt; the effect of the service on a consumer's
creditworthiness; the effect of the service on collection efforts of the consumer's
creditors; the percentage or number of consumers who attain the represented
results; or whether debt resolution services are offered or provided by a nonprofit
entity;
(10) Take a confession of judgment or power of attorney to confess a
judgment against a consumer;
(11) Purchase a debt or obligation of the consumer, or obtain a mortgage
or other security interest from any person in connection with the services
provided to the consumer;
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(12) Receive from or on behalf of a consumer a promissory note or other
negotiable instrument other than a check or a demand draft or a postdated check
or demand draft; or
(13) Except as permitted by federal law or by order of a court of
competent jurisdiction, disclose the identity or identifying information of a
consumer or the identity of the consumer's creditors, except to the commissioner,
upon proper demand, or to the extent necessary or appropriate to administer the
program, including to a dedicated account services provider or a creditor of the
consumer.
(b) An agreement must not:
(1) Provide for the application of law of any jurisdiction, other federal law,
or the law of a state of the United States;
(2) Except as otherwise permitted by the law of this state and the Federal
Arbitration Act (9 U.S.C. § 1 et seq.), restrict an individual's remedies under this
part or another law of this state; or
(3) Limit or release the liability of a person for failing to perform the
obligations of the agreement or for violating this part.
47-18-5815. Information Requirements.
(a) A licensee shall distribute, or arrange to be distributed, a statement of
accounting to a consumer:
(1) While a debt resolution services agreement is in effect:
(A) At least once per month; and
(8) On or before the fifth business day after a consumer requests
a statement of accounting from a licensee; provided, that a licensee is not
required to provide more than one (1) statement of accounting per month
per consumer in response to the consumer's request; and
(2) Within five (5) business days from the date on which a consumer or a
licensee terminates an agreement.
(b) A statement of accounting must contain the following information, to the
extent applicable:
(1) The amount of money that the consumer has deposited into the
consumer's dedicated account, and all withdrawals from the dedicated account,
from the initiation of the consumer's debt resolution services program;
(2) The amounts, dates, and creditors associated with each resolution
obtained by the licensee on behalf of the consumer;
(3) The fees that the licensee has charged to and collected from the
consumer in connection with each of the consumer's resolutions;
(4) The amount of money that the consumer holds in the consumer's
dedicated account; and
(5) With respect to each resolution obtained by the licensee for the
consumer:
(A) The total amount of money that the consumer paid to the
creditor in full discharge or satisfaction of the consumer's debt;
(8) The amount of the debt at the time the licensee and the
consumer entered into the agreement;
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(C) The amount of the debt at the time the creditor agreed to
resolve the debt; and
(D) The amount of compensation that the licensee received or will
receive to resolve the debt.
(c) Notwithstanding subdivisions (a)(1) and (2), a licensee that enables, or
arranges to enable, twenty-four (24) hours per day, seven (7) days per week, electronic
access by a consumer to all of the consumer's deposit account transaction information,
including all deposit and withdrawal activity, and electronic access by a consumer to
account activity, including resolution information, account status, resolution dates,
resolution amounts, and fees paid, satisfies the requirements of subsections (a) and (b).
47-18-5816. Prohibition on false and misleading advertising.
(a) A licensee shall not, directly or through a person who markets debt resolution
services on behalf of a licensee or a person described in§ 47-18-5804(b)(2), advertise,
announce, broadcast, display, distribute, print, publish, televise, or permit another
person to advertise, announce, broadcast, display, distribute, print, publish, or televise
on the licensee's behalf a statement or representation related to debt resolution services
that is deceptive, false, or misleading.
(b) A licensee shall not directly or indirectly provide anything of value in
exchange for favorable treatment in reviews or favorable placement in rankings.
(c) A licensee, or an affiliate of a licensee, shall not directly or indirectly own or
operate a website or other public-facing resource presenting rankings or consumer
reviews of the licensee.
(d) A licensee shall not make any statement or take any action that is likely to
mislead consumers regarding whether reviews the licensee uses to advertise its
business accurately reflect all reviews consumers have submitted to the licensee.
(e) A licensee shall comply with 16 CFR Part 255 and with CFPB Bulletin 2022-
05: Unfair and Deceptive Acts or Practices that Impede Consumer Reviews.
47-18-5817. Records.
(a) At the time of providing to a consumer any materials or agreements required
by this part, a licensee shall inform the consumer that upon electronic, telephonic, or
written request, the licensee must send the consumer a copy of the materials and must
comply with a request as provided in subsection (b).
(b) If a consumer submits a request to a licensee before the expiration of ninety
(90) days after a program is completed or terminated to send a copy of the materials
required by this section, then the licensee must send the materials to the consumer at no
cost to the consumer within five (5) business days after the request; provided, however,
that the licensee is not required to comply with more than one (1) request for materials
from the same consumer per calendar month, or if the licensee reasonably believes the
request is made for purposes of harassment. If a request is made more than ninety (90)
days and less than two (2) years after a program is completed or terminated, then the
licensee must send, within a reasonable time, a copy of the materials requested. The
licensee is not required to comply with any request from a consumer made more than
the later of:
(1) Two (2) years after a program is completed or terminated; or
(2) The applicable statute of limitations governing the contract.
(c) A licensee that maintains a website shall disclose on the home page or on a
page that is clearly and conspicuously connected to the home page by a link that clearly
reveals its contents:
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(1) The licensee's name and all names under which the licensee does
business in this state; and
(2) The licensee's principal business address, telephone number, and
email address, if any.
(d) A licensee shall keep, for a period of two (2) years from the date the record is
produced, the following records:
(1) All substantially different advertising, brochures, telemarketing scripts,
promotional materials, and supportive data;
(2) The name and last known address of each consumer, the goods or
services purchased, the date the goods or services were first provided or the
consumer signed an agreement for the provision of the goods or services, and
the amount paid by the consumer for the goods or services; and
(3) The name, any fictitious name used, the last known home address
and telephone number, and the job titles for all current and former employees
directly involved in sales or solicitations; provided, however, that if the licensee
permits fictitious names to be used by employees, each fictitious name must be
traceable to only one (1) specific employee.
(e) In addition to the records required by subsection (d), the licensee must keep a
copy of each signed agreement with any consumer for not less than five (5) years from
the date that the consumer either graduates or terminates the debt resolution program.
(f) A licensee may keep the records required by subsections (d) and (e) in any
form, and in the same manner, format, or place as the licensee keeps such records in
the ordinary course of business. Failure to keep all records required by subsections (d)
and (e) is a violation of this part.
(g) In the event of any dissolution or termination of the licensee's business, the
principal of the licensee must maintain all records as required under subsections (d) and
(e). In the event of any sale, assignment, or other change in ownership of the licensee's
business, the successor business must maintain all records required under subsections
(d) and (e).
47-18-5818. Penalty for violation.
(a) If the commissioner finds that a person has violated a provision of this part, a
rule adopted pursuant to this part, or any other law applicable to the conduct of a
licensee, then the commissioner may order or impose a penalty upon the person, which
must not exceed five thousand dollars ($5,000) per violation, up to a maximum of one
hundred thousand dollars ($100,000), plus costs of investigation. Each day a violation
occurs may be considered a separate offense.
(b) A finding or order by the commissioner that a violation under this part has
occurred is reviewable pursuant to the Uniform Administrative Procedures Act, compiled
in title 4, chapter 5.
47-18-5819. Statute of limitations.
An action or proceeding brought by the commissioner under this part must be
commenced within the later of the following:
(1) Four (4) years after the conduct that underlies the complaint is
discovered by the commissioner or the harmed consumer; or
(2) The applicable statute of limitations for any applicable criminal
offense.
47-18-5820. Transition.
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(a) Transactions for licensees whose licenses were issued pursuant to part 55 of
this chapter that were entered into prior to January 1, 2026, and the rights, duties, and
interests resulting from such transactions, may be completed, terminated, or enforced as
required or permitted by a law amended, repealed, modified, or preempted by this part
as though the amendment, repeal, modification, or preemption had not occurred.
(b) Licenses issued pursuant to part 55 of this chapter prior to January 1, 2026,
and the rights, duties, and interests resulting from the issuance of such licenses, may be
completed, terminated, or enforced as required or permitted by a law amended,
repealed, modified, or preempted by this part as though the amendment, repeal,
modification, or preemption had not occurred.
(c) Businesses offering services other than debt resolution services whose
licenses were issued pursuant to part 55 of this chapter may continue to operate under
such license without transition to this part.
SECTION 2. The headings to sections in this act are for reference purposes only and do
not constitute a part of the law enacted by this act. However, the Tennessee Code Commission
is requested to include the headings in any compilation or publication containing this act.
SECTION 3. For purposes of rulemaking, this act takes effect July 1, 2025, the public
welfare requiring it. For all other purposes, this act takes effect January 1, 2026, and applies to
conduct occurring and licenses applied for or renewed on or after that date.
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HOUSE BILL NO. 743
PASSED: April 1O, 2025
CAMERON--s'EXTON,SPEAKER
HOUSE OF REPRESENTATIVES
n., " · \ ~ ,.,R3A,N~D'Y9M..1~ALLY
SPEAKER OF THE S~ATE
/Jrpr-; APPROVED this JL(I&. day of I 2025
• U6. - BILL LEE, GOVERNOREvery fact on this page links to its source, starting with the official bill record.