Banks and Financial Institutions - As enacted, extends, from one to two business days following receipt of a garnishment, the period of time within which a garnishee must determine whether the garnishee possesses or cont, the official text

.

:•tr~--.:•(AG                                     •:

i ~.\\ -=,-o.J,l!'ld::;:,-...                     :

State ef J emteSsee

PUBLIC CHAPTER NO. 174

SENATE BILL NO. 765

                                       By Bailey

Substituted for: House Bill No. 745

By Stevens, Davis

AN ACT to amend Tennessee Code Annotated, Title 26; Title 45 and Title 47, relative to banking.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:

          SECTION 1. Tennessee Code Annotated, Section 26-2-203, is amended by deleting
subsection (b) and substituting:

(b) The summons to the garnishee must notify the garnishee as follows:

          NOTICE - Although you have a longer time in which to answer the court
concerning this garnishment, you must, within two (2) business days after the day you
receive the garnishment, determine if you possess or control money or property of the
judgment debtor and place a hold on any available funds. Within that same time period
of two (2) business days, you must furnish a copy of the garnishment summons and
Notice to Judgment Debtor by mailing them first class, postage prepaid, to the judgment
debtor's last known address as shown by your records, or by actual delivery to the
judgment debtor, but in no event shall you furnish the copy of the garnishment and
Notice to Judgment Debtor prior to placing a hold on all available funds in your
possession or control. If the address shown by your records differs from that shown on
this execution form, you must also mail a copy of the garnishment and notice to the
latter address.

          SECTION 2. Tennessee Code Annotated, Section 26-2-203, is amended by inserting the
following as a new subsection (b) and redesignating the existing subsection (b) and remaining
subsections accordingly:

          (b) Notwithstanding another law or rule to the contrary, a garnishee must, within two
(2) business days after the day the garnishee receives a garnishment, determine if the
garnishee possesses or controls money or property of the judgment debtor, and furnish a copy
of the garnishment summons and notice to judgment debtor as provided in subsection (c), but
in no event shall a garnishee furnish the required information to the debtor prior to placing a
hold on all available funds in the garnishee's possession or control.

          SECTION 3. Tennessee Code Annotated, Section 26-2-405, is amended by deleting the
section and substituting:

Notwithstanding another law or rule to the contrary, a garnishee must be the only party

to furnish a copy of the garnishment summons and notice to judgment debtor to the judgment

debtor as provided for in § 26-2-203.  •

          SECTION 4. Tennessee Code Annotated, Section 26-2-406, is amended by deleting the
section and substituting:

          A sheriff or other officer who summons a garnishee shall provide the garnishee with
copies of the garnishment summons providing the completed notice required by § 26-2-404 or
by § 26-2-216, whichever is applicable. Within two (2) business days after the day the
garnishee receives the summons, the garnishee shall determine if such garnishee possesses
or controls money or property of the judgment debtor; and if so, within that same time period
the garnishee shall furnish a copy of the garnishment summons and notice by mailing them
SB 765

         first class, postage prepaid, to the judgment debtor's last known address as shown by the
          garnishee's records, or by actual delivery to the judgment debtor, but in no event shall the
          garnishee furnish a copy of the garnishment and notice to judgment debtor prior to placing a
          hold on all available funds in the garnishee's possession or control. If the address as shown
          by the garnishee's records differs from that provided by the creditor as shown on the bottom
          of the completed notice, then the garnishee shall also mail a copy of the garnishment and
          notice to judgment debtor at the latter address by first class mail, postage prepaid.
          SECTION 5. Tennessee Code Annotated, Section 47-3-416(b), is amended by adding the
following at the end of the subsection:
          If the person to whom the warranties are made sends written notice by certified or registered
          mail or commercial courier to the warrantor of the person's claim for breach of warranty and
          the warrantor fails to pay the claim within thirty (30) days after receiving the notice, then the
          expenses of the person to whom the warranties are made must include reasonable attorney
          fees.
          SECTION 6. Tennessee Code Annotated, Section 47-3-417(b), is amended by inserting the
following between the second and third sentences:
          If the drawee making payment sends written notice by certified or registered mail or
          commercial courier to the warrantor of the drawee's claim for breach of warranty and the
          warrantor fails to pay the claim within thirty (30) days after receiving the notice, then the
          expenses of the drawee to whom the warranties are made must include reasonable attorney
          fees.
          SECTION 7. Tennessee Code Annotated, Section 47-4-207(c), is amended by adding the
following at the end of the subsection:
          If the person to whom the warranties are made sends written notice by certified or registered
          mail or commercial courier to the warrantor of the person's claim for breach of warranty and
          the warrantor fails to pay the claim within thirty (30) days after receiving the notice, then the
          expenses of the person to whom the warranties are made must include reasonable attorney
          fees.
          SECTION 8. Tennessee Code Annotated, Section 47-4-208(b), is amended by inserting the
following between the second and third sentences:
          If the drawee making payment sends written notice by certified or registered mail or
          commercial courier to the warrantor of the drawee's claim for breach of warranty and the
          warrantor fails to pay the claim within thirty (30) days after receiving the notice, then the
          expenses of the drawee to whom the warranties are made must include reasonable attorney
          fees.
          SECTION 9. This act takes effect upon becoming a law, the public welfare requiring it, and
applies to acts occurring on or after the effective date of this act.

                                                                  2
         SENATE BILL NO. 765

PASSED:  March 28, 2025

         n               ~ " \f\A.. ., ~ IL\. L~, :, - ~~ ECWJ
                                   RANDY McN LLY

                                   SPEAKER OF THE s~tATE

                             -~r

                         CAMERONSEXTON,SPEAKER
                         HOUSE OF REPRESENTATIVES

n APPROVED this \l day of f\prj \  2025

           tu._,

         BILL LEE, GOVERNOR