Tennessee House Bill HB0772

Tennessee 2025-2026 Regular Session

• Introduced: 2/4/25
• Refer: 2/6/25
• Refer: 3/19/25
• Refer: 3/26/25
• Chaptered: 4/29/25
• Passed: 4/29/25

Caption

AN ACT to amend Tennessee Code Annotated, Title 56, Chapter 37, relative to premium finance companies.

Summary

HB0772 amends Tennessee’s premium finance company laws in Title 56, Chapter 37 to authorize licensees to charge insureds a convenience fee when payments are made by credit card, debit card, electronic funds transfer, electronic check, or other electronic means. The fee is limited to the licensee’s actual third-party processing costs, with an alternative allowing a fee based on the average actual cost across payment types. The bill also requires advance notice of the fee, an opportunity to cancel before the transaction is completed, and the availability of fee-free payment options such as check, cash, or money order. The bill further provides that convenience fees collected under this section are nonrefundable and may be charged in addition to other lawful interest and fees. It also bars convenience fees on debit or prepaid card transactions when prohibited by the applicable card network’s contract, rule, or policy. In addition, the bill preserves the ability of licensees to collect handling charges for dishonored drafts, checks, or electronic payment instruments under existing law, while limiting collection to one handling charge per item and clarifying that these charges do not count toward usury determinations for premium finance agreements.

Impact

The bill directly amends Tennessee Code Annotated § 56-37-109 governing premium finance companies, expanding the types of payment-related charges licensees may impose and defining how those charges are calculated and disclosed. It affects premium finance licensees and insured customers by permitting pass-through convenience fees for electronic payments, subject to cost-based limits and consumer notice requirements, while preserving existing handling-charge authority for dishonored payments and insulating these charges from usury-law analysis.

Sentiment

The available voting history suggests the bill was generally well received and moved through committee with clear support, including unanimous approval in the House Banking and Consumer Affairs Subcommittee and a 19-3 recommendation in the House Commerce Committee. No committee transcript is available, but the progression indicates broad acceptance of the bill’s approach to electronic payment fees and premium finance practices.

Contention

The main policy issue appears to be whether premium finance companies should be allowed to pass electronic payment processing costs on to insureds, and if so, how tightly those fees should be capped and disclosed. Potential concerns likely center on consumer cost, the possibility of added fees on routine payments, and whether the bill could increase the overall cost of premium financing. The bill addresses some of those concerns by limiting fees to actual costs, requiring notice and cancellation rights, and prohibiting fees where card-network rules do not allow them.