Tennessee House Bill HB0775

Tennessee 2025-2026 Regular Session

• Introduced: 2/4/25
• Refer: 2/6/25
• Refer: 3/5/25
• Refer: 3/12/25
• Chaptered: 4/8/25
• Passed: 4/8/25

Caption

AN ACT to amend Tennessee Code Annotated, Title 45, Chapter 5, relative to industrial loan and thrift companies.

Summary

HB0775 amends Tennessee’s laws governing industrial loan and thrift companies, primarily by changing the maximum interest rates these lenders may charge on certain loans. For loans with an amount financed of $100 or more, the bill sets a maximum effective rate of 36% per annum and removes a prior statutory provision that had allowed a different rate structure in that section. It also makes a parallel change in another part of the chapter governing these companies, again capping the effective rate at 36% for loans of $100 or more and deleting an existing subdivision tied to the prior framework. The bill further revises a separate provision by increasing a percentage threshold from 10% to 12.5%, which affects how the statute calculates or applies a related charge, fee, or rate component under Title 45, Chapter 5. The act applies only to contracts or agreements entered into, amended, or renewed on or after July 1, 2025, so existing agreements are generally not immediately altered. Overall, the measure updates the regulatory structure for industrial loan and thrift companies and changes the terms under which these lenders may extend credit in Tennessee.

Impact

The bill directly amends Tennessee Code Annotated, Title 45, Chapter 5, affecting the statutory rate limits and related provisions applicable to industrial loan and thrift companies. It establishes a 36% maximum effective annual rate for qualifying loans of $100 or more, deletes certain existing subdivisions, and raises one percentage figure from 10% to 12.5%. The practical effect is to change the pricing rules for covered lenders and the terms available to borrowers under these consumer and small-dollar lending statutes, beginning July 1, 2025, for new, amended, or renewed agreements.

Sentiment

The available voting history suggests the bill moved with support in committee, passing the House Banking and Consumer Affairs Subcommittee unanimously and the House Commerce Committee by a solid margin. No committee transcript is provided, so there is no recorded floor or committee debate to indicate broader public arguments. Based on the votes, the measure appears to have been viewed favorably by most committee members, though the 10-4 vote in Commerce indicates some level of reservation or disagreement.

Contention

The main point of contention likely concerns consumer lending policy: supporters may view the bill as a modernization or clarification of rate limits for industrial loan and thrift companies, while opponents may worry that a 36% cap and the related percentage increase still permit high-cost credit or could affect borrower protections. The 10-4 committee vote suggests some members had concerns about the impact on consumers, lending practices, or the balance between access to credit and regulation. Because there are no transcripts, the specific objections are not stated, but the likely divide is between industry/regulatory flexibility and consumer protection.