Tennessee Senate Bill SB0694

Tennessee 2025-2026 Regular Session

• Introduced: 2/3/25
• Engrossed: 3/6/25
• Enrolled: 3/18/25
• Passed: 3/25/25
• Chaptered: 4/8/25

Caption

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

Summary

SB0694 revises Tennessee’s laws governing industrial loan and thrift companies by changing the maximum interest rates and related lending terms 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 for the principal under two separate provisions of Title 45, Chapter 5, and it removes now-obsolete subdivisions tied to the prior rate structure. It also increases another percentage cap in the statute from 10% to 12.5%. The bill takes effect July 1, 2025, and applies only to contracts or agreements entered into, amended, or renewed on or after that date. In practical terms, it updates the regulatory framework for industrial loan and thrift companies, affecting lenders operating under this chapter and borrowers who use their products, especially smaller-dollar consumer loans and other covered credit arrangements.

Impact

This act amends Tennessee Code Annotated Title 45, Chapter 5, specifically provisions governing industrial loan and thrift companies, by standardizing certain maximum effective rates at 36% for loans of $100 or more and raising a separate statutory percentage from 10% to 12.5%. It deletes outdated language in the affected sections and applies prospectively to new, amended, or renewed agreements beginning July 1, 2025, thereby changing the permissible pricing structure for covered lenders and the cost of credit for affected borrowers.

Sentiment

The bill appears to have been generally supported and moved through the legislature with clear majorities, including unanimous approval in the Senate Commerce and Labor Committee and strong floor passage in both chambers. The voting history suggests broad acceptance of the measure as a technical or policy update to lending law, though the recorded floor votes also show some opposition, indicating that not all members agreed with the changes to interest-rate limits and lending terms.

Contention

The main point of contention is the bill’s adjustment of allowable charges on industrial loan and thrift company products, particularly the 36% cap for loans of $100 or more and the increase from 10% to 12.5% in another fee or rate-related provision. Supporters likely viewed the bill as a modernization or clarification of the lending statute, while opponents may have been concerned that the changes preserve or expand high-cost credit options and could increase borrowing costs for consumers. The recorded nay votes on the floor indicate some legislative resistance, even though the bill ultimately passed comfortably.