All Roll Calls
Yes: 153 • No: 1
TennesseeHB 0743114th General Assembly (2025-2026)House
AN ACT to amend Tennessee Code Annotated, Title 47, Chapter 18, relative to debt resolution services.
Sponsored By: Sponsor information unavailable
Signed by Governor
Consumer Protection
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Bill Overview
Analyzed Economic Effects
8 provisions identified: 5 benefits, 2 costs, 1 mixed.
Safer accounts for debt resolution customers
Beginning January 1, 2026, required debt resolution savings accounts must be at FDIC-insured banks. You own the money and interest. The account company must be independent of the debt resolution provider, with no paid referrals between them. Ownership above 20% of voting shares counts as control. Providers must give you the signed agreement, electronically only with your consent. It must explain services, covered debts, fees, estimated timelines, savings targets before creditor offers, and any required arbitration. It must warn about credit damage, collections, possible taxes on forgiven debt, and the need for regular savings. It must also explain that the service may not suit everyone, results are not guaranteed, and professional advice requires proper licensing. Providers must state that they act as your advocate and receive no creditor compensation. They must keep an adequately staffed, toll-free phone line open during ordinary business hours.
Debt customers can leave without penalties
Beginning January 1, 2026, you can end a debt resolution agreement anytime without penalty by writing, electronically, or through a recorded phone call. Within two business days, the provider must explain effects on negotiated installment plans and pending talks. It must notify the account company within five business days of your notice. Unless you give other instructions, it must also request contact about your remaining money within five business days after its explanation. You still owe fees already earned in line with the law and your contract. Providers can end your agreement in writing if a contract duty remains unmet by the sixth day after its due date. They can end it immediately after proper written notice if you refuse to pay an earned fee. After provider termination, you owe no further payments except previously earned fees.
Debt customers get statements and records
Beginning January 1, 2026, providers must give active debt resolution customers monthly account statements. Requested statements and final statements are due within five business days; requested statements are limited to one per month. Statements must show deposits, withdrawals, balances, resolved debts, creditor payments, fees charged and collected, and provider compensation. They must also show debt amounts at enrollment and when creditors agreed to resolve them. Continuous online access to all required information can replace statements. Providers must tell you about your right to request program records. Within 90 days after your program ends, copies are free and due within five business days, limited to one request per calendar month; reasonably suspected harassment requests can be declined. Requests after 90 days but before two years must be handled within a reasonable time. Providers need not answer requests after the later of two years or the applicable contract lawsuit deadline. They must keep specified records for two years and signed agreements for at least five years after your program ends, including through specified business changes. Provider websites must list business names and contact details.
Debt resolution fees require real progress
Beginning January 1, 2026, Tennessee debt resolution providers cannot request or collect fees until three steps are complete. You must sign a compliant agreement, a creditor must agree to change at least one debt, and you must make a payment under that resolution or another valid creditor agreement. Fees for individual debts must follow each debt's share of enrolled debt or use the same percentage of savings. Savings means the enrolled debt amount minus the amount paid to resolve it. Account administration and outside legal fees are excluded from these fee rules. Providers can delay their fees without adding expense, but do not have to offer this option. Any lender they help arrange must be licensed, authorized, or exempt from licensing in Tennessee.
Stronger protections against debt service abuse
Beginning January 1, 2026, covered debt resolution providers and marketers cannot take power of attorney to resolve debts. They cannot redirect creditor messages, send stop-contact notices for customers, act after agreements end, or improperly access bank accounts. They generally cannot receive or control your money, except earned fees and allowed transfers. Transfers are limited to refunds, legally authorized earned fees before termination, or creditor payments you expressly direct. They cannot buy your debt, take mortgages or other security tied to their services, obtain advance admissions of liability, or accept prohibited payment instruments. Identity disclosures are limited to program administration and specified legal demands. Providers cannot falsely claim a debt is settled without creditor confirmation or misrepresent savings, timelines, credit effects, success rates, nonprofit status, or legal advice. Ads must be truthful; providers cannot pay for favorable reviews, run public sites ranking or reviewing themselves, or mislead people about which reviews appear. They must follow federal endorsement rules and consumer review guidance. Contracts cannot choose another jurisdiction's law or erase liability for failing to perform or breaking this law. They cannot restrict Tennessee remedies beyond what Tennessee law and federal arbitration law allow.
Existing debt agreements keep earlier rules
The law took effect for rulemaking on July 1, 2025, and for other purposes on January 1, 2026. The new rules apply to conduct and licenses on or after January 1, 2026. Transactions and licenses under the earlier law from before that date can be completed, ended, or enforced under earlier rules. Rights and duties arising from them are preserved. Businesses licensed under the earlier law for services other than debt resolution can continue without switching to the new system.
Some debt providers remain outside protections
Beginning January 1, 2026, this law exempts banks and their employees, qualifying tax-exempt groups, and creditors acting as creditors. Tennessee-licensed lawyers and accountants are exempt when acting within professional client relationships. Judicial officials and government workers acting officially are also exempt; covered government workers must be paid solely by the government entity. Licensee employees and marketing-only workers do not need separate licenses, but marketing-only workers cannot also provide debt resolution services. Account companies are exempt only when they do not provide debt resolution services themselves. A provider is also exempt for a customer it has no reason to know lives in Tennessee when services are agreed to. These exemptions limit which customers receive this law's protections.
Debt providers face licensing and penalties
Beginning January 1, 2026, covered providers need a Tennessee Commerce and Insurance license before offering or marketing debt resolution services. Licenses last two years, cannot be transferred, and are tied to the primary business address. Providers must maintain a state-set surety bond of no more than $50,000 while licensed and for two years after serving Tennessee customers ends. Applications must be sworn and include a state-set fee, business compliance proof, leadership and enforcement histories, agreements, fee schedules, two prior fiscal years of financial statements, and approved accreditation or certification. The commissioner can require executive fingerprints for initial licensing; missing required fingerprints means denial. Providers must report material changes within 30 days and give access to Tennessee customer records for renewal. Assumed business names must be registered with the state. Annual sworn reports must list active and enrolled Tennessee customers and fees collected; required corrections are due within 30 days of notice. The commissioner can investigate, demand records, issue orders, deny or revoke licenses, and suspend them immediately for imminent public harm. Violations can bring fines up to $5,000 each, capped at $100,000 per enforcement action, plus investigation costs; each continuing day can count separately. Enforcement actions must begin within the later of four years after discovery or the applicable criminal deadline. Administrative procedures govern hearings, with appeals to Davidson County Chancery Court; criminal matters can be referred to law enforcement.
Sponsors & Cosponsors
Sponsors
There is no primary sponsor on record.
Cosponsors
Johnny Garrett
Republican • House
Roll Call Votes
Senate vote • 4/10/2025
FLOOR VOTE: Third Consideration 4/10/2025
Yes: 31 • No: 1
House vote • 3/31/2025
FLOOR VOTE: REGULAR CALENDAR AS AMENDED PASSAGE ON THIRD CONSIDERATION 3/31/2025
Yes: 93 • No: 0
House vote • 3/31/2025
HOUSE CALENDAR & RULES COMMITTEE
Yes: 0 • No: 0
House vote • 3/26/2025
HOUSE COMMERCE COMMITTEE
Yes: 22 • No: 0
House vote • 3/19/2025
HOUSE BANKING AND CONSUMER AFFAIRS SUBCOMMITTEE
Yes: 7 • No: 0
Bill Text
HA0187 (Substitute)
3/31/2025
HA0188
3/31/2025
Enrolled / Public Chapter
Fiscal Note
Introduced
SA0232
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