2024 Legislative Report
The Tennessee Bankers Association is pleased to present this review of 2024 Tennessee legislation affecting the banking industry or that may be of general interest to Tennessee bankers. Each entry includes a public chapter summary, link to the full text, and effective date.
Please contact Amy Heaslet if you would like more information about any of these new laws and the impact they may have on your bank.
TDFI Assessments, Other Updates
SB 2072 / HB 2087 (TDFI Legislation)
Effective Date: July 1, 2024
Changes how TDFI calculates annual assessments for trust companies by removing the flat fee each pays plus the costs of their exams to an annual fee based on a trust company’s assets, with different weights assigned to “custody and safekeeping accounts”; removes the minimum and maximum assessment amounts, resulting in the banking fee being allocated among all state banks in proportion to their beneficially owned assets in all cases; and changes the threshold at which a bank may obtain an evaluation in lieu of an appraisal for real property acquired by the bank (appraisals are currently required for real property valued greater than $250,000; this would increase that to $500,000; and evaluations would then be required for property valued below $500,000).
Credit Unions Prohibited from Acquiring Banks
SB 1293 / HB 1241 (TBA Legislation)
Effective Date: April 11, 2024
Provides that if a Tennessee-chartered bank sells or transfers all, or substantially all, of its assets and liabilities, the buyer or transferee must be an FDIC-insured institution; however, this would not prohibit a bank from a selling a branch or loans to non-FDIC insured institutions.
Anti-ESG/Forced Access
SB 2148 / HB 2100
Effective Date: July 1, 2024
Requires financial institutions that are greater than $100 billion in assets and insurers to make determinations about providing or denying services based on an analysis of risk factors unique to each customer; and prohibits financial institutions from denying or canceling a financial service other than a loan or otherwise discriminating against a person based on the person’s:
- use of social credit scores (based on factors including ownership of a firearm, engagement in firearms business, engagement in the sale or manufacture of fossil fuels, energy, timber, mining or agriculture);
- political opinions;
- support of the state or federal government in combatting illegal immigration, drug trafficking, or human trafficking;
- failure to meet or commit to meet environmental standards, social governance standards, DE&I standards; or
- policies requiring or encouraging employee participation in social justice programming, including DE&I training.
Requires a financial institution to provide, within 30 days after receipt of a request, a detailed explanation for the denial, restriction or termination of services, unless prohibited by federal law. Provides that a violation of this law would constitute an unfair or deceptive act or practice and would be subject to the penalties and remedies and the Tennessee Consumer Protection Act.
Authorizes Credit Union Loan Participations with NonCUs
SB 1286 / HB 1062
Effective Date: July 1, 2024
Authorizes a credit union with a state charter to purchase a participation interest in a loan from a bank, another credit union, or another eligible organization, without requiring membership of the borrower of the loan.
Enacts the “Modernization of Towing, Immobilization, and Oversight Normalization Act”
SB 1692 / HB 1731
Effective Dates: May 28, 2024; July 1, 2024
Enact the “Modernization of Towing, Immobilization, and Oversight Normalization Act” (“act”), which sets new parameters around the towing and booting of motor vehicles, including as follows: (1) establishes that it is an offense for a commercial parking lot owner to boot or tow a motor vehicle located on the lot owner’s lot if the motor vehicle is not an abandoned, immobile, or unattended motor vehicle; (2) establishes that it is an offense for a person, other than a licensed parking attendant, to knowingly boot a motor vehicle in this state; (3) require a licensed parking lot and licensed parking attendant to accept credit cards and debit cards as methods of payment for the removal of a vehicle immobilization device from a motor vehicle; (4) requires a police department that takes into custody an abandoned, immobile, or unattended motor vehicle, to, within three business days after taking the motor vehicle into custody, verify ownership of the motor vehicle. The police department must, within three business days after receiving verification of ownership, notify by a nationally recognized overnight delivery carrier, other than the United States postal service, requesting proof of delivery, the last known registered owner of the motor vehicle and all lienholders of record that the vehicle has been taken into custody. The notice must inform the owner and any lienholders of the right to reclaim the motor vehicle within 20 days after the date of the notice, upon payment of all towing, preservation, and storage charges resulting from placing the vehicle in custody and state that the failure of the owner or lienholder to exercise the right to reclaim the vehicle within the time provided is deemed a waiver by the owner and all lienholders of all right, title, and interest in the vehicle and consent to the sale of the abandoned, immobile, or unattended motor vehicle at a public auction.
Workers Comp – Reporting of Accidents
SB 2094 / HB 1694
Effective Dates: June 30, 2024; July 1, 2024
Requires an employer to report to the bureau of workers’ compensation each accident that results in a work-related death or personal injury within 14 calendar days of the date the employer is notified of the accident or has knowledge of the accident, whichever is earlier, instead of reporting accidents at different intervals based upon the nature of the injury and whether the injured employee is able to return within seven days of the accident; and makes other changes relative to workers’ compensation.
Requirements for Automatic Renewal Agreements
SB 1894 / HB 1832
Effective Date: July 1, 2024
Makes changes to the law relative to obtaining affirmative consent from a consumer when processing automatic renewal agreements.
Updated Definition of Abuse or Neglect
SB 2076 / HB 1680
Effective Date: February 28, 2024
Expands the definition of abuse or neglect, for purposes of Adult Protective Service’s authority, to include situations when an adult is unable to provide or obtain the services necessary to maintain the adult’s personal health or welfare.
Information Involved in APS Investigations
SB 163 / HB 441
Effective Date: July 1, 2024
Makes changes to the present law regarding adult protection relevant to confidentiality of information, reports, and proceedings, including requiring adult protective services to provide to the district attorney general a complete and unredacted copy of adult protective services’ entire investigative file, including the identity of the person who reported the alleged conduct, upon the commencement of a criminal prosecution for alleged conduct involving an elderly or vulnerable adult victim obtained in the course of an investigation.
Protections for Elderly and Vulnerable Adults
SB 2147 / HB 2420
Effective Date: April 23, 2024
Makes changes to the law protecting elderly persons and disabled adults, including providing that if a surviving spouse is found by a court of competent jurisdiction to have procured a marriage to an elderly person or disabled adult as part of a scheme to commit abuse or neglect, sexual abuse, financial exploitation, or theft of the elderly person’s or disabled adult’s real or personal property, or has otherwise procured marriage to the elderly person or disabled adult by fraud, duress, or undue influence, then the surviving spouse is not entitled to certain rights or benefits that inure solely by virtue of the marriage or the person’s status as surviving spouse of the decedent unless the decedent and the surviving spouse voluntarily cohabited as husband and wife with full and complete disclosure and knowledge of and capacity to understand the facts constituting such actions and both spouses subsequently ratified the marriage, only to the extent that the elderly adult or disabled adult is capable of ratifying such a marriage.
TBI Hotline for Financial Institutions to Report Elder Financial Exploitation
SB 756 / HB 1248
Effective Dates: May 21, 2024; October 1, 2024
Authorizes a financial service provider, or an officer or employee of the provider, that has reasonable cause to suspect that an elderly or vulnerable adult is the victim or target of financial exploitation, to convey the suspicion to the TBI’s elder financial reporting mechanism; requires the TBI to create, by October 1, 2024, an elder financial exploitation reporting mechanism that accepts reports from financial institutions. Upon receiving a report, TBA shall coordinate with the local district attorney general and/or other law enforcement agencies and adult protective services for additional investigation.
Establishes Guardianship/Conservatorship Transfer Process within the Court
SB 2228 / HB 1994
Effective Date: March 7, 2024
Establishes a process for the transfer of a guardianship or conservatorship matter from the court appointing the guardian or conservator to a court in another county of this state.
Waiving an In-Person Fiduciary Oath
SB 2227 / HB 1993
Effective Date: July 1, 2024
Allows the clerk of court to waive an in-person oath by a fiduciary if the fiduciary files with the clerk a written fiduciary oath that contains certain language and is sworn or affirmed by the fiduciary in the presence of a notary public or signed and dated under penalty of perjury; and specifies certain language that a fiduciary oath must contain under various circumstances.
Reports Submitted on Respondents in Conservator Proceedings
SB 2254 / HB 2710
Effective Date: March 27, 2024
Permits a physician, psychologist, or senior psychological examiner who performs an examination on the respondent in a conservatorship proceeding to submit a report to the court that has been declared under penalty of perjury, rather than a sworn report.
Trust Law Updates
SB 2256 / HB 2713
Effective Date: July 1, 2024
Makes various changes to present law on trusts, estates, and partnerships, including:
- Clarifying that the power to appoint multiple successor trustees and additional trustees also includes the ability to allocate powers and certain responsibilities between a trustee and a chosen trust advisor;
- Providing that another state’s unlimited perpetuities period may be used if administration of the trust is changed to Tennessee; and
- Modifying Tennessee’s general partnership statute to carve out a “Family General Partnership” to continue allowing any partner to withdraw as a partner, but for a family partnership there would not be a default right to receive pro rata fair market value but rather the withdrawing partner would be treated as a mere assignee of distribution rights and liquidation proceeds.
Attorney Ad Litem Costs
SB 1952 / HB 2003
Effective Date: April 29, 2024
Makes revisions to present law relevant to an attorney ad litem, including authorizing the costs of an attorney ad litem to, in the court’s discretion, be charged against the petitioner if the court dismisses a conservatorship petition because of a finding of fraud, bad faith, or deception by the petitioner; and authorizes the cost of the attorney ad litem in an emergency guardianship or conservatorship proceeding to, in the court’s discretion, be charged against the assets of the respondent or against the petitioner.
Statutes of Limitations and Repose
SB 2017 / HB 2113
Effective Date: July 1, 2024
Requires causes of action for unpaid wages for hours worked, overtime, minimum wage, salary, bonuses, commissions, or other compensation owed to an employee or independent contractor, including ones for breach of contract, unjust enrichment, or quantum merit for unpaid wages for hours worked, overtime, minimum wage, salary, bonuses, commissions, or other compensation, to be commenced within three years from the accruing of the cause of action.
Online Publication of Legal Notices
SB 2317 / HB 2114
Effective Date: July 1, 2024
Requires, when legal notices must be published in a newspaper of general circulation, that the notice also be published on a news and information website that has a URL, if such a website exists, that meets certain requirements.
Actions on Consumer Debt
SB 2375 / HB 2320
Effective Date: July 1, 2024
Requires, in an action on consumer debt filed in a general sessions court, the plaintiff to include certain information with a civil warrant or any other leading process used to initiate the action; and requires, prior to an award of a default judgment, the plaintiff to present to the court documentation sufficient to demonstrate the authority of the plaintiff to collect the debt and certain agreements or records to demonstrate the existence of the consumer debt.
Civil Liability in Class Action Resulting from Cybersecurity Event
SB 2018 / HB 2434
Effective Date: May 21, 2024
Declares a private entity to be not civilly liable in a class action resulting from a cybersecurity event unless the cybersecurity event was caused by willful and wanton misconduct or gross negligence on the part of the private entity.
State Entity Prohibited from Paying a System Hacker
SB 1825 / HB 1733
Effective Date: March 7, 2024
Prohibits a state entity from submitting payment with an entity that has engaged in a cybersecurity incident on an information technology system by encrypting data and then subsequently offering to decrypt that data in exchange for a ransom payment; and requires a state entity experiencing a ransom request in connection with a cybersecurity incident to immediately notify and consult with the technology and innovation division of the TBI.
Requirements for Rating Services that Grade Potential Investments
SB 1846 / HB 1787
Effective Date: March 7, 2024
Specifies that the ratings services that grade potential investments for idle funds of local governments be nationally recognized statistical rating organizations as identified by the United States securities and exchange commission.
Creates the “Resilient Tennessee Revolving Loan Fund Act”
SB 2082 / HB 1684
Effective Date: July 1, 2024
Creates the Resilient Tennessee Revolving Fund Act; declares that disaster mitigation and resiliency are of the highest priority to the state; ensures that Tennessee is ready and able to receive federal funds from the Safeguarding Tomorrow through Ongoing Risk Mitigation (STORM) Act; requires the following money to be deposited into the fund: money received through FEMA and the STORM Act, money appropriated by the general assembly, investment and interest earnings, money received as repayment of loan principal and interest, and all money received by the fund; requires money in the fund to be used to provide loans at an interest rate not exceeding 1% to eligible recipients; allows money in the fund to be used to provide loans and financial assistance to recipients that mitigate the impacts of natural hazards; and requires TEMA to administer the fund and adopt rules and regulations for the fund’s administration.
Dept of Revenue Required to Implement E-Title/E-Lien System
SB 1837 / HB 2075
Effective Date: April 22, 2024
Requires the department of revenue to, on or before June 30, 2026, procure an electronic lien and title system for motor vehicles to be used throughout the state; and clarifies that “electronic lien and title system” means a program that allows the exchange of lien and title information with lienholders and is used to create, save, alter, and transfer titles to property.
Assessors of Property/Reappraisals
SB 2769 / HB 2055
Effective Date: April 23, 2024
Requires an assessor of property to notify the register of deeds as to which records are “permanent records”; revises the definition of a “movable structure” for purposes of classification and assessment of property taxes; and authorizes the state board of equalization to approve a reappraisal plan specifying a schedule for continuous on-site review or photo review that is different than the standard schedule provided in state law relative to periodic reappraisal and equalization of property taxes, but that is no longer than four years.
Bond Issuance
SB 2941 / HB 2972
Effective Date: May 15, 2024
Authorizes the state to issue and sell bonds of up to $87,700,000
TN Rural and Workforce Housing Act
SB 1000 / HB 1046
Effective Dates: July 1, 2024; July 1, 2025
Enact the “Tennessee Rural and Workforce Housing Act” which authorizes the Tennessee housing development agency (THDA) to allocate to the owner of a qualified project a credit against taxpayer liability for any tax imposed by the law relevant to insurance, excise tax law, or franchise tax law; authorizes the owner of a qualified project to apportion a Tennessee rural and workforce housing tax credit among some or all of the direct partners or direct members of the business entity or association owning the qualified project, in any manner agreed to by such business entity or association, regardless of whether such business entities or associations are allocated or allowed any portion of the federal housing tax credit with respect to the qualified project; and if any of the direct partners or direct members of the business entity or association owning the qualified project is a pass-through entity, any such pass-through entity may further apportion a Tennessee rural and workforce housing tax credit to any of its direct partners, direct members, or direct shareholders in any manner agreed to by such parties, regardless of whether such parties are allocated or allowed any portion of the federal housing tax credit with respect to the qualified project.
Authorizes Industrial Development Boards to Issue Bonds for Affordable Housing
SB 1137 / HB 1229
Effective Date: May 28, 2024
Authorizes local governments across Tennessee to provide credit support for bonds issued by industrial development boards to assist with the creation and preservation of affordable housing.
Creation of Voluntary Attainable Housing Incentive Program by Ordinance
SB 2496 / HB 2623
Effective Date: July 1, 2024
Authorizes the chief legislative body of a municipality to create a voluntary attainable housing incentive program by ordinance for the purpose of authorizing certain incentives to be provided to property owners who seek to build multi-family attainable housing; requires property owners to submit a completed application to the regional planning commission of a local government in order to be considered for the voluntary program; and defines “multi-family housing” to mean accommodations that are designed principally for residential use and consist of not less than five rental units on one site, so long as such units are not detached.
Disclosure of Sinkholes
SB 658 / HB 623
Effective Date: July 1, 2024
Specifies that a seller of residential property is required to disclose the presence of a known sinkhole on the property prior to entering into a contract with a buyer regardless of whether the sinkhole is indicated through the contour lines on the property’s recorded plat map.
Public Disclosure Mandate for Redevelopment Projects
SB 2150 / HB 2249
Effective Date: July 1, 2024
Requires a housing authority adopting a redevelopment plan or urban renewal plan related to a redevelopment project to publicly provide information on the estimated cost of the redevelopment project, the sources of revenue to finance the costs of the project (including the estimated tax increment), an estimate of the total amount of debt to be incurred and expected time to be fully repaid, and an estimate of how the tax increment provision will affect the revenue streams of all taxing locations in the area being developed, at least ten days prior to a public hearing about the project, rather than five.
Contesting Liens on Real Property
SB 1646 / HB 2047
Effective Date: April 22, 2024
Adds former public officials to the list of officials who may contest liens on real property believed to lack any legal basis.
Increase in Acreage for Tax Jurisdiction Purposes
SB 2054 / HB 1659
Effective Date: May 21, 2024
Increases from 1,500 to 3,000, for tax years beginning on or after January 1, 2025, the amount of acreage of land permitted to be placed within any one taxing jurisdiction under the Agricultural, Forest and Open Space Land Act.
Prohibits Ownership of Real Property by Certain Foreign Persons
SB 2639 / HB 2553
Effective Dates: May 21, 2024; January 1, 2025
Repeals and replaces a law passed last year that prohibits ownership of real property by certain foreign persons; prohibits certain foreign-party-controlled businesses from acquiring an interest in public, private, or agricultural land in this state; requires land improperly acquired to be divested within 2 years; defines “prohibited foreign party” as a citizen or resident or a foreign government formed within a country subject to International Traffic Arms Regulations (22 C.F.R. § 126.1); exempts certain licensed individuals, including realtors, lenders, and title attorneys, from liability; protects lenders interests in the event of foreclosure; and does not apply to prohibited foreign parties or businesses that are duly registered and in good standing with the Tennessee secretary of state as of January 1, 2025.
Anti-Squatter Laws
SB 795 / HB 1259
Effective Date: July 1, 2024
Enacts anti-squatters laws that establish a process by which a property owner may file a complaint to request the sheriff remove an unlawful occupant of a residential dwelling under certain conditions; requires the sheriff to: (1) investigate the complaint; and (2) serve a notice to immediately vacate on all unlawful occupants; authorizes the sheriff to arrest any person in the dwelling for trespass, outstanding warrants, or any other legal cause; entitles the sheriff to a fee for service of the notice to immediately vacate and authorizes the sheriff to charge a reasonable hourly rate should the property owner request the sheriff to be on standby as the locks are changed and an unlawful occupant’s personal property is removed; and authorizes a person to bring a civil action if they are wrongfully removed from a dwelling and requires the court to expedite such hearing.
Building Inspection Time Frame
SB 1735 / HB 1807
Effective Date: July 1, 2024
Requires, for an inspection of new construction or the renovation of an existing building that must be conducted by the state fire marshal or another state agency, department, or entity, the state fire marshal or appropriate state entity to conduct the requested inspection within 10 business days, instead of 72 hours, of receipt of the request.
Repeal of and Refund for Certain Franchise Tax Payments
SB 2103 / HB 1893
Effective Date: May 10, 2024
Repeals the real and tangible property alternative minimum measure of the state’s franchise tax; provides for a 3-year refund period for franchise taxes paid under the alternative minimum measure; and provides for disclosure of certain information for taxpayers that apply for refunds.
Property Tax Liens/Sales
SB 2550 / HB 2624
Effective Dates: May 21, 2024; September 1, 2024
Makes various revisions to laws governing property tax liens, delinquent property taxes, and property tax proceedings, including granting first priority to property tax liens relative to receiver’s liens and other liens established under the Neighborhood Preservation Act and the Tennessee Local Land Bank Program; and clarifying that if a local bank submits a bid equal to or greater than the highest bidder within two business days from the close of the tax sale auction, then the local bank is the prevailing bidder.
Defines CBDC for UCC Purposes
SB 2219 / HB 1901
Effective Date: April 11, 2024
Defines “central bank digital currency,” and revises the definitions of “money” and “deposit account” by excluding CBDC from those terms for purposes of the Uniform Commercial Code.
Excludes CBDC from Deposit Account Definition
SB 479 / HB 640
Effective Date: April 29, 2024
Clarifies that a “deposit account,” for purposes of provisions regarding secured transactions in the Uniform Commercial Code, does not include a United States central bank digital currency.
State Study on Real Estate Fraud
SB 2448 / HB 2215
Effective Date: May 6, 2024
Requires the Tennessee advisory commission on intergovernmental relations (TACIR) to conduct a study and compile a report to be submitted to the general assembly on real estate fraud in this state.
State Study on Vendors Compensation and Interchange Fees
SB 1140 / HB 886
Effective Date: May 28, 2024
Requires TACIR to perform a study of the collection and remittance of state and local taxes by retailers, including sales and use taxes, collected at the point of sale by businesses in Tennessee; and the study must include, but not be limited to: the cost to businesses of collecting and remitting taxes; the cost to businesses of payment card fees on the tax portion of transactions, including interchange and other fees associated with payment processing; and the costs to businesses of accepting cash.
