The first session of the 113th Tennessee General Assembly saw several important pieces of legislation that recognize the need to modernize systems that have become outdated and unworkable—both for the state as a whole and also specifically for the banking industry.
Governor Lee’s priority measure this session is the Transportation Modernization Act, which will implement promising first steps toward addressing critical transportation infrastructure needs across the state with innovative tools like public-private partnerships, choice lanes, and new project-delivery models. Importantly, the measure recognizes needs in rural communities that are rapidly growing yet are straining to keep up with infrastructure demands while also bringing solutions addressing congestion in urban areas.
The Tennessee Department of Financial Institutions had one priority bill this year, and that was the Money Transmission Modernization Act. The new act replaces the current Money Transmitter Act enacted in 1994 with model legislation intended to promote coordination among the states in all areas of regulation, licensing, and supervision to reduce regulatory burden and more effectively utilize regulator resources.
TBA’s priority legislation similarly was intended to recognize the need for modernization to the state’s foreclosure process. With the general decline in newspaper circulation, some even going out of business, and high costs for publication of public notices of the sales, TBA’s legislation would have transitioned newspaper notices of foreclosure to a statewide portal on the Secretary of State’s website. The legislation would have allowed a central statewide website for all foreclosures, which would bring more potential buyers to the sale and drastically reduce the publication costs that currently range from $500 to $1,500 to a nominal fee for online posting.
TBA worked with a coalition of groups to support the legislation while several other trade groups were neutral. Ultimately, the only opposition came from the Tennessee Press Association and its member newspapers.
We successfully passed the bill in a House subcommittee early in session. However, after weeks of negotiating with the nine-member Senate State and Local Government Committee and the Tennessee Press Association, we asked the Senate and House bill sponsors to defer the legislation to 2024. TBA strongly believes in the merits of the bill and is focused on achieving meaningful reform for the foreclosure process that will become the new standard of law for decades to come. Unfortunately, the compromises necessary to gain approval by the Senate committee this session would not have achieved that goal.
Although no one can dispute the general demise of the newspaper industry overall, the influence of the remaining local community newspapers remains strong. The senators who represent the rural areas and those newspapers had great hesitation about supporting legislation that, as newspapers claimed, would put them out of business. Though the bill would provide great benefit to homeowners facing foreclosure, those Senators were not ready to push through for the needed changes.
Despite those headwinds, we are committed to modernization of the foreclosure process and understand it will be a significant policy shift, which will take time to achieve correctly. For the time being, public notices of foreclosures and distressed homeowners will continue to prop up the newspaper industry for the time being. But the conversation is started and will continue during the summer and fall and into the 2024 legislative session. I welcome your feedback on this and other issues before the legislature.