Senate Bill 766 amends Tennessee Code Annotated, Section 56-37-109, to provide clearer guidelines regarding convenience fees that premium finance companies can impose on insured individuals making payments through electronic means. The bill allows licensees to collect a convenience fee to offset actual costs incurred in processing electronic payments, with the stipulation that the fee must not exceed the actual costs. Additionally, it defines "actual cost" and outlines that if a licensee is a subsidiary of a payment processing entity, the costs incurred by the parent entity are considered third-party costs. The bill also mandates that licensees must inform insured individuals of the convenience fee prior to transaction completion and provide options for payment without incurring such fees.

Furthermore, the bill specifies that convenience fees are non-refundable and can be charged alongside other legal fees and interest. It prohibits the imposition of convenience fees on debit or prepaid card transactions if the payment card network prohibits such fees. Licensees are also allowed to charge handling fees for dishonored payments, with restrictions on the number of charges that can be applied. Overall, the bill aims to enhance transparency and fairness in the collection of fees by premium finance companies while ensuring compliance with existing usury laws.

Statutes affected:
Introduced: 56-37-109