(a) Any person, or group of persons acting in concert, seeking to acquire control of a licensee shall obtain the written approval of the commissioner prior to acquiring control. An individual is not deemed to acquire control of a licensee and is not subject to these acquisition of control provisions when that individual becomes a key individual in the ordinary course of business.
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Terms Used In Tennessee Code 45-7-118

  • Acting in concert: means persons knowingly acting together with a common goal of jointly acquiring control of a licensee whether or not pursuant to an express agreement. See Tennessee Code 45-7-103
  • Commissioner: means the commissioner of financial institutions. See Tennessee Code 45-7-103
  • Control: means the power to:
    (i) Vote, directly or indirectly, at least twenty-five percent (25%) of the outstanding voting shares or voting interests of a licensee or person in control of a licensee. See Tennessee Code 45-7-103
  • Devise: To gift property by will.
  • Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
  • Guardian: A person legally empowered and charged with the duty of taking care of and managing the property of another person who because of age, intellect, or health, is incapable of managing his (her) own affairs.
  • Individual: means a natural person. See Tennessee Code 45-7-103
  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • Key individual: means any individual ultimately responsible for establishing or directing policies and procedures of the licensee, such as an executive officer, manager, director, or trustee. See Tennessee Code 45-7-103
  • Licensee: means a person licensed under this chapter. See Tennessee Code 45-7-103
  • NMLS: means the Nationwide Multistate Licensing System and Registry developed by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators and owned and operated by the State Regulatory Registry, LLC, or any successor or affiliated entity, for the licensing and registration of persons in financial services industries. See Tennessee Code 45-7-103
  • Person: means any individual, general partnership, limited partnership, limited liability company, corporation, trust, association, joint stock corporation, or other corporate entity identified by the commissioner. See Tennessee Code 45-7-103
  • Personal representative: when applied to those who represent a decedent, includes executors and administrators, unless the context implies heirs and distributees. See Tennessee Code 1-3-105
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
  • Trustee: A person or institution holding and administering property in trust.
  • written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
(b) A person, or group of persons acting in concert, seeking to acquire control of a licensee shall, in cooperation with the licensee, submit an application to acquire control, in a form and in a medium prescribed by the commissioner.
(c) Upon request, the commissioner may permit a licensee or the person, or group of persons acting in concert, to submit some or all information required by the commissioner pursuant to subsection (b) without using NMLS.
(d) The application required by subsection (b) must include information required by § 45-7-114 for any new key individuals that have not previously completed the requirements of § 45-7-114 for a licensee.
(e)

(1) When an application for acquisition of control under this section appears to the commissioner to include all the items and to address all the matters that are required, the commissioner shall determine whether the application is complete under this section, and:

(A) Within sixty (60) days of concluding an application is complete, the commissioner may either approve or deny the application; or
(B) If the application is not approved or denied within sixty (60) days after the date that the commissioner determined the application to be complete:

(i) The application is approved; and
(ii) The person, or group of persons acting in concert, are not prohibited from acquiring control.
(2) The commissioner may for good cause extend the application period.
(f) A determination by the commissioner that an application is complete under this section means only that the application, on its face, appears to include all of the items and address all of the matters that are required, and the determination is neither an assessment of the substance of the application nor of the sufficiency of the information provided.
(g) When an application is filed and considered complete under this section, the commissioner shall investigate the financial condition and responsibility, financial and business experience, character, and general fitness of the person, or group of persons acting in concert, seeking to acquire control. The commissioner shall approve an acquisition of control pursuant to this section if the commissioner finds that the following conditions have been fulfilled:

(1) The requirements of subsections (b) and (d) have been met, as applicable; and
(2) The financial condition and responsibility, financial and business experience, competence, character, and general fitness of the person, or group of persons acting in concert, seeking to acquire control, and the competence, experience, character, and general fitness of the key individuals and persons that would be in control of the licensee after the acquisition of control indicate that it is in the interest of the public to permit the person, or group of persons acting in concert, to control the licensee.
(h) The commissioner shall notify the licensee in writing of a denial of an application under this section, stating the basis for denial. If the commissioner denies an application, the licensee may make a written request to the commissioner for a hearing on the question of whether the application should be approved. Any hearing requested under this subsection (h) must be conducted in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5; provided, that the licensee has requested the hearing in writing within thirty (30) days of the date of the commissioner’s denial. At the hearing, the licensee must prove by a preponderance of the evidence that the applicant is entitled to a license.
(i) The requirements of subsections (a) and (b) do not apply to the following:

(1) A person that acts as a proxy for the sole purpose of voting at a designated meeting of the shareholders or holders of voting shares or voting interests of a licensee or a person in control of a licensee;
(2) A person that acquires control of a licensee by devise or descent;
(3) A person that acquires control of a licensee as a personal representative, custodian, guardian, conservator, or trustee, or as an officer appointed by a court of competent jurisdiction or by operation of law;
(4) A person that is exempt under § 45-7-104(6);
(5) A person that the commissioner determines is not subject to subsections (a) and (b) based on the public interest;
(6) A public offering of securities of a licensee or a person in control of a licensee; or
(7) An internal reorganization of a person in control of the licensee where the ultimate person in control of the licensee remains the same.
(j) Persons exempt under subdivisions (i)(2), (3), (4), (6), or (7) in cooperation with the licensee shall notify the commissioner within fifteen (15) days after the acquisition of control.
(k)

(1) The requirements of subsections (a) and (b) do not apply to a person that has complied with and received approval to engage in money transmission under this chapter or was identified as a person in control in a prior application filed with and approved by the commissioner; provided, that:

(A) The person has not had a license revoked or suspended, or controlled a licensee that has had a license revoked or suspended while the person was in control of the licensee in the previous five (5) years;
(B) If the person is a licensee, the person is well-managed and has received at least a satisfactory rating for compliance at its most recent examination by this state, if such rating was given;
(C) The licensee to be acquired is projected to meet the requirements of §§ 45-7-135, 45-7-136, and 45-7-137 after the acquisition of control is completed, and if the person acquiring control is a licensee, that licensee is also projected to meet the requirements of §§ 45-7-135, 45-7-136, and 45-7-137 after the acquisition of control is completed;
(D) The licensee to be acquired will not implement any material changes to its business plan because of the acquisition of control, and if the person acquiring control is a licensee, that licensee also will not implement any material changes to its business plan because of the acquisition of control; and
(E) The person provides notice of the acquisition in cooperation with the licensee and attests to subdivisions (k)(1)(A)-(D) in a form and in a medium prescribed by the commissioner.
(2) If the notice is not disapproved within thirty (30) days after the date on which the notice and attestation were determined by the commissioner to be complete, then the notice is deemed approved.
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