(a) A licensee shall provide each prospective customer, before consummation of a flex loan plan, a written explanation, in clear, understandable language, of the interest, fees, and charges to be charged by the licensee. The style, content and method of executing the required written explanation shall comply with federal truth-in-lending laws and shall contain a statement that the customer may prepay the unpaid balance in whole or in part at any time without penalty. The commissioner may promulgate rules establishing additional requirements in order to assure complete and accurate disclosure of the interest, fees, and charges to be charged by a licensee under a flex loan plan.

Terms Used In Tennessee Code 45-12-112

  • Commissioner: means the commissioner of financial institutions or the commissioner's designee. See Tennessee Code 45-12-102
  • Department: means the department of financial institutions. See Tennessee Code 45-12-102
  • Flex loan: means a loan made pursuant to a flex loan plan. See Tennessee Code 45-12-102
  • Flex loan plan: means a written agreement subject to this chapter between a licensee and a customer establishing an open-end credit plan under which the licensee contemplates repeated noncommercial loans for personal, family, or household purposes, that:
    (A) May be unsecured or secured by personal property. See Tennessee Code 45-12-102
  • Licensee: means a person licensed to offer flex loans pursuant to this chapter. See Tennessee Code 45-12-102
  • Right of rescission: Right to cancel, within three business days, a contract that uses the home of a person as collateral, except in the case of a first mortgage loan. There is no fee to the borrower, who receives a full refund of all fees paid. The right of rescission is guaranteed by the Truth in Lending Act (TILA). Source: OCC
  • 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
  • written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
(b) The account-opening statement for any flex loan plan shall include, along with other state or federal law requirements:

(1) A next-business-day customer’s right of rescission for any requested draw under the flex loan plan; and
(2) A notice informing the customer that complaints may be made to the department, including the department’s telephone number and address.
(c) The account-opening statement for any flex loan plan shall not require or provide the licensee the authority to require the customer to draw the full amount of credit available under a flex loan plan at any time.
(d) A licensee shall provide customers with a periodic billing statement in compliance with federal truth-in-lending laws.
(e) If two (2) or more customers having the same residence are authorized to obtain extensions of credit under the flex loan plan, the statement of provisions of the plan shall be provided to one (1) of the customers as may be designated in the plan, and the billing statements required by law shall be rendered to such customer.
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