(a) Title pledge agreements and property pledge agreements made pursuant to this chapter shall not exceed thirty (30) days in length. However, the agreements may provide for renewals for additional thirty-day periods, which may occur automatically, unless one (1) of the following has occurred:
Terms Used In Tennessee Code 45-15-113
Annual percentage rate: The cost of credit at a yearly rate. It is calculated in a standard way, taking the average compound interest rate over the term of the loan so borrowers can compare loans. Lenders are required by law to disclose a card account's APR. Source: FDIC
Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
Person: means an individual, any sole proprietorship, general partnership, corporation or limited liability company duly qualified to do business in Tennessee. See Tennessee Code 45-15-103
Pledgor: means the individual or individuals obligated to repay the loan. See Tennessee Code 45-15-103
Property pledge agreement: means any written bailment or similar agreement whereby a title pledge lender agrees to make a loan of money to a pledgor, and the pledgor agrees to the title pledge lender's taking physical possession of unencumbered titled personal property owned by the pledgor, and taking possession of the personal property certificate of title. See Tennessee Code 45-15-103
Title pledge agreement: means a thirty-day written agreement whereby a title pledge lender agrees to make a loan of money to a pledgor, and the pledgor agrees to give the title pledge lender a security interest in unencumbered titled personal property owned by the pledgor. See Tennessee Code 45-15-103
Title pledge lender: means any person engaged in the business of making title pledge agreements or property pledge agreements with pledgors. See Tennessee Code 45-15-103
Title pledge office: means the location at which, or premises in which, a title pledge lender regularly conducts business. See Tennessee Code 45-15-103
Titled personal property: means any personal property, the ownership of which is evidenced and delineated by a state-issued certificate of title. See Tennessee Code 45-15-103
(1) The pledgor has redeemed the pledged titled personal property or certificate of title by paying all principal, interest, and customary fees due in accordance with the title pledge agreement or property pledge agreement;(2) The pledgor has surrendered possession, title and all other interest in and to the titled personal property and the certificate of title to the title pledge lender;(3) The title pledge lender has notified the pledgor in writing that the title pledge agreement or property pledge agreement is not to be renewed; or(4) Default by pledgor of any obligation pursuant to the title pledge agreement or property pledge agreement.(b)(1) Except as provided in subdivision (b)(2), where the statement required by this subsection (b) is hand delivered at the time of renewal, each title pledge lender shall furnish the pledgor with a statement at least five (5) days prior to the beginning of any period of renewal of the title pledge agreement. The statement shall include the agreement number, the annual percentage rate, the monthly rate of interest, the monthly fee rate, the original principal balance of the loan, the current payoff balance of the loan, the amount of all renewal fees, and the amount of any interest, fees or other reimbursements allowed pursuant to § 45-15-111(b) that have accrued since the last statement required by this subsection (b) was issued to the pledgor. The statement shall also include the payment amount required to pay off the title pledge loan in full if payment is made with cash or certified funds by the end of the title pledge agreement or any renewal of the title pledge agreement, and the exact date through which that payoff balance will be honored.(2) If the title pledge loan is past due, the statement shall also include the number of days past due as of the statement date, the minimum payment required and the exact date by which the minimum payment must be received in order to reinstate the account to current status. The statement shall also include the telephone number, the normal business hours of operation, and the primary contact person at the office of the title pledge lender. The statement shall be sent to the pledgor by first class mail, postage prepaid, within five (5) days of the end of the title pledge agreement or hand delivered at the time of renewal, pending any renewal of the title pledge agreement.(c) A pledgor has the right to cancel the pledgor’s obligation to make payments under a title pledge agreement or property pledge agreement, until the close of the next business day after the day when the pledgor signs a title pledge agreement or property pledge agreement, if the pledgor returns the original check or cash to the location where the loan was originated. For the purpose of this section, “business day” means any day that the title pledge office is open for business.(d) Notwithstanding any provision of this chapter to the contrary, beginning with the third renewal or continuation and at each successive renewal or continuation thereafter, the pledgor shall be required to make a payment of at least five percent (5%) of the original principal amount of the title pledge transaction, in addition to interest and fees authorized by this chapter. Interest and fees authorized by this chapter at each successive renewal or continuation shall be calculated on the outstanding principal balance. Principal payments in excess of the five percent (5%) required principal reduction shall be credited to the outstanding principal on the day received. If, at the maturity of any renewal requiring a principal reduction, the pledgor has not made previous principal reductions adequate to satisfy the current required principal reduction, and the pledgor cannot repay at least five percent (5%) of the original principal balance and any outstanding interest and fees authorized by this chapter, the title pledge lender may, but shall not be obligated to, defer any required principal payment until the end of the title pledge agreement or property pledge agreement. No further interest or fees may accrue on a principal amount thus deferred.
