Which place’s debt rules apply—and who can help?

S_TN, PASS-01 — Tennessee provider market access and consumer fees

Research baseline: October 22, 2026, Pacific. Actual public-source access/check date: October 23, 2026, Pacific.

Tennessee has statutory licensing and registration pathways for these services. The consequential finding is that its framework changed in 2026, and its older settlement-fee limits had already changed in 2014. A Tennessee fee entry that simply says “$400 or 4% setup fee” or “30% of savings” would miss those changes. The official legislative records establish both enactments, although the signed chapter PDFs for those amendments were inaccessible. Tennessee General Assembly+3

This pass establishes substantial statutory findings through the primary legislative material actually read. It does not verify the exact October 2026 inflation-adjusted consumer dollar limits under Part 55 or the complete operative June 2026 regulations. Those remain explicit holds. No CPI calculation substitutes for an administrator’s adopted and published amounts.

This is the provider-access/consumer-fees component only. It does not constitute Tennessee acceptance, A066 acceptance, independent review, or publication clearance.

Identifier convention: The tables contain the full identifiers. In the discussion, C016 means S_TN-P1-C016, and S005 means S_TN-P1-S005.

A. Substantive findings

1. Classification: what activity falls within which framework?

Two statutory frameworks must be evaluated

Part 55 — Uniform Debt-Management Services Act. Its core definition covers acting between an individual and creditors to obtain more favorable repayment terms. It reaches both ordinary concessions and principal-reduction services. The core definition does not require possession of the individual’s money.

Part 58 — Debt Resolution Services Act. The adopted enactment reaches programs represented expressly or implicitly as negotiating, settling, or otherwise changing payment or other debt terms with unsecured creditors. It expressly includes reductions in balances, interest rates, and fees. Consequently, principal reduction is not the sole classification test. Part 58’s operational provisions prohibit the licensee from receiving or controlling consumer money except earned fees. [C002–C004; S001, original §5402; S005, §§5802, 5809(c)(12), 5814(a)(5).] capitol.tn.gov

The 2009 public chapter prints its provisions as §§47-18-5401 onward; the subsequent codification places this Act in Part 55. References below distinguish the original enactment’s numbering from the corresponding codified section.

[C002–C006, C008, C010–C013, C041.] capitol.tn.gov+1

Resident and remote-provider nexus

Part 55’s registration provision turns on whether the provider reasonably should know the individual resides in Tennessee when agreeing to provide services. Its exclusions address situations in which the provider has no reason to know of Tennessee residence. Part 58 likewise contains a no-reason-to-know-residence exemption.

An out-of-state office or remote delivery is not itself an exemption. Conversely, these provisions should not be rewritten as an unconditional rule covering every transaction involving a person who later moves to Tennessee. [C006; S001, original §§5403–5404; S005, §5804(a)(10).] capitol.tn.gov

2. Market access, exemptions, and the 2026 transition

Licensing and registration authority

The responsible authority is the Tennessee Department of Commerce and Insurance, acting through the Commissioner or authorized administrator.

• Part 55: registration is required for covered provision to a person whose Tennessee residence the provider reasonably should know. Employees and agents of a registered provider do not require a separate registration under the cited provision.
• Part 58: a person must obtain a license before providing or offering covered debt-resolution services. The statute specifies a primary-business-address license, nontransferability, and conditions for assumed names.

These are actual statutory pathways, not permissions inferred from a regulator’s homepage. Filing an application or paying the application fee does not establish that a license has issued. [C007; S001, original §5404; S005, §5803.] capitol.tn.gov

Exemptions are activity- and entity-specific

[C008–C012, C041; S001, original §§5402–5403, 5409; S005, §§5802(4), 5804.] capitol.tn.gov

An attorney relationship must be real and satisfy the statutory conditions. A nonlawyer company does not acquire the attorney exemption merely by retaining, referring to, or affiliating with a lawyer.

Similarly, Part 58’s marketer exception requires both marketing on behalf of a licensee and not otherwise providing debt-resolution services. Express prohibitions and advertising restrictions still reach such marketers. A lead business that also performs covered services cannot assume this exception. [C009, C012; S005, §§5804(b), 5814, 5816.]

Effective date and transition

The official HB0743 history shows adoption of HA0187 and HA0188, passage, gubernatorial signature on April 24, 2025, and assignment as Public Chapter 287. The enacted legislative chain provides:

• July 1, 2025 effectiveness for rulemaking.
• January 1, 2026 effectiveness for other purposes.
• Application to conduct and license applications/renewals from the operative date.
• Preservation of specified pre-January 2026 Part 55 transactions, licenses, and resulting rights and duties.

TDCI’s current instructions say an existing debt-management licensee may continue under that license until expiration and then apply initially under Part 58 if it meets the debt-resolution criteria. That procedural statement does not, by itself, answer which substantive fee rules govern a new contract made during the remaining life of an old license. [C001, C013; S005, §5820 and §3; S006; S007; S011.] capitol.tn.gov+2

Hold: The full current rules and an authoritative interpretation are still needed for the old-license/new-agreement situation and the for-profit custodial-DMP overlap. Part 55 should not be described as wholly repealed.

3. Consumer fee structures, limits, adjustment, and historical reconciliation

A decisive historical correction: July 1, 2014

The original 2009 law contained:

• Settlement setup fees of the lesser of $400 or 4% of inception debt.
• Settlement monthly fees.
• A 17% aggregate enrolled-debt method.
• A 30%-of-savings method subject to a 20% aggregate principal-debt ceiling.

The official 2014 SB1446 record expressly shows passage without amendments and a July 1, 2014 effective date. Its actual bill text deletes the settlement setup/monthly provisions and replaces the former settlement percentage provisions with performance and allocation requirements.

Those old settlement amounts are historical. They are not established current Tennessee settlement caps. [C014; S001, original §5423(d), (f); S002, §§1–3; S003.] Tennessee General Assembly+1

Part 55 fee provisions

The following distinguishes verified statutory base amounts from an unverified current adjusted ceiling.

[C015–C022; S001, original §§5423–5424, 5428; S002, §§1–2.] capitol.tn.gov

Education-paragraph citation discrepancy: The enacted 2014 bill redesignates the former education paragraph from (d)(4) to (d)(2). The unofficial 2025 reproduction retains deleted-paragraph placeholders and places education at (d)(4), with the corresponding refund reference. The substantive refund requirement is supported by the primary amendment; the official current codifier numbering remains to be confirmed. This is not a basis to omit the refund.

Inflation adjustment: established mechanism, exact amounts held

The original provision corresponding to §47-18-5532(f)–(g) directs the administrator to:

• Adopt replacement dollar amounts by rule using CPI-U or a properly adopted substitute.
• Establish a base year.
• Adjust effective July 1 when the specified December 31 comparison reaches at least a 10% change.
• Round §5523 consumer-fee amounts to the nearest dollar, while other listed amounts use the specified $100 rounding.
• Notify registered providers and make changes public.

I did not obtain the current adopted base year and published adjusted consumer-fee schedule. The nominal $50/$10/$50/$100/$25 figures therefore remain statutory-base figures, not certified October 2026 maxima. [C019; S001, original §5432(f)–(g); S017, S019 held.]

Part 58 fee structures

The adopted §5813 establishes two permissible allocation methods for debts resolved individually:

1. Proportional method: Individual-debt fee / total program fee = that debt’s enrollment balance / total enrollment balance.
2. Savings method: A consistent percentage applied across debts to the difference between the enrollment balance and the amount actually paid to satisfy the debt.

No numerical consumer dollar or percentage ceiling appears in the adopted §5813 text. That is narrower than a finding that Tennessee permits unlimited fees: the complete June 2026 rules remain unread, and the statute imposes agreement, performance, payment, and allocation requirements. No 20%, 25%, or 30% rate in an example below is a state-approved maximum. [C023–C026; S005, §5813(a)–(b).]

The statute separately excludes qualifying dedicated-account administration charges and third-party legal-service-provider charges from its particular definition of licensee debt-resolution-service fees. These exclusions do not establish the legality of every third-party charge or an arrangement that disguises the provider’s compensation. [C027; S005, §5813(c)–(d).]

Part 58 also permits deferral of the licensee’s fee without additional expense to the consumer. Its separate language concerning arranging credit requires a separately authorized or exempt lender; that provision does not itself establish lending authority for the debt-resolution provider. [C042; S005, §5809, as renumbered to (e) by S006.]

4. When fees may be requested or received

State requirements

Part 55 ordinary DMP: The provider and individual must first sign an agreement satisfying the referenced agreement/prohibited-practice provisions before debt-management charges or payment. This state rule must be combined with any independently applicable federal timing restriction. [C015.]

Part 55 settlement after the 2014 amendment: No fee or consideration may be requested or received until the provider has obtained the required valid debt alteration, the individual has made at least one payment under the creditor/debt-collector agreement, and individual-debt allocation satisfies the proportional or savings method. [C022.]

Part 58: Section 5813 requires:

1. A signed compliant provider-consumer agreement.
2. At least one debt altered under the required valid consumer-creditor resolution agreement.
3. At least one consumer payment under that agreement.
4. The prescribed allocation for debts handled individually.

A “setup,” “membership,” or “monthly” label does not bypass the direct-and-indirect-charge language. [C023–C026.] capitol.tn.gov

Installment-settlement qualification: A first payment can satisfy the stated payment trigger. It does not mean savings equal the enrollment balance minus only that first installment. The savings definition refers to the amount paid to satisfy the debt. Exact valuation before completion, and fee consequences if an installment resolution later fails, remain held for authoritative interpretation. [C025, C040.]

Cancellation, earned fees, and refunds

Part 58: The consumer may terminate without penalty through the listed electronic, written, or recorded-telephone methods. Fees earned before receipt of termination notice may survive, but only if they satisfy §5813. Termination does not accelerate fees for unresolved debts. [C028; S005, §§5810–5811.]

There are two account-notification clauses:

• §5809(a)(5): notify the dedicated-account provider within five business days after receiving the consumer’s termination notice.
• §5810(b): advise the consumer within two business days, then notify the account provider no later than five business days after that advice, absent further instructions.

Both must be preserved. Applying the receipt-based five-business-day outside deadline satisfies the shorter express requirement; the later clause should not be represented as permission to wait seven business days. [C029.]

Part 55: The enacted provisions establish an initial cancellation right through midnight of the third business day after assent, a 30-day right where specified agreement/notice requirements are missing, and refund language accompanying cancellation. A valid emergency waiver requires the individual’s own qualifying statement; a routine preprinted waiver is insufficient. Later termination requires return of unexpended funds under the relevant provisions. [C030–C031; S001, original §§5419–5420, 5422(h), 5426.]

The residual 65% refund of an uncredited settlement setup fee appears in the original termination provisions and the unofficial current reproduction. Because the settlement setup authorization was deleted in 2014, that residual language cannot create a new setup-fee pathway. Its application requires lawful historical facts and further authoritative reconciliation. [C031.]

Federal TSR — common context, separately applicable

Where the TSR applies, 16 CFR §310.4(a)(5)(i) independently requires a qualifying debt alteration, a customer payment, and compliant proportional/savings allocation before fees are requested or received. Coverage is broader than principal reduction and can include DMP concessions. State exemptions do not themselves determine federal coverage. [C032–C033.] ecfr.gov+2

For a qualifying dedicated account, §310.4(a)(5)(ii) requires consumer ownership, institutional insurance, independence, prohibited referral-compensation safeguards, and return of funds other than properly earned fees within seven business days of the customer’s request. Tennessee’s notice-to-account-provider deadlines do not replace this federal return requirement. [C034.] ecfr.gov

The eCFR pages accessed October 23 displayed Title 16 as current through October 21, 2026. I did not silently convert that displayed currency date into October 23.

5. Actual public registration procedure and authorization lookup

The current TDCI instructions were opened and read.

[C035–C038; S011–S016.] tn.gov+5

The posted application materials include:

• Debt management: bond or permitted alternative, trust-account information, insurance, jurisdiction/service-of-process materials, financial statements, accreditation, personnel certification, agreement/fee forms, and relevant background checks.
• Debt resolution: business-tax compliance, financial statements, a posted $50,000 bond requirement, accreditation, proposed agreements/cancellation materials, fee schedules, and executive-officer background checks.

The Part 58 statute authorizes a commissioner-determined bond amount not greater than $50,000; TDCI currently instructs applicants to supply $50,000. These are different propositions. [C036.]

TDCI also maintains an actual approved accreditation/certification page. Its listed program restrictions include debt-resolution-only and nonprofit-only categories. Accreditation listing does not prove that a debtor-facing provider has a Tennessee license. [C037.] tn.gov

No named provider’s current authorization was established in this pass.

6. Bounded worked examples

These are plain-text illustrations. Dollar inputs are hypothetical. They do not establish a named provider’s license or approve a contractual rate.

Example 1 — one debt resolved within a larger program

Applicable structure: Part 58 proportional allocation.

Assumptions: Proper license, compliant agreement, enforceable disclosed total fee, and all required debt-resolution and first-payment conditions satisfied for Debt A.

Inputs:

• Total enrollment debt: $20,000.
• Debt A at enrollment: $5,000.
• Debt B at enrollment: $15,000.
• Agreed total program fee: $4,000.

Operator:

• Debt A share = $5,000 / $20,000 = 0.25.
• Debt A allocated fee = $4,000 × 0.25 = $1,000.

Result:

• $1,000 is the allocation for Debt A.
• The other $3,000 is not earned merely because Debt A reached its trigger.
• Before any qualifying debt agreement/payment, permissible requested or received service fee under this pathway is $0.

Units: U.S. dollars. All calculations are exact to cents; no rounding adjustment.

The implied 20% program price is a contract assumption, not a Tennessee ceiling. [C023–C024.]

Example 2 — prior earned fee payment and later cancellation

Continue Example 1.

Additional assumptions:

• Debt A’s $1,000 fee became earned under the lawful agreement.
• The consumer already paid $250 of that earned fee.
• Debt B remains unresolved.
• Consumer then terminates.

Calculation:

• Remaining earned Debt A fee = $1,000 − $250 = $750.
• Additional fee attributable to unresolved Debt B = $0.

Result:

• Cancellation alone does not erase the assumed previously earned $750.
• Cancellation does not make the $3,000 Debt B allocation payable.
• An unlawful advance fee would not become lawful merely by relabeling it a credit against this calculation.

Consumer-owned account funds require the separate applicable return analysis. [C024, C028, C034.]

Example 3 — lower-debt savings calculation

Applicable structure: uniform savings percentage.

Assumptions: Debt fully satisfied, contractual savings rate uniformly 25%, and all state timing/agreement conditions satisfied.

Inputs:

• Enrollment debt: $1,000.
• Later balance after added interest/fees: $1,200.
• Amount actually paid to satisfy the debt: $700.

Calculation:

• Statutory savings base = $1,000 − $700 = $300.
• Fee = $300 × 25% = $75.

Result: $75.

The $1,200 later balance is not substituted for the enrollment base. The 25% rate is an assumed contract input. Exact dollar result; no rounding. [C025.]

Example 4 — installment payment is not the savings amount

Inputs:

• Enrollment debt: $10,000.
• Resolution agreement requires $6,000 in installments.
• First installment: $100.

Incorrect operation:

• $10,000 − $100 = $9,900 “savings.”

Disposition:

• That $9,900 is not established statutory savings: $100 has not satisfied the debt.
• A lawful proportional-method fee may reach its stated trigger after the required first payment.
• The exact savings-method assessment before satisfaction, and consequences of later default, remain held.

This example demonstrates a boundary without inventing a refund or valuation rule. [C023–C025, C040.]

Example 5 — DMP base-schedule arithmetic, current adjusted ceiling held

Inputs: Three creditors remain when assessed.

Calculation:

• 3 × statutory-base $10 = $30.
• min($30, statutory-base $50 monthly maximum) = $30.

If six creditors remain:

• 6 × $10 = $60.
• min($60, $50) = $50.

Units: Dollars per month; exact arithmetic.

These are demonstrations of the unadjusted statutory formula, not verified October 2026 billable maxima. Applicable indexing and federal timing must still be resolved. [C016, C019, C033.]

Example 6 — education fee refunded after conversion

Assumptions:

• An $80 education fee was lawfully paid.
• Counseling ends on Day 0.
• The individual enters the provider’s service agreement on Day 60.

Calculation:

• 60 days < 90 days.
• Refund = previously paid qualifying education fee = $80.

Result: $80 refund; it is not merely an optional future-fee credit.

The assumption that the original $80 was lawful does not establish the current adjusted education ceiling. [C017–C019.]

Example 7 — timely Part 55 initial cancellation

Assumptions:

• No valid emergency waiver.
• Consumer sends effective cancellation within the initial three-business-day period.
• Provider received a $40 service fee and $200 intended for creditors.
• None of the $200 has been disbursed.

Calculation:

• Refund = $40 + $200 = $240.

Result: $240 under the cancellation-notice refund condition, with no invented percentage deduction. [C030.]

Example 8 — custody and nonprofit boundaries

Custody: A business proposes receiving $300 monthly into its own account for creditor distributions while relying solely on a Part 58 license.

Result: The Part 58 prohibition on receiving/controlling consumer money, apart from earned fees, prevents treating that license as sufficient authority. Resolve Part 55 applicability and the overlap first. No lawful custodial-fee scenario is assumed. [C004, C013.]

Nonprofit: An organization calls itself nonprofit and charges consumers for settlement.

Result: Verify the specific Part 58 exemption condition; then separately test Part 55 registration and fees. The marketing label establishes neither exemption nor fee permission. [C008.]

7. Component disposition

The statutory classification, fee-history correction, principal fee formulas, performance triggers, and public application route are substantively answered subject to the identified source qualifications.

The current rule text, indexed dollar amounts, certain overlapping-model classifications, and specified interpretation issues remain open. The full coverage and next-evidence table appears in Section D.

B. Source register

All checks below occurred October 23, 2026, Pacific. “Read” means actual page or PDF passage retrieval, including relevant PDF-page images where used. “Discovery” means a lead only. All state sources concern Tennessee unless identified as federal.

C. Claim register

Confidence terminology: “Established text” means the proposition is supported by the actual primary passages read. “Legislative chain” identifies the enacted-text reconstruction where the signed chapter was inaccessible. Neither designation claims that unread current regulations were cleared.

D. Full component coverage and remaining evidence

The highest-value next source is the official March 2026 rulemaking filing or the official May packet’s printed pages 471–499. That is a concrete missing-evidence target. Its retrieval would resolve more of this component than another general Tennessee overview.

E. Researcher self-check

• Actual primary reading: Relevant operative portions of the original 2009 public chapter; the complete two-page 2014 amendment bill and its no-amendments enactment record; the adopted 2025 House amendments and official enactment history; current TDCI application, fee, renewal, and accreditation instructions; the May 2026 official rule-review agenda; and the relevant federal regulation passages.
• Actual versus reconstructed: The signed 2014 and 2025 chapter PDFs were not read. The report expressly uses the official legislative chains and does not relabel bill/amendment documents as signed chapters.
• Currentness limits: The current official Lexis code did not return statutory text. The full June 2026 rules and current indexed consumer-dollar publication were not retrieved. A webpage crawl/update date was not treated as a legal effective date.
• Secondary material: The unofficial 2025 code reproduction was used to identify codification, history, and residual-reference issues. It was not elevated into official October 2026 verification. Search snippets and commercial tables were not used as controlling authority.
• Cases and interpretations: Targeted official-court and Attorney General searches did not yield a controlling decision resolving the listed disputes. That does not establish that no such authority exists.
• Examples: Contractual percentages are assumptions, not legal ceilings. DMP dollars are marked as unadjusted statutory bases. No setup-fee permission was manufactured from residual refund language.
• Actions and environment: Public research was performed in this conversation. No other Chat conversation, application, account change, contact, purchase, publication, or local-file deliverable was created. The ChatGPT model selector was not independently inspected or changed.
• Review status: This is a researcher self-check. It is not independent review, Tennessee acceptance, A066 acceptance, or publication readiness.

END S_TN PASS-01.