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SB 1078

Consumer Protection - As enacted, enacts the "Debt Resolution Services Act." - Amends TCA Title 47, Chapter 18.

114th Regular Session (2025-2026)

Tennessee establishes licensing and operational standards for debt resolution service companies to protect consumers from predatory practices and fraud in debt settlement negotiations.

Comp. became Pub. Ch. 287
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Bill Summary · SB 1078

Legislative bill overview

SB 1078 enacts Tennessee's "Debt Resolution Services Act," establishing new regulatory requirements for companies that offer to negotiate, settle, or resolve consumer debts. The law amends Title 47, Chapter 18 of the Tennessee Code to create licensing, disclosure, and operational standards for debt resolution service providers operating in the state.

Why is this important

Debt resolution services operate in a largely unregulated space where consumers are vulnerable to predatory practices, including upfront fees, unrealistic settlement promises, and damage to credit scores. This legislation creates consumer protections and accountability mechanisms to reduce fraud and abuse in an industry that directly affects financial vulnerability and creditworthiness of Tennessee residents.

Potential points of contention

  • Industry compliance costs: Debt resolution companies may face increased operational expenses from licensing requirements and compliance obligations, potentially raising service costs for consumers or reducing market competition
  • Scope and definition clarity: The bill's specific definitions of regulated "debt resolution services" could either be too broad (capturing legitimate financial counseling) or too narrow (allowing problematic services to operate under different labels)
  • Enforcement resources: Effectiveness depends on adequate state resources for monitoring and enforcement; underfunding could limit practical consumer protection despite the law's intent

Compiled from official sources — confirm details with the bill’s official record.

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