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SB 2071

Consumer Protection - As introduced, prohibits a person from requiring another to use programmable money for a transaction; prohibits an issuer of programmable money from denying a transaction based upon certain factors; requires an issuer of programmable money that denies a transaction to provide reasons for the denial to the affected party upon request; designates violations to be violations of the Consumer Protection Act of 1977 and provides for other forms of relief and enforcement. - Amends TCA Title 47.

114th Regular Session (2025-2026) Introduced by Bo Watson

The bill bans forcing programmable money use, prohibits discriminatory transaction denials, and requires issuers to disclose denial reasons and face enforcement.

Assigned to General Subcommittee of Senate Commerce and Labor Committee
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Bill Summary · SB 2071

Summary of Tennessee SB 2071 / HB 2039 (Session 114)

Aimed at regulating programmable money in Tennessee, this bill would prohibit requiring use of programmable money for transactions, and it imposes anti-discrimination-like safeguards and disclosure requirements on issuers of programmable money. It designates violations as unfair or deceptive acts or practices under the Tennessee Consumer Protection Act of 1977 (TCPA).

1. Purpose and Intent

  • Prohibit coercion to use programmable money for transactions.
  • Prevent denial of transactions by issuers based on protected characteristics or other banned criteria.
  • Provide verifiable reasons for any denial when requested.
  • Integrate protections into the TCPA for enforcement and remedies.

2. Key Provisions and Changes

Definition and Scope

  • Adds a definition of “programmable money” (new TCA §47-1-201(b)( ), introduced as a new subsection) with the following characteristics:
    • Can be encoded with rules/conditions for automatic control under predefined parameters.
    • Capable of denying/approving specific transactions.
    • Allows user-specific restrictions (usability, location, time, identity of parties, etc.).
    • May expire or diminish beyond ordinary inflation.
    • Can be used to implement a social credit score system.
  • Excludes: central bank digital currency (CBDC) and ordinary “programmable money” is distinguished from some other forms (as per revised definitions).

Prohibitions (New Part 47-10-301 et seq.)

  • It is unlawful to require a person to use programmable money for any transaction. Prohibiting: offering or accepting payments only in programmable money and rejecting nondigital alternatives free of charge.
  • It is unlawful for issuers of programmable money to deny a transaction based on:
    • Political opinions/speech/affiliations.
    • Religious beliefs/exercise/affiliations.
    • Gender, skin color, ethnicity, sexual orientation.
    • Medical history (including vaccination status) or related treatment decisions.
    • Location, purchase history, or browsing history.
    • Place of residence or current location.
    • Any factor related to a person’s business sector.
    • Use of a social credit score or criteria listed in (b) including political/religious/identity factors, medical history, location/purchase/browsing history, firearm ownership/engagement, fossil fuel-related activities, stance on government actions on immigration/drug/human trafficking, or other lawful acts.
  • It is unlawful to cause or allow denial/failure of transactions based on the criteria in (b), including via automation, programming, or algorithms used by the issuer or its affiliates.

Disclosure of Denial Reasons

  • If a denial occurs, either party to the denied transaction may request a statement of specific reasons within 90 days.
  • Issuer must provide the statement within 30 days, including:
    • A detailed explanation of the basis for denial/restriction/termination.
    • A copy of the terms of service.
    • Specific provisions of the terms of service relied upon to refuse service.

Exceptions

  • The section does not prohibit denying a transaction that constitutes a criminal offense or payment for a criminal act.

3. Affected Parties

  • Issuers of programmable money: Banks or other entities issuing programmable money would face prohibitions on discriminatory denials and must provide denial rationales upon request.
  • Consumers/transaction participants: Individuals and entities entering into programmable money transactions have a right to request and receive reasons for denials.
  • State regulators:
    • Department of Financial Institutions (DFI) can pursue enforcement against state-chartered banks issuing programmable money.
    • Secretary of State can rescind an issuer’s authority to operate in Tennessee for knowing/intentionally/repeated violations.
    • Violations are treated as TCPA (unfair or deceptive acts or practices).

4. Procedural and Timeline Aspects

  • Effective date: July 1, 2026.
  • Violations: Classified as TCPA violations; penalties and procedures follow TCPA provisions.
  • Legal remedies:
    • Statutory and declaratory relief, actual and punitive damages.
    • Attorneys’ fees for prevailing plaintiffs.
    • Punitive damages: up to three times actual damages or three times attorneys’ fees, whichever is greater.
  • Venue: Suit may be filed in chancery court in various counties (plaintiff’s county, county of violation, domicile of defendant, or Davidson County).
  • Severability: If any provision is invalid, the rest remains in effect.
  • Additional enforcement: Quo warranto or other proceedings may be brought by the DFI against a state-chartered bank that violates the act.

5. Fiscal and Commerce Impact

  • Fiscal note indicates “not significant” impact to SOS and DFI; limited expected increase in complaints handled by AG’s office within existing resources.
  • Impact on commerce: Not anticipated to be significant; no expected large effects on jobs or state revenue.
  • Banking/cryptocurrency note: The act does not prohibit private cryptocurrency investment (47-10-304).

6. Supporting Materials

  • Fiscal Review notes classify impact as not significant.
  • Co-sponsor: Senator Bo Watson.

This bill would, if enacted, create clear prohibitions against forcing programmable money usage, require transparency in denial decisions, and empower state agencies to enforce protections and revoke authorizations for violators.

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

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