RESOLUTION NO. RS2008-136

A resolution requesting the Davidson County Delegation to the Tennessee General Assembly to introduce and enact the necessary legislation to impose restrictions on the amount of fees state chartered banks can charge for cashing checks and for insufficient funds.

WHEREAS, Title 45 of the Tennessee Code Annotated provides for the regulation of banks and financial institutions; and

WHEREAS, the Tennessee Department of Financial Institutions has the authority under state law to regulate state chartered banks; and

WHEREAS, many state chartered banks in Tennessee currently charge a large fee for checks returned for insufficient funds, and for cashing checks presented by non-accountholders; and

WHEREAS, state law does not regulate the amount of fees state chartered banks may charge their customers for insufficient funds and for check cashing; and

WHEREAS, the Tennessee Supreme Court decision of Wallace v. National Bank of Commerce, 938 S.W.2d 684 (Tenn. 1996) held that bank fees are a matter of contract between the bank and the customer, and as long as the contract informs the customer of the fees, then the banks have not breached the common law duty of good faith; and

WHEREAS, since the courts have been unwilling to find some of these fees to be unreasonable, it is fitting and proper that Tennessee General Assembly enact the appropriate regulations to protect the public from these excessive fees.

NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY:

Section 1. That the Metropolitan County Council hereby goes on record as requesting the Davidson County Delegation to the Tennessee General Assembly to introduce and enact the necessary legislation to impose restrictions on the amount of fees state chartered banks can charge for cashing checks and for insufficient funds.

Section 2. The Metropolitan Clerk is directed to send a copy of this Resolution to each member of the Davidson County Delegation to the Tennessee General Assembly.

Section 3. That this Resolution shall take effect from and after its adoption, the welfare of The Metropolitan Government of Nashville and Davidson County requiring it.

Sponsored by: Jerry Maynard, Lonnell Matthews, Frank Harrison, Walter Hunt, Erik Cole