Tennessee committee advances bill to charge fees on transfers sent abroad

A Tennessee House Commerce Committee on Tuesday voted to advance a bill that would charge consumers a fee when money is sent from the state to foreign countries.

Representative Hill, the bill sponsor, told the committee HB2502 would impose a $10 fee per transaction plus 2% on amounts over $500 for individual transfers sent abroad. Hill said, citing the Department of Financial Institutions, that more than 16,000,000 transfers totaling about $5.5 billion are initiated in Tennessee and transmitted to foreign countries.

“The fee would be $10 per transaction and 2% of funds over 500,” the sponsor said. He added that the bill as amended exempts financial institutions following concerns raised in subcommittee and that government agencies are also exempt.

Supporters said the measure would capture transfers made through nonbank money-transfer services and help regulate commerce that currently bypasses state oversight. Leader Camper expressed concern about costs to service members and other individuals who rely on transfers while deployed or traveling, saying some people "are simply just trying to help a loved one." Camper said many users may not know which providers would collect the fee.

“I hear you, and I understand it. But I do think we’re gonna eventually be costing people more money,” Leader Camper said.

Representative Hill said traditional banks and platforms tied to banks (which are already exempt under existing law) would not be affected. The sponsor referenced carve-outs in the state’s 2019 money transmission modernization law for certain entities.

The committee called the question and the clerk recorded 17 ayes and 4 nays. With that vote, HB2502, as amended, was referred to the finance committee for further consideration.

Next steps: HB2502 will be reviewed by the finance committee, which will determine whether the measure moves forward to the full House calendar.