Hard-working Tennesseans without bank accounts often turn to one of more than 600 licensed check cashing businesses around the state. These customers should know that Tennessee law offers them protection from potential excessive fees and misleading or deceptive advertising by check cashing businesses.
Under Tennessee law, licensed check cashing businesses are forbidden to charge fees in excess of five percent of the face value of the check or other instrument or $5.00 (whichever is greater). However, there is an exception to this provision for personal checks and money orders where the limit is 10 percent of the instrument's face value or $5.00 (whichever is greater). In addition, for certain state or federal public assistance or social security checks made out to the person cashing the check, the cap is three percent three percent of the face value of the check or $2 (whichever is greater). There may be some persons who cash checks for a fee in connection with the retail sale of goods or services that are not subject to these limitations. These laws are available for inspection at Tennessee Code Annotated § 45-18-103(3).
Many check cashing companies advertise rates that are lower than these limits. When this is the case, the law requires that they honor the amount of the advertised fee. The law states, "No licensee may advertise, print, display, publish, distribute, or broadcast, or cause to be advertised, printed, displayed, published, distributed, or broadcast any statement or representation that is misleading, or deceptive, or that omits material information." These provisions of the law are located at Tennessee Code Annotated § 45-18-121(g).
Therefore, a check cashing business may not advertise one fee then charge another higher fee once the customer has handed over the check. Other provisions of the law prohibit business practices that cause the customer to pay additional fees by accepting coupons or some other form of payment other than cash.
Check cashing businesses that violate the law may be subject to civil penalties. Some check cashing businesses must be licensed by the Tennessee Department of Financial Institutions, and they could have their license suspended or revoked for violations of the law. If you believe that a check cashing company licensed in Tennessee is not following the provisions of the law, you can file a written complaint with the Tennessee Department of Financial Institutions at the following address:
Tennessee Department of Financial Institutions
414 Union Street, Suite 1000
Nashville, TN 37219
615-741-2236 or 1-800-778-4215