Banks and Financial Institutions

Plain English Breakdown

The candidate explanation included the term 'holding company' which was not directly supported in the provided official source material. The meaning of a holding company was also removed as it is not relevant to the bill's requirements.

Financial Audit Requirements for Tennessee Banks

This bill requires state-chartered banks in Tennessee to get an annual financial audit and report findings to regulators.

What This Bill Does

• Requires state-chartered banks to have their financial statements audited by a certified public accountant at least once every 15 months, unless the bank's financial statements are included in the audit of its holding company's consolidated statements.
• Directs bank boards to review the audit results, discuss them, and record these actions in meeting minutes.
• Necessitates that each bank sends a copy of its external audit report to the commissioner within 45 days after receiving it.
• Requires banks to inform the commissioner when they hire or change their independent public accountant.

Who It Names or Affects

• State-chartered banks in Tennessee
• Independent certified public accountants who perform audits for these banks

Terms To Know

annual audit

A yearly review of a bank's financial statements by an independent accountant.

Limits and Unknowns

• The bill does not specify what happens if a bank fails to comply with these requirements.
• It is unclear how this act will be enforced by regulatory bodies.

Official Summary Text

Abstract summarizes the bill.

Current Bill Text

SENATE BILL 1280
By Johnson

HOUSE BILL 109
By Lamberth

HB0109
000179
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 45,
relative to financial institutions.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 45-2-402, is amended by deleting
subsection (c) and substituting instead the following:
(c) All Tennessee state-chartered banks shall obtain an annual audit of their
financial statements by an independent certified public accountant at least once in each
calendar year at intervals of no more than fifteen (15) months, unless the bank's financial
statements are included in the audit of its holding company's consolidated financial
statements. The board shall review and discuss the audit and record such in the
minutes. Each bank shall provide to the commissioner a copy of the independent
external audit, including any management letters, within forty-five (45) days of receiving
the external audit, and shall promptly notify the commissioner when any independent
public accountant is initially engaged to perform external auditing work, or when a
change in, or termination of, the bank's independent accountant occurs.
SECTION 2. This act takes effect upon becoming law, the public welfare requiring it.