ÿWPC‘ `ÙvÙÿmƇ‘l\ÆC°SÇtho¸ÆfHfýøu«€?ÄïÂiF`&‹¬*ÌáŽ$‘ƒa ßrS¤D1aOg27 çúÅ~«‰ãbMqœ„êùe¬~ÿ”áͲ%V¬lÙ¤A¡›EmKkZÞ¾` ÏBù}iÏdm ÚU7§=rÿS;ˬx…ç0¾ýxl‹À:œ!Óê¿ÐM¨Á/»+2 …­FZë: L¥E¥Ò/)Ç;™uê²N3A_¦~£„è’Å.£Úá9[ƒJ»LÃŘÆSBëPŽø‰RŸâÿ (Ãë{%\KVÄÑŽ¿MzŽ€Q-ÉL·ÜSõso ó \Éÿæ"úJf(‹Øô!Ó×qÂt?ê^ ëü»×|àŒ:8 ¤Ôš>¼´è·kY›“œ÷•悦„’ö¸Ô 4­ƒoìºTM¨Ÿ7ƒuBH!*C }p ¡öÀ¸‡;W-çD”]G¾‡H¿ôŒö\£€4n{¢2±8|rÈQ¥Ä–^¨If\q…ïH!ç¼%ÏÇížbU×?92†:¦NƒÇ?| s™ï{»``ƒZXȘ†§¿ @ò—‘{hdzýe¤ÁrÃü‹¢ó±4(tIÁÄ–5I{`#Á@ % n­ 04´ UBè UN* wx 4|  Ÿ 0c§ U : 0ÒD ³ U :ÉU@U@C"ƒU :¥U:ßU:U:SÞU:k 72¥N×ÙnÛU:IUNƒbÑU:Ù^  mî6 B$U:A 1u{ 0cððððððððððððððððððððððððððððððððððððððððððððððððð ASSƦ 0Vl 0V 0D D5\˜HP LaserJet 4Si,ü,,,,,ü0X«<þ6X9`(*Courier 12pt10cpiXXxþ6X@ÉJQX@( ¤T$¡¡Ó  Ó<þ6X9`(*Courier 12pt10cpi(ÈhH  Z ‹6Times New Roman RegularÁ„'hH 3|x("Ê^$Ô€X!UX XXÔòòÚ  Ú1Ú  Úóó,ó‚ AZ"Arial Regular(‚(2Ò$¤¤Ý ƒ¤T!ÝÓ  ÓÝ  ÝÒ€°ÒÒÀ°ÒÔ€ôÊ¿òXXÔÔ€ôã4òòôÊ¿Ôà Ø àòòÚ  Ú0Ú  Úóó ©Ý ƒ Ò$ÝÓ  ÓÒ€°ÒÒÀ°ÒÔ€ôÊ¿òXXÔÔ€ôã4òòôÊ¿Ôà Ø àòòÚ  Ú1Ú  ÚóóÝ  Ý"Ô‡ ô= òòôã4ÔThe€Supreme€Court€may,€at€its€discretion,€answer€questions€of€law€certified€to€it€by€theÐ ,  ÐSupreme€Court€of€the€United€States,€a€Court€of€Appeals€of€the€United€States,€a€District€Court€of€theÐ ö Ê ÐUnited€States€in€Tennessee,€or€a€United€States€Bankruptcy€Court€in€Tennessee.€€This€rule€may€beÐ ¾ ’ Ðinvoked€when€the€certifying€court€determines€that,€in€a€proceeding€before€it,€there€are€questions€ofÐ † Z Ðlaw€of€this€state€which€will€be€determinative€of€the€cause€and€as€to€which€it€appears€to€the€certifyingÐ N " Ðcourt€there€is€no€controlling€precedent€in€the€decisions€of€the€Supreme€Court€of€Tennessee.ðð€Tenn.Ð ê ÐSup.€Ct.€R.€23,€ðð€1.,c½¬AZ‹"Arial Regular)LÀÄ  Z (CG Times Regular)LÀÄ  Z (CG Times Regular Ñ ` ÑÑ , Ñ,c½¬AZ‹"Arial Regular,c½¬AZ‹"Arial Regular,c½¬AZ‹"Arial Regular,kû¤AZ‹"Arial Regular ÔÝ ƒ Ò$ÝÓ  ÓÒ€°ÒÒÀ°ÒÔ€ôÊ¿òXXÔÔ€ôã4òòôÊ¿Ôà Ø àòòÚ  Ú3Ú  ÚóóÝ  ÝTenn.€Code€Ann.€ðð€56„7„105€(1994€Repl.)., øð AZ"Arial Regular'i) dÝ ƒ[½Ö"ÝÔUSUS.,ÔÝ  ÝÔ_ÔÔ€ X ™ XXXÔÔ€ 3; X X ™ÔÓ  Óò òÔ Ad ÔFILEDÔ€ X ™ X 3;ÔÐ  ÐÌAugust€30,€1999Ð    ÐÌCecil€Ô_ÔCrowsonÔ_Ô,€Jr.Ð xx ÐAppellate€Court€ClerkÔdAŠÔó ó, øð AZ"Arial Regular(ÖÃ9 Z ‹6Times New Roman Regular- ù-,c½¬AZ‹"Arial RegularŒx' ÿU‹ÿÀÀÀ äÝ ƒ Ò$ÝÓ  ÓÒ€°ÒÒÀ°ÒÔ€ôÊ¿òXXÔÔ€ôã4òòôÊ¿Ôà Ø àòòÚ  Ú2Ú  ÚóóÝ  ÝFormerly€the€Tennessee€Department€of€Insurance€and€Banking. d,†r‰AZ‹"Arial Regular3#37=CIQYag­­1.a.i.(1)(a)(i)1)a)(;3£$´´Ô2#ÔÚ  Ú0Ú  Ú.Ô3  Ôà0  àZ[\]_Eþÿ<<CÿÿƒLevel 1Level 2Level 3Level 4Level 5(.3½Ö$¢¢Ý ƒüœ!ÝÔUSUS.,ÔÝ  Ý(.3½Ö$££Ý ƒüœ!ÝÔUSUS.,ÔÝ  Ý($$””ò òÚ  Ú1Ú  Úó ó%%%%)ÿÿ!dxdxÝ ƒ¤T!ÝÓ  ÓÝ  ÝÔ_ÔѰÑÒ€°ÒÒÀ°ÒÑTR[ì AØ'LegalXà3Ø' Letter  AØ'ÿ Legalÿ3Ø'TÑÑ  Ñò òòòÔ€»÷y»XXÔÔ€ »xò»»»÷yÔÑ€©>ÑÑ€ÑÓ=€+•XÐXdÐd=ÓÌà@… … ÌàóóIN€THE€SUPREME€COURT€OF€TENNESSEEˆÐ   ÐÔ_ÔÔ_Ôà@{{(ÌàAT€NASHVILLEòòˆÐ 8 0 ÐÔ_Ôßx€Y_B2.jz°ÿ`  `€€@ÿEhT ` 8ttxP Œ ð È xßÔ_ÔÌóóÔ_ÔÔ_ÔÌÌÌà Ø àà 0 àà ˆ àà à àà 8 àà  àà è àòòÔ‡ Xëz X» »xòÔFOR€PUBLICATIONÔ#† »xò» X Xëz#ÔóóÐ °¨ ÐÔ€ Xëz X» »xòÔÌó óÓ*°,X†X “X°œX*ÓJOE€M.€HATHAWAY,€WILLIE€M.òòò òà 8 àóóó óà Û à)à è àò òFiled:ó ó€ò òAugust€30,€1999ó óÐ ˆ  ÐHATHAWAY,€and€CLARA€B.à 8 à€à Û à)à è àÐ €x  ÐÔ_ÔFULSONÔ_Ô,à 0 àà ˆ àà à àà 8 àà Û à)à è àÐ ph  Ðà Ø àà 0 àà ˆ àà à àà 8 àà Û à)à è àNO.€€01S01„9811„FD„00203Ð `X  Ðà Ø àà 0 àPlaintiffs/Respondents,à Û à)à è àÐ PH  Ðà Ø àà 0 àà ˆ àà à àà 8 àà Û à)Ð @8 Ðv.à Ø àà 0 àà ˆ àà à àà 8 àà Û à)à è àCertified€Questions€of€Law€fromÐ 0( Ðà Ø àà 0 àà ˆ àà à àà 8 àà Û à)à è àthe€United€States€District€CourtÐ   ÐFIRST€FAMILY€FINANCIALà 8 àà Û à)à è àfor€the€Middle€DistrictÐ  ÐSERVICES,€INC.,à ˆ àà à àà 8 àà Û à)à0 è àof€Tennessee.Ðøè$è$ Ðà Ø àà 0 àà ˆ àà à àà 8 àà Û à)à è àÐ ðè Ðà Ø àà 0 àDefendant/Petitioner.à Û à)à è à(John€T.€Nixon,€Judge)€à H! àÐ àØ ÐÌÌÌòòÓ<°,X†X ¡Ð ŽX°,X†X “X<ÓÌÌò òFor€the€Defendant/Petitioneróó:à 8 àà Û àà q àà è àòòFor€the€Plaintiffs/Respondentsóóà  # àó óÐ € x ÐVal€Sanfordà 0 àà ˆ àà à àà 8 àà Û àà q àà è àMalcolm€L.€Ô_ÔMcCuneÔ_ÔÐ p!h ÐA.€Scott€Derrickà ˆ àà à àà 8 àà Û àà q àà è àW.€Gary€BlackburnÐ `"X ÐWayne€L.€Robbins,€Jr.à à àà 8 àà Û àà q àà è àÔ_ÔMathewÔ_Ô€R.€Ô_ÔZennerÔ_ԀРP#H ÐÔ_ÔGULLETTÔ_Ô,€Ô_ÔSANDFORDÔ_Ô,à à àà 8 àà Û àà q àà è àBLACKBURN,€Ô_ÔSLOBEYÔ_Ô,Ð @$8 ÐROBINSON€&€MARTIN,€Ô_ÔPLLCÔ_Ô.à 8 àà Û àà q àà è àFREEMAN€&€€Ô_ÔHAPPELLÔ_ÔÐ 0%( ÐNashville,€Tennesseeà à àà 8 àà Û àà q àà è àNashville,€TennesseeÐ  &  Ðà Ø àÌÌà@00%Ìàòòò òFor€Amicus€Curiaeóó:òòó óˆÐ ð(è!# Ðà@SSÌàTennessee€Consumer€Finance€AssociationóóˆÐ à)Ø"$ Ѐà@>>#ÌàRobertson€M.€Ô_ÔLeathermanÔ_ԈРÐ*È#% Ðà@'ÌàSara€Ô_ÔFalkinhamÔ_ԈРÀ+¸$& Ðà@y y ÌàARMSTRONG,€ALLEN,€Ô_ÔPREWITTÔ_Ô,€GENTRY,€JOHNSTON€&€HOLMESˆÐ °,¨%' Ðà@  %ÌàMemphis,€TennesseeˆÐ  -˜&( ÐÌÌÌÌÌà@(ÌàòòÔ‡ ¼xò» X XëzÔò òO€P€I€N€I€O€Nà@@ìì*ìàóóó óÔ#† Xëz X» ¼xò(#ԈР@38,. ÐÌÌÌÌÌÌâ âÓ<°,X†X “X°,X†X ¡Ð ŽX<Óà Ø àà 0 àà ˆ àà à àà 8 àà Û àà è àà @ àà ˜ àÔ_ÔDROWOTAÔ_Ô,€J.à  # àÐ ø9ð25 ÐÑ©>Ñâ âÑ` °ÑÑ, Ñâ âÑ  ÑÔ_ÔÑ8€+•XdÈdÈ8ÑÓÓÓ  ÓÔ€X ™ X X XëzÔà Ø àPursuant€to€Rule€23€of€the€Rules€of€the€Supreme€Court€of€Tennessee,׃×Ý ƒ Ê^ÝÔ€X  X XX ™ÔòòÚ  Ú1Ú  ÚóóÝ  Ý×  ×Ô€X ™ X XX Ô€thisÐ ,  Ðâ âCourt€accepted€certification€of€the€following€two€questions€from€the€United€StatesÐ ø Ì ÐDistrict€Court€for€the€Middle€District€of€Tennessee:Ð Ä ˜ ÐÓÓÌà8 Ø àà 0 à1.€€In€determining€the€service€charge€that€an€industrial€loan€andÐ vJ Ðthrift€company€may€charge€under€Tenn.€Code€Ann.€ðð€45„5„403(1)(A)Ð \0 Ð(Supp.€1998)€upon€refinancing€a€loan,€is€the€amount€to€be€subtractedÐ B  Ðfrom€the€ð ðtotal€amount€of€the€loanðð€(as€defined€in€ðð€45„5„102(17)€(Supp.Ð (ü  Ð1998))€the€amount€of€the€new€loan€that€is€used€to€pay€all€or€a€portionÐ â  Ðof€the€outstanding€balance€of€the€old€loan€from€such€industrial€loan€andÐ ôÈ  Ðthrift€company€to€the€borrower?€€ÐÚ® Ø À!Ø À! ÐÌà8 Ø àà 0 à2.€€With€respect€to€a€violation€of€the€limitations€on€loan€chargesÐ ¦z  Ðand€interest€rates€that€are€imposed€by€the€Industrial€Loan€and€ThriftÐ Œ` ÐCompany€Act,€Tenn.€Code€Ann.€ðð€ðð€45„5„101€òòetóó€òòseq.óó,€are€a€borrowerððsÐ rF Ðremedies€under€Tennessee€law€limited€to€those€remedies€prescribedÐ X, Ðby€the€general€statute€pertaining€to€interest€and€other€charges€byÐ > Ðlenders,€Tenn.€Code€Ann.€ðððð€47„14„101€òòetóó€òòseq.óó?€€Ð$øØ À!Ø À! ÐÓ8ÓÌà Ø àWe€answer€the€foregoing€questions€in€the€affirmative.€€With€respect€to€the€firstÐ Öª Ðquestion€we€hold€that€in€determining€the€service€charge€that€an€industrial€loan€andÐ ¢ v Ðthrift€company€may€lawfully€impose€under€Tenn.€Code€Ann.€ðð€45„5„403(1)(A),€theÐ n"B Ðamount€to€be€subtracted€from€the€ð ðtotal€amount€of€the€loanðð€(as€defined€in€ðð€45„5„Ð :$ Ð102(17))€is€that€portion€of€the€refinancing€loan€that€is€used€to€pay€all€or€any€part€of€theÐ &Ú Ðinitial€loan€from€the€industrial€loan€and€thrift€company.€€However,€interest€on€the€initialÐ Ò'¦! Ðloan€that€would€have€accrued€after€the€date€of€the€refinancing€should€not€be€includedÐ ž)r# Ðwhen€computing€the€balance€outstanding€on€the€initial€loan.€€With€respect€to€theÐ j+>!% Ðsecond€question,€we€hold€that€a€borrowerððs€remedies€for€a€violation€of€the€limitationsÐ 6- #' Ðon€loan€charges€and€interest€rates€imposed€by€the€Industrial€Loan€and€ThriftÐ ,  ÐCompany€Act,€Tenn.€Code€Ann.€ðððð€45„5„101,€òòetóó€òòseq.óó,€are€limited€to€the€remediesÐ ø Ì ÐÔ‡X ™ X XX ™Ôprescribed€by€the€general€statutes€pertaining€to€interest€and€other€charges€byÐ Ä ˜ Ðlenders,€Tenn.€Code€Ann.€ðððð€47„14„101,€òòetóó€òòseq.óóÔ#†X ™ X XX ™Æ#ÔÐ d ÐÌà@ƒƒ-Ìàò òÔ‡XÄøX XX ™ÔÔ‡¼¥ë»XXÄøÔIÔ#†XÄøX»¼¥ëõ#ÔÔ#†X ™ XXXÄøÖ#Ôó ó.ˆÐ (ü  Ðà@; ; Ìàò òòòFACTUAL€AND€PROCEDURAL€BACKGROUNDó óˆÐ X,  Ðà Ø àóóThe€defendant/petitioner,€First€Family€Financial€Services,€Inc.,€is€registeredÐ 0  Ðwith€the€State€of€Tennessee€as€an€ð ðindustrial€loan€and€thrift€companyðð€as€defined€inÐ üÐ ÐTenn.€Code€Ann.€ðð€45„5„102(8)€(Supp.€1998).€€As€such,€it€is€in€the€business€ofÐ Èœ Ðextending€loans.€€Ð ”h ÐÌà Ø àPlaintiffs/respondents,€Joe€and€Willie€Hathaway€obtained€from€the€defendantððsÐ ,  Ðpredecessor„in„interest€a€loan€that€was€secured€by€a€lien€on€their€home€in€Nashville.€Ð ø!Ì ÐOn€September€27,€1995,€Mr.€and€Mrs.€Hathaway€refinanced€their€loan€with€FirstÐ Ä#˜ ÐFamily€Financial€Services,€Inc.€€On€that€day€they€executed,€in€exchange€for€theÐ %d Ðsecond€loan,€a€promissory€note€in€the€amount€of€$196,965€which€included€theÐ \'0  Ðprincipal€amount€of€the€second€loan€plus€pre„computed€interest€(in€the€amount€ofÐ ()ü" Ð$113,458.25)€thereon€over€the€15„year€life€of€the€second€loan.€€As€of€the€date€of€theÐ ô*È $ Ðsecond€loan,€the€outstanding€balance€of€the€Hathawaysðð€first€loan€from€theÐ À,”"& Ðdefendantððs€predecessor„in„interest€was€$76,602.85.€€Mr.€and€Mrs.€Hathaway€usedÐ Œ.`$( Ðproceeds€from€the€second€loan€to€pay€this€outstanding€balance,€thereby€completelyÐ X0,&* Ðretiring€the€first€loan.Ð $2ø', Ðâ âÐ ð3Ä). Ðà Ø àÔ‡X ™ X XX ™ÔThe€defendant€imposed€a€service€charge€which€was€calculated€by€Ô#†X ™ X XX ™™&#ÔsubtractingÐ ,  Ðâ â$76,642.85,€the€portion€of€the€loan€that€was€used€to€retire€the€initial€loan€balance,Ð ø Ì Ðfrom€$196,965,€the€total€amount€of€the€refinancing€loan.€€On€the€remaining€sum€ofÐ Ä ˜ Ð$120,332.14,€€the€defendant€assessed€a€four€percent€service€charge€of€$4,812.89.Ð d ÐÌà Ø àPlaintiff,€Clara€B.€Fulson,€also€obtained€a€loan€from€the€defendantððsÐ (ü  Ðpredecessor„in„interest€and€subsequently€engaged€in€two€refinancing€transactionsÐ ôÈ  Ðwith€the€defendant.€€In€each€of€those€transactions,€the€defendant€calculated€the€fourÐ À”  Ðpercent€service€charge€in€the€same€previously€described€manner.Ð Œ` ÐÌà Ø àThereafter,€the€Hathaways€and€Fulson€filed€a€complaint€against€the€defendantÐ $ø Ðin€the€Chancery€Court€for€Davidson€County,€on€behalf€of€themselves€and€ð ðothersÐ ðÄ Ðsimilarly€situated,ðð€€alleging€that€the€method€used€by€the€defendant€to€calculate€theÐ ¼ Ðfour€percent€service€charge€had€resulted€in€a€charge€in€excess€of€the€maximumÐ ˆ!\ Ðpermitted€by€Tenn.€Code€Ann.€ðð€45„5„403(1)(A)€(Supp.€1998).€€As€a€result,€theÐ T#( Ðplaintiffs€sought€ð ðthe€full€array€of€remedies€provided€in€T.C.A.€ðð€47„14„117€(1995).ðð€Ð  %ô ÐThe€complaint€also€alleged€that€the€excessive€service€charge€constituted€fraud,Ð ì&À  Ðnegligence,€misrepresentation,€unjust€enrichment,€and€violated€the€Federal€Truth€inÐ ¸(Œ" ÐLending€Act,€the€Federal€Real€Estate€Settlement€Procedures€Act,€and€the€TennesseeÐ „*X $ ÐConsumer€Protection€Act.Ð P,$"& ÐÌà Ø àAfter€removing€the€case€from€the€Tennessee€Chancery€Court€to€the€UnitedÐ è/¼%* ÐStates€District€Court€for€the€Middle€District€of€Tennessee,€the€defendant€filed€a€motionÐ ´1ˆ', Ðto€dismiss€for€failure€to€state€a€claim€upon€which€relief€could€be€granted.€€The€motionÐ €3T). Ðrecited€the€following€grounds€in€support€of€dismissal:Ð L5 +0 ÐÓÓà8 Ø àà 0 àÐ Ø À!Ø À! Ðà8 Ø àThe€service€charges€at€issue€in€the€Complaint€are€legal€pursuant€to€theÐ  æ ÐTennessee€Industrial€Loan€and€Thrift€Companies€Act.€€The€other€claimsÐ ø Ì Ðof€the€Complaint€„€those€not€based€on€the€Tennessee€Industrial€LoanÐ Þ ² Ðand€Thrift€Companies€Act,€T.C.A.€ðððð€45„5„101,€et€seq.€„€do€not€state€aÐ Ä ˜ Ðclaim€upon€which€relief€can€be€granted€because€the€Industrial€Loan€andÐ ª~ ÐThrift€Companies€Act€provides€the€Plaintiffs€their€exclusive€remedy.€Ð d ÐThe€claims€of€the€Plaintiffs€do€not€fall€within€the€Tennessee€ConsumerÐ vJ ÐProtection€Act.€€Finally,€taking€the€allegations€of€the€Complaint€as€true,Ð \0 Ðthe€claims€under€the€Tennessee€Consumer€Protection€Act,€the€TruthÐ B  Ðin€Lending€Act,€and€the€Real€Estate€Settlement€Procedures€Act€of€theÐ (ü  ÐPlaintiffs€Hathaway€and€Plaintiff€Fulson€relating€to€her€June€1996€loanÐ â  Ðare€time€barred.ÐôÈ Ø À!Ø À! ÐÌÌÓÓà Ø àAs€a€result€of€the€defendantððs€motion€to€dismiss,€the€district€judge€entered€anÐ ¦z  Ðorder€certifying€to€this€Court€the€two€questions€previously€stated,€and€signifying€thatÐ rF Ðthese€questions€are€dispositive€of€the€defendantððs€motion€to€dismiss.€€We€acceptedÐ > Ðcertification€of€the€questions,€and€for€the€reasons€hereafter€explained,€answer€bothÐ  Þ Ðin€the€affirmative.Ð Öª ÐÌà@]]-Ìàò òÔ‡XÄøX XX ™ÔII.Ô#†X ™ XXXÄø×5#Ôó óˆÐ n"B Ðà@ Ìàò òòòLEGAL€AUTHORITY€AND€ANALYSISó óˆÐ N$" Ðà@ƒƒ"ÌàA.€Historical€BackgroundˆÐ &&ú Ðà Ø àóóPrior€to€1978,€Article€11,€Section€7€of€the€Tennessee€Constitution€provided€asÐ ò'Æ! Ðfollows:€€Ð ¾)’# ÐÓÓà8 Ø àà 0 àThe€Legislature€shall€fix€the€rate€of€interest,€and€the€rate€soÐ Š+^!% Ðestablished€shall€be€equal€and€uniform€throughout€the€State;€but€theÐ p,D"& ÐLegislature€may€provide€for€a€conventional€rate€of€interest,€not€toÐ V-*#' Ðexceed€10€percent€per€annum.Ð<.$(Ø À!Ø À! ÐÌÌÓÓà Ø àThis€ten€percent€ceiling€on€conventional€interest€rates€ð ðrestricted€the€availabilityÐ î0Â&+ Ðof€credit€during€periods€of€inflation.ðð€€òòPacific€E.€Corp.€v.€Gulf€Life€Holding€Co.óó,€902Ð º2Ž(- ÐS.W.2d€946,€953€(Tenn.€App.€1995)€(perm.€app.€denied€July€10,€1995).€€To€addressÐ †4Z*/ Ðthis€problem,€the€General€Assembly€in€March€of€1976€called€a€limited€constitutionalÐ ,  Ðconvention€aimed€at€modifying€the€constitutional€restriction€on€interest€rates.€€òòId.óó€atÐ ø Ì Ð953.Ð Ä ˜ ÐÌà Ø àHowever,€before€any€action€had€been€taken€by€the€constitutional€convention,Ð \0 Ðthis€Court,€in€òòCumberland€Capital€Corp.€v.€Pattyóó,€556€S.W.2d€516€(Tenn.€1977),Ð (ü  Ðapplied€the€above„quoted€version€of€Article€11,€Section€7,€and€held€unconstitutionalÐ ôÈ  Ða€statutory€provision€expressly€authorizing€industrial€loan€and€thrift€companies€toÐ À”  Ðdeduct€from€the€face€amount€of€loans€seven€and€one„half€percent€annual€interest€forÐ Œ` Ðthe€full€term€of€the€loans,€if€the€end€result€was€an€effective€rate€of€interest€in€excessÐ X, Ðof€the€constitutional€limit€of€ten€percent.Ð $ø ÐÌà Ø àThis€Courtððs€opinion€in€òòCumberland€Capital€Corp.óó€included€the€followingÐ ¼ Ðdiscussion€of€loan€service€charges:Ð ˆ!\ ÐÓÓà8 Ø àà 0 à1.€€The€Legislature€may€not€authorize€a€lender€to€arbitrarily€fix€aÐ T#( Ðmonthly€expense€fee,€.€.€.€nor€to€charge€all€borrowers€the€maximum€fee,Ð :$ Ðin€addition€to€interest€.€.€.Ð %ôØ À!Ø À! ÐÌà8 Ø àà 0 à2.€€The€lender€and€the€borrower€are€free€to€agree€upon€aÐ ì&À  Ðreasonable€service€charge€within€the€statutory€limit,€.€.€.€but€thisÐ Ò'¦! Ðððfreedom€of€contractðð€is€limited€by€Article€11,€Section€7€relating€toÐ ¸(Œ" Ðconventional€interest,€.€.€.€and€is€further€limited€and€governed€by€otherÐ ž)r# Ðprinciples€set€forth€in€this€sequence.Є*X $Ø À!Ø À! ÐÌà8 Ø àà 0 à3.€€Service€charges€must€bear€a€reasonable€relation€to€theÐ P,$"& Ðexpense€and€service€of€the€lender€.€.€.€.Ð6- #'Ø À!Ø À! Ðà@+Ìà.€.€.€.ˆÐ .ð#( ÐÌà8 Ø àà 0 à5.€€The€service€charge€amounts€to€usury€if€exacted€as€additionalÐ è/¼%* Ðcompensation€for€the€use€of€money€in€attempted€evasion€of€theÐ Î0¢&+ Ðstatutes€against€usury.€.€.€.д1ˆ',Ø À!Ø À! ÐÌà8 Ø àà 0 à6.€€The€service€charge€may€not€include€overhead€expenses€suchÐ €3T). Ðâ âas€rents,€salaries,€and€loan€losses,€.€.€.€but€this€does€not€precludeÐ f4:*/ Ðcharging€for€services€directly€related€to€the€loan€rendered€by€salariedÐ ,  Ðemployees.€€It€only€excludes€indirect€or€extraneous€expense.€.€.€.Ð æØ À!Ø À! Ðâ âÌà@+Ìà.€.€.€.ˆÐ Þ ² ÐÌà8 Ø àà 0 àWe€hold€that€any€service€charge€in€excess€of€the€fair€andÐ ª~ Ðreasonable€worth€of€expense€and€service€attributable€directly€to€a€loanÐ d Ðmust€be€treated€as€additional€compensation€to€the€lender€andÐ vJ Ðconstitutes€interest.€€Any€such€excess€must€be€added€to€the€stated,€orÐ \0 Ðresulting,€amount€of€interest€in€order€to€determine€the€validity€of€theÐ B  Ðcharge.€€The€excess,€of€course,€is€conventional€interest.Ð(ü Ø À!Ø À! ÐÌà8 Ø àà 0 àInstallment€maintenance€fees,€as€set€forth€in€Sec.€45„2007(h)Ð ôÈ  Ðare€to€be€governed€by€the€same€rules.ÐÚ® Ø À!Ø À! ÐÌà8 Ø àà 0 àWe€do€not€hold€Sections€45„2007(i)€or€(p)€to€be€unconstitutional.€Ð ¦z  ÐWe€do€hold,€that,€in€order€to€sustain€the€constitutionality€of€theseÐ Œ` Ðsubsections,€they€must€be€construed€and€interpreted€as€hereinaboveÐ rF Ðset€forth,€and€not€as€òòestablished,€uniform,€fixed,€rigid€or€arbitraryÐ X, Ðchargesóó,€.€.€.ððÐ>Ø À!Ø À! ÐÌòòÌId.óó€at€535€Ô‡X ™ X XX ™Ô(emphasis€added)€(citations€omitted)Ô#†X ™ X XX ™¼I#Ô.òòÐ ðÄ ÐÌÌÓÓà Ø àóóOn€December€1,€1977,€shortly€after€this€Court€rendered€its€decision€inÐ ¢ v ÐòòCumberland€Capital€Corpóó.,€the€constitutional€convention€that€had€been€called€inÐ n"B ÐMarch€of€1976€adopted€a€proposed€amendment€to€rewrite€Article€11,€Section€7.€€ThisÐ :$ Ðamendment€was€approved€by€the€electorate€on€March€7,€1978,€and€the€governorÐ &Ú Ðproclaimed€it€adopted€on€March€31,€1978.€€òòPacific€E.€Corp.óó,€902€S.W.2d€at€953.€Ð Ò'¦! ÐTherefore,€Article€11,€Section€7,€as€amended€in€1978,€is€currently€in€effect€andÐ ž)r# Ðprovides€as€follows:Ð j+>!% ÐÓÓà8 Ø àà 0 àòòSec.€7.€Interestóó.€€„€The€General€Assembly€shall€define€andÐ 6- #' Ðregulate€interest,€and€set€maximum€effective€rates€thereof.Ð.ð#(Ø À!Ø À! ÐÌà8 Ø àà 0 àIf€no€applicable€statute€is€hereafter€enacted,€the€effective€rate€ofÐ è/¼%* Ðinterest€collected€shall€not€exceed€ten€percent€(10%)€per€annum.ÐÎ0¢&+Ø À!Ø À! ÐÌà8 Ø àà 0 àAll€provisions€of€existing€statutes€regulating€rates€of€interest€andÐ š2n(- Ðother€charges€on€loans€shall€remain€in€full€force€and€effect€until€July€1,Ð €3T). Ð1980,€unless€earlier€amended€or€repealed.òòÐf4:*/Ø À!Ø À! ÐÐ L5 +0 ЇÓÓóóà Ø àAs€a€result€of€this€1978€constitutional€amendment,€ð ð[t]he€Ninety„First€GeneralÐ ,  ÐAssembly€convened€in€1979€faced€with€the€prospect€of€the€imminent€expiration€of€allÐ ø Ì Ðexisting€statutes€governing€interest€rates.€€Accordingly,€it€enacted€several€pieces€ofÐ Ä ˜ Ðlegislation€completely€reforming€the€statutes€on€interest€and€usury.ðð€€òòPacific€E.€Corp.óó,Ð d Ð902€S.W.2d€at€953„54€(footnote€12,€describing€the€various€laws€enacted€in€1979€onÐ \0 Ðthe€subject€of€interest€and€usury,€omitted).€Ð (ü  ÐÌà@é é ÌàòòÔ‡X ™ X XX ™ÔB.€First€Certified€Question:€Calculation€of€Service€ChargeóóÔ#†X ™ X XX ™bR#ԈРÀ”  Ðà Ø àIncluded€in€the€package€of€reform€legislation€enacted€in€1979€was€theÐ Œ` ÐÔ‡X ™ X XX ™ÔIndustrial€Loan€and€Thrift€Companies€Ô#†X ™ X XX ™]S#ÔÔ‡X ™ X XX ™ÔAct,€Ô#†X ™ X XX ™ÄS#ÔÔ€Xëz X XX ™Ô(ð ðLoan€and€Thrift€Actðð),Ô€X ™ X XXëzÔ€Ô‡X ™ X XX ™ÔwhichÔ#†X ™ X XX ™hT#Ô€governs€theÐ X, Ðconduct€of€industrial€loan€and€thrift€companies,€such€as€the€defendant€in€this€matter.€Ð < ÐòòSeeóó€Tenn.€Code€Ann.€ðððð€€45„5„101,€òòetóó€òòseq.óó€€The€purpose€of€this€legislation€wasÐ Ü Ðdescribed€as€follows:Ð Ô¨ ÐÓÓà8 Ø àà 0 àAn€Act€to€revise€and€restate€the€Industrial€Loan€and€ThriftÐ  !t ÐCompanies€Act;€to€regulate€Industrial€Loan€and€Thrift€Companies;€toÐ †"Z Ðdefine€terms€used€herein;€to€set€maximum€effective€rates€of€interest;€toÐ l#@ Ðauthorize€and€limit€the€charges€made€by€such€persons;€to€regulate€theÐ R$& Ðpowers€and€practices€of€such€persons;€to€authorize€supervision€andÐ 8%  Ðregulation€of€such€persons€by€the€Commissioner€of€Insurance€and€toÐ &ò Ðprovide€for€the€powers€of€the€Commissioner€of€Insurance;€òòto€establishÐ 'Ø  Ðprocedures,€remedies€and€penaltiesóó,€civil€and€criminal;€to€declare€theÐ ê'¾! Ðpurposes€of€the€Act€and€to€provide€for€its€construction;€òòand€to€repealóóÐ Ð(¤" ÐChapter€20€of€Title€45,€Tenn.€Code€Ann.€and€òòall€laws€in€conflictÐ ¶)Š# Ðherewithóó.М*p $Ø À!Ø À! ÐÌÌ1979€Tenn.€Pub.€Acts€204€(emphasis€added).€€Ð N-"#' ÐÌÌÓÓà Ø àThe€scope€of€the€Loan€and€Thrift€Act€is€described€in€Tenn.€Code€Ann.€ðð€45„5„Ð 0Ô%* Ð104€(1993€Repl.)€as€follows:Ð Ì1 ', ÐÓÓà8 Ø àà 0 àThis€chapter€applies€only€to€persons€engaged€in€business€as€Ð ˜3l). Ðindustrial€loan€and€thrift€companies€or€industrial€banks€or€industrialÐ ~4R*/ Ðinvestment€companies.€€Neither€the€requirement€of€registration€nor€anyÐ d58+0 Ðother€provision€of€this€chapter€shall€apply€to€any€state€or€national€bankÐ ,  Ð(other€than€industrial€banks),€any€state€or€federal€savings€and€loanÐ  æ Ðassociation,€any€state€or€federal€credit€union,€any€insurance€company,Ð ø Ì Ðor€any€other€person€engaged€in€the€business€of€making€loans€whoseÐ Þ ² Ðactivities€in€so€doing€are€subject€to€supervision€and€regulation€by€aÐ Ä ˜ Ðstate€or€federal€administrative€agency;€nor€shall€the€requirement€ofÐ ª~ Ðregistration€or€any€other€provision€of€this€chapter€apply€to€licensedÐ d Ðpawnbrokers€or€to€any€other€person€engaged€in€the€sale€of€goods€orÐ vJ Ðservices€as€such.Ð\0Ø À!Ø À! ÐÌÌÓÓà Ø àIndustrial€loan€and€thrift€companies,€such€as€the€defendant€in€this€case,€whichÐ â  Ðhave€registered€under€the€Loan€and€Thrift€Act€are€designated€ð ðregistrantsðð€by€Tenn.Ð Ú®  ÐCode€Ann.€ðð€45„5„102(14)€(Supp.€1998).€€The€maximum€interest€rates€that€registrantsÐ ¦z  Ðcan€charge€for€loans€is€set€forth€in€Tenn.€Code€Ann.€ðð€45„5„401€(1993€Repl.).€€TheÐ rF Ðmaximum€rates€under€the€Loan€and€Thrift€Act€are€more€than€twice€the€earlierÐ > Ðconstitutional€limit€of€ten€percent.€€The€Loan€and€Thrift€Act€also€enabled€registrantsÐ  Þ Ðto€charge€uniform€fixed€loan€services€charges,€which€had€been€previously€prohibitedÐ Öª Ðby€the€pre„1978€version€of€Article€11,€Section€7€and€this€Courtððs€decision€inÐ ¢ v ÐòòCumberland€Capital€Corp.óó.€€The€first€certified€question€in€this€appeal€involves€theÐ n"B Ðstatutory€provision€that€permits€the€imposition€of€fixed€loan€service€charges,€Ô‡X ™ X XX ™ÔTenn.Ð :$ ÐCode€Ann.€ðð€45„5„403(1)(A)€(Supp.€1998)Ô#†X ™ X XX ™øb#Ô,€which€provides€as€follows:Ð &Ú ÐÓÓà8 Ø àà 0 àò òLimitations€on€loan€charges.ó 󀀄€No€registrant€under€thisÐ Ò'¦! Ðchapter€has€the€power€to€charge€loan€charges€other€than,€or€inÐ ¾(’" Ðamounts€greater€than,€the€following:Ф)x#Ø À!Ø À! ÐÌà8 Ø àà80 Ø À!Ø À!àà ˆ à(1)(A)€Registrants€may€charge€a€service€charge€inÐ p+D!% Ðan€amount€equal€to€four€percent€(4%)€of€òòthe€total€amountÐ V,*"& Ðof€the€loanóó,€which€charge€may€be€deducted€in€advanceÐ <-#' Ðfrom€the€principal€of€the€loan.€€This€service€charge€shallÐ ".ö#( Ðbe€in€lieu€of€all€other€compensation€for€services,Ð /Ü$) Ðexpenses,€detriments€or€commitments€directly€incident€toÐ î/Â%* Ðthe€loan,€except€those€charges€which€are€otherwiseÐ Ô0¨&+ Ðspecifically€provided€in€this€chapter.€€This€charge€isÐ º1Ž', Ðauthorized€and€limited€on€the€basis€that€it€is€generallyÐ  2t(- Ðreasonably€related€to€the€total€costs€and€expenses€whichÐ †3Z). Ðit€is€designed€to€cover,€and€in€order€to€make€the€amountÐ l4@*/ Ðof€such€charges€more€certain€and€readily€ascertainableÐ R5&+0 Ðby€such€registrants,€their€borrowers€and€theÐ ,  Ðcommissioner;€and€to€that€end,€registrants€shall€not€beÐ  æ Ðrequired€to€maintain€detailed€records€with€respect€to€theÐ ø Ì Ðservices,€expenses,€detriments€or€commitments€coveredÐ Þ ² Ðthereby.€€This€charge€shall€not,€however,€be€imposed€onÐ Ä ˜ Ðòòthat€portion€of€a€loan€used€to€pay€any€existing€loan€or€partÐ ª~ Ðthereof€owing€by€the€same€borroweróó€or€spouse,€or€both,Ð d Ðòòto€the€same€registrantóó€or€any€affiliated€lender.ððÐvJ0 h0 h ÐÌÌ(Emphasis€added).òòÐ (ü  ÐÓ¯cÓÌà Ø àóóThus,€under€this€statutory€provision,€the€amount€upon€which€the€four€percentÐ Ú®  Ðloan€service€charge€can€be€imposed€by€a€registrant€is€determined€by€subtracting€fromÐ ¦z  Ðthe€ð ðtotal€amount€of€the€loanðð€an€amount€that€consists€of€ð ðthat€portion€of€a€loan€usedÐ rF Ðto€pay€any€existing€loan€or€part€thereof€owing€by€the€same€borrower€.€.€.€to€the€sameÐ > Ðregistrant.ðð€€The€latter€phrase€is€not€defined€by€the€Loan€and€Thrift€Act.Ð  Þ ÐÌà Ø àThe€phrase€ð ðtotal€amount€of€the€loanðð€is€defined€at€Tenn.€Code€Ann.€ðð€45„5„Ð ¢ v Ð102(17)€(Supp.€1998)€as€ð ðthe€aggregate€amount€of€money€scheduled€to€be€paid€byÐ n"B Ða€borrower€to€a€registrant€to€repay€a€loan,€including€òòprincipalóó€and€any€òòinterestóóÐ :$ Ðprecomputed€and€deducted€in€advance.ðð€€(Emphasis€added).€€ð ðPrincipalðð€is€separatelyÐ &Ú Ðdefined€as€ð ðthe€total€of€money€paid€to,€received€by,€or€paid€or€accredited€to€theÐ Ò'¦! Ðaccount€of€the€borrower,€including€loan€charges€as€provided€in€ðð€45„5„403(1),€Ð ž)r# Ð(2)€and€(3),€as€applicable,€and€including€insurance€charges€for€which€the€borrowerÐ j+>!% Ðcontracts€to€pay€pursuant€to€ðð€45„5„305.ðð€€Tenn.€Code€Ann.€ðð€45„5„102(13)€(Supp.Ð 6- #' Ð1998).€€ð ðInterestðð€is€defined€asÐ /Ö$) Ðà8 Ø àÓÓcompensation€for€the€use,€detention€or€forbearance€to€collect€moneyÐ Î0¢&+ Ðover€a€period€of€time,€and€does€not€include€compensation€for€otherÐ ´1ˆ', Ðpurposes,€including,€but€not€limited€to:К2n(-Ø À!Ø À! ÐÌà8 Ø àà80 Ø À!Ø À!àà ˆ à(A)€Time„price€differentials;€Ðf4:*/0 h0 h Ðà8 Ø àà80 Ø À!Ø À!àà ˆ à(B)€Loan€charges€as€provided€in€ðð€45„5„403;€and€ÐL5 +00 h0 h Ðà8 Ø àà80 Ø À!Ø À!àà ˆ à(C)€Insurance€charges€as€provided€in€ðð€45„5„305.Ð, 0 h0 h ÐÌTenn.€Code€Ann.€ðð€45„5„102(9)(Supp.€1998).ÓÓÐ ø Ì ÐÌà Ø àThe€plaintiffs€in€this€case€do€not€dispute€that€the€defendant€accuratelyÐ d Ðdetermined€the€ð ðtotal€amount€of€the€loanðð€in€calculating€the€loan€service€charges.€Ð \0 ÐRather,€the€dispute€between€the€parties€centers€around€the€determination€of€theÐ (ü  Ðamount€that€is€to€be€subtracted€from€the€ð ðtotal€amount€of€the€loanðð€which€is€ð ðthatÐ ôÈ  Ðportion€of€a€loan€used€to€pay€any€existing€loan€or€part€thereof€owing€by€the€sameÐ À”  Ðborrower€.€.€.€to€the€same€registrant.ðð€€As€stated€above,€the€latter€provision€is€not€aÐ Œ` Ðdefined€term.Ð X, ÐÌà Ø àAccording€to€the€defendant,€this€phrase€means€that€portion€of€the€refinancingÐ ðÄ Ðloan€used€to€pay€the€amount€of€the€original€loan€that€is€outstanding€as€of€the€date€ofÐ ¼ Ðthe€refinancing,€which€latter€amount€does€not€include€interest€on€the€original€loan€thatÐ ˆ!\ Ðhas€not€and€will€not€accrue€as€a€result€of€the€refinancing€transaction.€€The€plaintiffs,Ð T#( Ðon€the€other€hand,€interpret€the€phrase€to€mean€the€ð ðtotal€amount€of€the€loan,ðð€asÐ  %ô Ðdefined€in€Tenn.€Code€Ann.€ðð€45„5„102(17),€with€respect€to€the€original€loan,Ð ì&À  Ðdetermined€as€of€the€date€of€the€refinancing.€€Under€the€plaintiffsðð€interpretation,€thisÐ ¸(Œ" Ðamount€should€include€the€interest€on€the€original€loan€that€would€have€accrued€afterÐ „*X $ Ðthe€date€of€refinancing,€even€though€the€interest€never,€in€fact,€accrues€because€theÐ P,$"& Ðoriginal€loan€is€retired€by€the€refinancing€loan.€Ð .ð#( ÐÌà Ø àThe€problem€with€the€plaintiffsðð€interpretation€is€that€no€portion€of€theÐ ´1ˆ', Ðrefinancing€loan€is€used€to€pay€such€nonexistent€interest.€€No€portion€of€theÐ €3T). Ðrefinancing€loan€is€used€to€pay€interest€on€the€original€loan€that,€because€of€theÐ L5 +0 Ðrefinancing,€never€in€fact€accrues.€€Thus,€we€agree€with€the€defendant€that€noÐ ,  Ðsubtraction€is€allowed€under€Tenn.€Code€Ann€ðð€45„5„403(1)(A)€(Supp.€1998),€for€suchÐ ø Ì Ðnonexistent€interest.€€Ô‡X ™ X XX ™Ô€Moreover,€the€General€Assembly,€having€used€the€definedÐ Ä ˜ Ðphrase€(the€ð ðtotal€amount€of€the€loanðð)€to€establish€the€first€variable,€could€have€usedÐ d Ðthe€same€defined€term€to€establish€the€second€variable€had€it€intended€for€the€phrase,Ð \0 Ðð ðthat€portion€of€a€loan€used€to€pay€any€existing€loan€or€part€thereof€owing€by€the€sameÐ (ü  Ðborrower€.€.€.€to€the€same€registrantððÔ#†X ™ X XX ™ê|#ÔÔ‡X ™ X XX ™Ô€to€mean€the€same€thing.€€The€fact€that€theÐ ôÈ  ÐGeneral€Assembly€did€not€use€the€same€defined€term€demonstrates€that€it€did€notÐ À”  Ðintend€for€that€definition€to€apply€to€establish€the€second€variable.€€òòState€v.€Lewisóó,€958Ð Œ` ÐS.W.2d€736,€739€(Tenn.€1997).€€Ô#†X ™ X XX ™ï~#ÔÐ X, ÐÌà Ø àWe€do€not€regard€the€disputed€portion€of€Tenn.€Code€Ann.€ðð€45„5„403(1)(A)Ð ðÄ Ð(Supp.€1998)€as€ambiguous,€at€least€not€ambiguous€in€a€manner€that€would€justify€theÐ ¼ Ðplaintiffsðð€proposed€interpretation.€€Thus,€we€are€not€persuaded€by€the€plaintiffsððÐ ˆ!\ Ðreliance€on€certain€portions€of€the€legislative€history€of€the€Loan€and€Thrift€Act.€€AsÐ T#( Ðwe€recently€stated€in€òòStorey€v.€Bradford€Furniture€Co.,€Inc.óó,€910€S.W.2d€857,€859Ð  %ô Ð(Tenn.€1995):€Ð ì&À  ÐÓÓà8 Ø àà 0 à[i]n€interpreting€legislative€provisions,€our€role€is€ððto€ascertain€andÐ ¸(Œ" Ðgive€effect€to€the€legislative€intent€without€unduly€restricting€orÐ ž)r# Ðexpanding€a€statuteððs€coverage€beyond€its€intended€scope.ðð€.€.€.€€If€theÐ „*X $ Ðintent€can€be€determined€from€the€plain€language€of€the€provision€readÐ j+>!% Ðin€the€context€of€the€entire€statutory€scheme,€we€must€conclude€ourÐ P,$"& Ðinquiry€there.€.€.€.€€If€the€language€is€ambiguous€and€does€not€yield€aÐ 6- #' Ðclear€interpretation,€we€may€consult€the€legislative€history€for€additionalÐ .ð#( Ðinterpretive€guidance.Ð/Ö$)Ø À!Ø À! ÐÌ€€(Citations€omitted).Ð Î0¢&+ ÐÌÌÓÓà Ø àWe€note,€however,€that€even€if€we€were€to€regard€the€disputed€portion€of€theÐ €3T). Ðstatute€as€ambiguous,€we€would€find€more€persuasive€than€the€legislative€history€theÐ L5 +0 Ðfact€that€the€Tennessee€Department€of€Financial€Institutions,׃$×Ý ƒ Ê^ÝÔ€X  X XX ™ÔòòÚ  Ú2Ú  ÚóóÝ  Ý×  ×Ô€&X ™ X XX Ô€which€has€beenÐ ,  Ðresponsible€for€enforcing€the€Loan€and€Thrift€Act,€has€consistently€applied€theÐ ø Ì Ðdefendantððs€interpretation€of€the€statute.€€òòSeeóó€òòe.g.óó,€òòCovington€Pike€Toyota,€Inc.€v.Ð Ä ˜ ÐCardwellóó,€829€S.W.2d€132€(Tenn.€1992).Ð d ÐÌà Ø àTherefore,€with€respect€to€the€first€certified€question,€we€hold€that€inÐ (ü  Ðdetermining€the€maximum€service€charge€that€lawfully€can€be€imposed€under€Tenn.Ð ôÈ  ÐCode€Ann.€ðð€45„5„403(1)(A)€(Supp.€1998),€€the€amount€to€be€subtracted€from€theÐ À”  Ðð ðtotal€amount€of€the€loan,ðð€as€defined€in€Tenn.€Code€Ann.€ðð€45„5„102(17),€is€theÐ Œ` Ðamount€of€the€refinancing€loan€that€is€used€to€pay€all€or€any€portion€of€the€outstandingÐ X, Ðbalance€of€the€initial€loan€from€the€registrant€to€the€borrower.€€However,€interest€thatÐ $ø Ðhad€not€accrued€before€the€date€of€the€refinancing€and€retirement€of€the€initial€loanÐ ðÄ Ðshould€not€be€included€as€part€of€the€outstanding€balance€of€the€initial€loan€which€isÐ ¼ Ðsubtracted€from€the€ð ðtotal€amount€of€the€loan.ðð€€Ð ˆ!\ ÐÌòòà@I I ÌàC.€Second€Certified€Question:€Exclusive€RemedyóóˆÐ  %ô Ðà Ø àWith€respect€to€the€second€certified€question,€we€begin€our€analysis€with€Tenn.Ð ì&À  ÐCode€Ann.€ðð€45„5„404€(1993€Repl.),€which€is€a€part€of€the€Loan€and€Thrift€Act.€€ThisÐ ¸(Œ" Ðstatute€provides€as€follows:Ð „*X $ ÐÓÓÌà8 Ø àà 0 àò òRemedies€of€borrowers€„€Defenses€„€Limitations€of€actions.ó ó€Ð 6- #' Є€òòThe€remedies€of€borrowersóó,€the€limitations€on€actions€of€borrowers,Ð ".ö#( Ðthe€defenses€available€to€borrowers€and€to€registrants,€and€theÐ /Ü$) Ðprocedures€applicable€to€such€actions€òòwith€respect€to€interest€and€loanÐ î/Â%* Ðcharges€under€this€chapter€shall€be€those€as€prescribed€by€the€generalÐ Ô0¨&+ Ðstatute€pertaining€to€interest€and€other€charges€by€lenders€andÐ º1Ž', Ðcreditorsóó.Р2t(-Ø À!Ø À! ÐÓÓÌ(Emphasis€added).€€The€ð ðgeneral€statute€pertaining€to€interest€and€other€charges€byÐ ø Ì Ðlenders€or€creditorsðð€referred€to€above€is€Chapter€14€of€Title€47€of€Tennessee€CodeÐ Ä ˜ ÐAnnotated,€which€is€entitled€ð ðInterest€Rates€Generally.ðð€€Like€the€Loan€and€Thrift€Act,Ð d Ðthis€legislation€was€also€adopted€as€part€of€the€reform€package€in€1979.€€òòSeeóó€1979Ð \0 ÐTenn.€Pub.€Acts€203;€òòPacific€E.€Corp.óó,€902€S.W.2d€at€954€n.12.€€Therefore,€theÐ (ü  Ðstatutes€enacted€in€1979,€including€the€Loan€and€Thrift€Act€and€the€general€statuteÐ ôÈ  Ðrelating€to€interest,€created€new€rights€and€remedies€for€borrowers€with€respect€toÐ À”  Ðinterest€rates€above€ten€percent€annually€and€fixed€uniform€service€charges.Ð Œ` ÐÌà Ø àIn€determining€whether€these€statutes€provide€the€exclusive€remedies€forÐ $ø Ðborrowers,€we€are€guided€by€our€decision€in€òòHodges€v.€S.C.€Toof€&€Co.óó,€833€S.W.2dÐ ðÄ Ð896,€899€(Tenn.€1992),€in€which€we€stated:Ð ¼ ÐÓÓà8 Ø àà 0 à[i]f€a€statute€creates€a€new€right€and€prescribes€a€remedy€for€itsÐ ˆ!\ Ðenforcement,€then€the€prescribed€remedy€is€exclusive.€€òòTurner€v.Ð n"B ÐHarrisóó,€198€Tenn.€654,€664,€281€S.W.2d€661,€665€(1955);€òòNashville€&Ð T#( ÐC.R.R.€v.€Sprayberryóó,€56€Tenn.€852,€854€(1874).€€However,€where€aÐ :$ Ðcommon€law€right€exists,€and€a€statutory€remedy€is€subsequentlyÐ  %ô Ðcreated,€the€statutory€remedy€is€cumulative€unless€expressly€statedÐ &Ú Ðotherwise€.€.€.€Further,€the€Legislature€is€presumed€to€know€the€state€ofÐ ì&À  Ðthe€law€on€the€subject€under€consideration€at€the€time€it€enactsÐ Ò'¦! Ðlegislation.и(Œ"Ø À!Ø À! ÐÌ(Citations€omitted).Ð „*X $ ÐÓï”ÓÌà Ø àWe€determined€in€òòHodgesóó€that€the€1986€statute€creating€a€remedy€forÐ 6- #' Ðretaliatory€discharge€was€not€the€exclusive€remedy€because€the€right€to€a€retaliatoryÐ /Ö$) Ðdischarge€cause€of€action€had€been€previously€recognized€by€this€Court€in€1984.Ð Î0¢&+ Ðâ âÐ š2n(- Ðà Ø àApplying€the€rationale€of€òòHodgesóó€to€the€facts€in€this€case,€we€conclude€that€theÐ ,  Ðâ âremedies€prescribed€by€the€general€statute€pertaining€to€interest€and€other€chargesÐ ø Ì Ðby€lenders,€Tenn.€Code€Ann.€ðððð€47„14„101€òòetóó€òòseq.óó,€constitute€the€exclusive€remediesÐ Ä ˜ Ðfor€borrowers€with€respect€to€interest€and€loan€charges€under€the€€Loan€and€ThriftÐ d ÐAct.€€Our€conclusion€is€grounded€upon€the€fact€that€the€statutes€creating€both€theÐ \0 Ðright€and€the€remedies€were€enacted€in€1979€as€part€of€the€reform€package.€Ð (ü  ÐMoreover,€the€clear€language€of€the€statute€indicates€that€the€remedies€are€exclusive.€Ð ôÈ  ÐThe€statute€provides€that€ð ð[t]he€remedies€of€borrowers€.€.€.€with€respect€to€interest€andÐ À”  Ðloan€charges€under€this€chapter€òòshall€be€those€as€prescribed€by€the€general€statuteÐ Œ` Ðpertaining€to€interest€and€other€charges€by€lenders€or€creditors.óóðð€€Ô‡X ™ X X&X ™ÔTenn.€Code€Ann.Ð X, Ððð€€45„5„404€(1993€Repl.)Ô#†&X ™ X XX ™Ä#Ô.Ð $ø ÐÌà Ø àThe€plaintiffsðð€reliance€on€our€decision€in€òòMyint€v.€Allstate€Ins.€Co.óó,€970€S.W.2dÐ ¼ Ð920€(Tenn.€1998),€is€misplaced.€€In€òòMyintóó,€we€concluded€that€a€statute׃×Ý ƒ Ê^ÝÔ€X  X X&X ™ÔòòÚ  Ú3Ú  ÚóóÝ  Ý×  ×Ô€Xëz X XX Ô€which€allowedÐ ˆ!\ Ðimposition€of€a€twenty„five€percent€penalty€for€a€bad€faith€refusal€to€pay€a€loss€claimÐ l#@ Ðunder€an€insurance€contract€was€not€the€exclusive€remedy€for€such€a€violation€andÐ L%  Ðthat€the€remedies€of€the€Tennessee€Consumer€Protection€Act€also€could€be€appliedÐ ,'  Ðin€such€a€situation.€€òòMyintóó€is€distinguishable€from€the€circumstances€in€this€case.€€ForÐ  )à" Ðexample,€a€right€of€action€existed€at€common€law€for€breach€of€contract,€includingÐ ì*À $ Ðbreach€of€an€insurance€contract,€long€before€the€enactment€of€the€ð ðbadÐ Ì, "& Ðfaithðð€statute.€€In€contrast,€rights€and€remedies€with€respect€to€fixed€uniform€loanÐ ¬.€$( Ðâ âcharges€and€interest€rates€in€excess€of€ten€percent€were€created€by€the€GeneralÐ Œ0`&* ÐAssembly€in€the€same€year.€€In€addition,€òòMyintóó€was€based€partially€on€a€provision€ofÐ ,  Ðthe€Tennessee€Consumer€Protection€Act,€which€provides€in€pertinent€part€as€follows:Ð  à Ðâ âÓÓà8 Ø àà 0 àThe€powers€and€remedies€provided€in€this€part€shall€beÐ ì À Ðcumulative€and€supplementary€to€all€of€the€powers€otherwise€providedРܰ Ðby€law.€€The€invocation€of€one€power€or€remedy€herein€shall€not€beÐ Ì  Ðconstrued€as€excluding€or€prohibiting€the€use€of€any€other€availableÐ ¼ Ðremedy.€€Ð¬€Ø À!Ø À! ÐÌÓÓTenn.€Code€Ann.€ðð€47„18„112€(1995€Repl.).€€Though€we€stated€in€òòMyintóó€that,€ð ð[e]venÐ Œ`  Ðwhen€a€different€code€section€applies€and€is€invoked€to€obtain€relief,€the€ConsumerÐ l@  ÐProtection€Act€òòmayóó€also€apply,€assuming€the€act€or€practice€in€question€falls€withinÐ L  Ðthe€scope€of€its€application,ðð€òòMyintóó,€Ô‡X ™ X XXëzÔ970€S.W.2dÔ#†Xëz X XX ™4§#Ô€at€926,€we€did€not€intend€to€imply€thatÐ , Ðthe€remedies€of€the€Tennessee€Consumer€Protection€Act€apply€in€everyÐ ä Ðcircumstance.€Where,€as€here,€another€remedy€has€been€deemed€exclusive,€theÐ ðÄ Ðremedies€afforded€by€the€Tennessee€Consumer€Protection€Act€do€not€apply.€€Ð Ф ÐÌà Ø àAvailable€remedies€under€the€general€statute€pertaining€to€interest€includeÐ "d Ðmaking€usury€a€defense€to€an€action€to€collect€a€loan€and€recovering€usuriousÐ p$D Ðpayments€that€have€been€made.€€Tenn.€Code€Ann.€ðððð€47„14„110,€€„111€(1995€Repl.).€Ð P&$ ÐIn€addition,€it€is€possible€to€recover€loan€charges€that€are€in€excess€of€those€permittedÐ 0(  Ðby€the€Loan€and€Thrift€Act.€€Tenn.€Code€Ann.€ðð€47„14„114€(1995€Repl.).€€TheÐ *ä" Ðfollowing€statutory€provisions€afford€equitable€remedies€relating€to€the€imposition€ofÐ ð+Ä!$ Ðexcess€interest:Ð Ð-¤#& ÐÓÓà8 Ø àà 0 àNo€person€shall€be€entitled€to€an€equitable€remedy€with€respectÐ °/„%( Ðto€usury€or€excess€loan€charges€unless€the€person€seeking€suchÐ  0t&) Ðremedy€does€equity€by€paying,€or€tendering€into€court,€the€principal€plusÐ 1d'* Ðlawful€interest€and€loan€charges€then€due;€provided,€that€any€contractÐ €2T(+ Ðmay€be€reformed€by€suit€brought€in€equity€with€respect€to€any€regulatedÐ p3D), Ðâ âloan€charges,€brokerage€commissions,€or€commitment€fees€in€excessÐ `44*- Ðof€those€authorized€by€law€upon€cost€bond€or,€in€appropriate€cases,€onÐ ,  Ðpauperððs€oath.€€Ð ðØ À!Ø À! Ðâ âÌà8 Ø àà 0 àWhere€successful€in€the€reformation€of€the€instrument,€theÐ ü Ð Ðcomplaining€party€shall€be€rewarded€reasonable€attorneysðð€fees.Ðì ÀØ À!Ø À! ÐÌTenn.€Code€Ann.€ðð€47„14„115(b)€and€(c)€(1995€Repl.).Ð Ì  ÐÌÌÓÓà Ø àWhen€there€is€a€deliberate€violation€of€the€provisions€of€the€Loan€and€Thrift€ActÐ œp  Ðregarding€interest€and€loan€charges,€the€following€remedies€are€provided€by€theÐ |P  Ðstatute:Ð \0  ÐÓÓà8 Ø àà 0 àWhere,€however,€the€court€finds€that€the€lender€or€creditor€hasÐ < Ðbeen€guilty€of€unconscionable€conduct€in€a€transaction€by€takingÐ , Ðinterest,€loan€charges,€commitment€fees,€or€brokerage€commissions€inÐ ð Ðexcess€of€the€limitations€fixed€by€statute,€that€lender€or€creditor€shallÐ  à Ðnot€be€entitled€to€recover€any€interest,€loan€charges€or€commitmentÐ üÐ Ðfees€or€brokerage€commissions€with€respect€to€that€transaction€andÐ ìÀ Ðshall€be€required€to€refund€to€the€borrower€or€debtor€any€loan€charges,Рܰ Ðcommitment€fees,€or€brokerage€commissions,€and€twice€the€amount€ofÐ Ì  Ðany€interest€collected€with€respect€to€that€transaction,€and€the€borrowerÐ ¼ Ðshall€be€entitled€to€recover€reasonable€attorneysðð€fees€from€the€lender.Ь €Ø À!Ø À! ÐÌà8 Ø àà 0 àAs€used€in€this€subsection,€ððunconscionable€conductðð€includes,Ð Œ"` Ðbut€is€not€limited€to,€any€calculated€violation€of€statutory€limitations€onÐ |#P Ðinterest,€loan€charges,€commitment€fees€or€brokerage€commissionsÐ l$@ Ðwith€full€awareness€of€those€limitations.€Ð\%0Ø À!Ø À! ÐÌTenn.€Code€Ann.€ðð€47„14„117(c)€(1995€Repl.).Ð <' ÐÌÌÓÓà Ø àOur€holding€that€these€remedies€are€exclusive€with€respect€to€interest€and€loanÐ  *à" Ðcharges€under€the€Loan€and€Thrift€Act€does€not€mean€that€registrants€are€not,€underÐ ì+À!$ Ðany€circumstances,€subject€to€the€provisions€of€the€Tennessee€Consumer€ProtectionÐ Ì- #& ÐAct.€€We€decline€to€adopt€a€broad€exemption.€€Each€case€must€be€examined€on€itsÐ ¬/€%( Ðown€facts.€€òòSeeóó€òòPursell€v.€First€American€Natððl€Bankóó,€937€S.W.2d€838,€842€(Tenn.Ð Œ1`'* Ð1996)€(holding€that€a€bankððs€actions€with€regard€to€repossession€of€collateral€did€notÐ l3@), Ðfall€within€the€Tennessee€Consumer€Protection€Act,€but€declining€to€establish€aÐ L5 +. Ðgeneral€ð ðbankingðð€exemption€from€the€Tennessee€Consumer€Protection€Act);€òòseeóóÐ ,  Ðòòalsoóó,€òòTurner€v.€E„Z€Check€Cashingóó,€35€F.€Supp.€2d€1042€(M.D.€Tenn.€1999).Ð  à ÐÌà Ø àIn€conclusion,€with€respect€to€the€second€certified€question,€we€hold€that€theÐ Ì  Ðremedies€prescribed€by€Tenn.€Code€Ann.€ðððð€47„14„101,€òòetóó€òòseq.óó€are€the€exclusiveÐ ¬€ Ðremedies€of€borrowers€with€respect€to€a€violation€of€the€limitations€on€loan€chargesÐ Œ`  Ðand€interest€rates€that€are€imposed€by€the€Industrial€Loan€and€Thrift€Companies€Act.Ð l@  ÐÌà@%%,ÌàÔ‡X  X XXëzÔÔ‡¼2“» XX Ôò òIII.ó óÔ#†X  X»¼2“»#ÔÔ#†Xëz X XX q»#ԈР, Ðà@,,)Ìàòòò òCONCLUSIONóóó óˆÐ T( Ðà Ø àÔ‡ Xëz X XXëzÔFor€the€reasons€herein€explained,€we€answer€the€questions€certified€by€theÐ 4 ÐUnited€States€District€Court€for€the€Middle€District€of€Tennessee€in€the€affirmativeÔ#†Xëz X X Xëz_¼#ÔÔ‡ Xëz X XXëzÔ.€Ð è ÐThe€clerk€will€transmit€this€opinion€in€accordance€with€Rule€23,€Section€8€of€the€RulesÐ ô È Ðof€the€Supreme€Court.Ô#†Xëz X X XëzT½#Ô€€The€costs€in€this€Court€will€be€taxed€equally€between€theÐ Ô"¨ Ðplaintiffs„respondents€and€the€defendant„petitioner.€€Ð ´$ˆ ÐÌÓÓòòòòÌà Ø àà 0 àà ˆ àà à àà 8 àà Û à€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€óóÐ d)8! Ðóóà Ø àà 0 àà ˆ àà à àà 8 àà Û àFRANK€F.€DROWOTA,€III,Ð T*( " Ðà Ø àà 0 àà ˆ àà à àà 8 àà Û àJUSTICEòòÐ D+!# Ðóóò òÌÌConcur:Ð .è#& Ðó óAnderson,€C.J.,Ð /Ø$' ÐBirch,€Holder,€Barker,€JJ.