Thank you. I wouund up contacting someone who works with Tim, and for the benefit of anyone else who may want to know, here is the information which was provided:
"The only regulation/law governing this is under the Credit Card State Bank Act in Tenn. Code Ann. 45-2-1906, which specifically authorizes the use of a 360 day year for loans made under the Act, provided the provision is included in the loan contract. There are no other statutes that authorize the 360 day year.
The deposit account agreement is a separate contract and could be governed by different terms." [This answer was in reference to whether the calculation base for the loan needed to match the calculation base for the deposit account which secures the loan.]
"Below is the text from 45-2-1906 that would apply to the loan situation:
45-2-1906. Computation of interest.
(a) A bank may charge and collect the interest charges authorized by § 45-2-1904(a) on each credit extension under the credit card plan from the date the cardholder makes a purchase or obtains a cash advance through the date payment is credited to the account in accordance with applicable federal law.
(b) Subject to the terms of the written agreement between a bank and a cardholder, outstanding balances may be computed at the beginning or end of any period or on an average basis for the period. Outstanding balances may include any interest charges and other fees and charges posted to the account. Accordingly, a bank may compound interest charges on extension of credit under this part, on a daily or other basis.
(c) For purposes of determining the daily, weekly, monthly or quarterly rate of interest equivalent to an annual rate, the annual rate shall be divided by: three hundred sixty (360), if the written agreement so provides, or three hundred sixty-five (365), fifty-two (52), twelve (12), or four (4), as the case may be, without regard to the effect of leap years, periods of varying lengths, compounding of interest charges or other factors. A billing period shall be deemed to be a month or monthly if the last day of each billing period is on the same day of each month or does not vary by more than four (4) days from the same day.
(d) Payments received by a bank under a credit card account may be applied by the bank to purchases, cash advances and/or fees and charges imposed by the bank, in any order, and a bank shall not be required to set forth its payment allocation method in the account agreement or give notice of a change in its payment allocation method, except as required by federal law."
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