# Tenn. Code Ann. § 45-20-108: Compliance failure > Tennessee · Statutes · In force URL: https://www.frixlaw.com/law-library/statutes/STATE_TN_T45_C20_S45-20-108 ## Section - **Citation:** Tenn. Code Ann. § 45-20-108 - **Heading:** Compliance failure - **Jurisdiction:** Tennessee - **Kind:** Statutes - **Status:** In force - **Text as of:** August 14, 2026 - **Source:** Compiled text - **Location:** TN Code / Title 45 / Chapter 20 / Section 45-20-108 ## Text (a) A lender or servicer, as applicable, of a high-cost home loan who, when acting in good faith, fails to comply with § 45-20-103 , § 45-20-104 , or § 45-20-106 shall not be deemed to have violated the section, if the lender or servicer establishes that either: (1) Within thirty (30) days of discovery and prior to the institution of any action under this chapter: (A) The borrower is notified of the compliance failure; (B) The lender or servicer has made appropriate restitution to the borrower; (C) With respect to the violations identified in § 45-20-107(a)(1) , the lender or servicer makes whatever adjustments are necessary to the loan to either, at the choice of the borrower, make the loan satisfy the requirements of § 45-20-103 , or change the terms of the loan in a manner beneficial to the borrower, so that the loan will no longer be considered a high-cost home loan subject to this chapter; and (D) With respect to the violations identified in § 45-20-107(a)(2) , the lender or servicer makes whatever adjustments or refunds and/or takes action necessary to cure the violation, by affording the borrower the rights and benefits provided under this chapter; (2) The compliance failure was not intentional and resulted from a bona fide error, notwithstanding the maintenance of procedures reasonably adapted to avoid the errors, and within sixty (60) days after the discovery of the compliance failure and prior to the institution of any action under this chapter or the receipt of written notice of the compliance failure: (A) The borrower is notified of the compliance error; (B) The lender makes appropriate restitution to the borrower; (C) With respect to the violations identified in § 45-20-107(a)(1) , the lender or servicer makes whatever adjustments are necessary to the loan to either, at the choice of the borrower, make the loan satisfy the requirements of § 45-20-103 , or change the terms of the loan in a manner beneficial to the borrower, so that the loan will no longer be considered a high-cost home loan subject to this chapter; and (D) With respect to the violations identified in § 45-20-107(a)(2) , the lender or servicer makes whatever adjustments or refunds and/or takes action necessary to cure the violation, by affording the borrower the rights and benefits provided under this chapter. (b) Examples of a bona fide error include, but are not limited to, clerical, calculation, computer malfunction and programming, and printing errors. (c) For purposes of this section, "appropriate restitution" means the reimbursement by the lender of any points and fees, interest, or other charges made by the lender and received from the borrower necessary to put the borrower in the same position as the borrower would have been had the loan, as adjusted, in accordance with subdivisions (a)(1) and (2), been originally made. Acts 2006, ch. 801, § 8. For purposes of this section, "appropriate restitution" means the reimbursement by the lender of any points and fees, interest, or other charges made by the lender and received from the borrower necessary to put the borrower in the same position as the borrower would have been had the loan, as adjusted, in accordance with subdivisions (a)(1) and (2), been originally made. Acts 2006, ch. 801, § 8. (a) A lender or servicer, as applicable, of a high-cost home loan who, when acting in good faith, fails to comply with § 45-20-103 , § 45-20-104 , or § 45-20-106 shall not be deemed to have violated the section, if the lender or servicer establishes that either: (1) Within thirty (30) days of discovery and prior to the institution of any action under this chapter: (A) The borrower is notified of the compliance failure; (B) The lender or servicer has made appropriate restitution to the borrower; (C) With respect to the violations identified in § 45-20-107(a)(1) , the lender or servicer makes whatever adjustments are necessary to the loan to either, at the choice of the borrower, make the loan satisfy the requirements of § 45-20-103 , or change the terms of the loan in a manner beneficial to the borrower, so that the loan will no longer be considered a high-cost home loan subject to this chapter; and (D) With respect to the violations identified in § 45-20-107(a)(2) , the lender or servicer makes whatever adjustments or refunds and/or takes action necessary to cure the violation, by affording the borrower the rights and benefits provided under this chapter; (2) The compliance failure was not intentional and resulted from a bona fide error, notwithstanding the maintenance of procedures reasonably adapted to avoid the errors, and within sixty (60) days after the discovery of the compliance failure and prior to the institution of any action under this chapter or the receipt of written notice of the compliance failure: (A) The borrower is notified of the compliance error; (B) The lender makes appropriate restitution to the borrower; (C) With respect to the violations identified in § 45-20-107(a)(1) , the lender or servicer makes whatever adjustments are necessary to the loan to either, at the choice of the borrower, make the loan satisfy the requirements of § 45-20-103 , or change the terms of the loan in a manner beneficial to the borrower, so that the loan will no longer be considered a high-cost home loan subject to this chapter; and (D) With respect to the violations identified in § 45-20-107(a)(2) , the lender or servicer makes whatever adjustments or refunds and/or takes action necessary to cure the violation, by affording the borrower the rights and benefits provided under this chapter. (1) Within thirty (30) days of discovery and prior to the institution of any action under this chapter: (A) The borrower is notified of the compliance failure; (B) The lender or servicer has made appropriate restitution to the borrower; (C) With respect to the violations identified in § 45-20-107(a)(1) , the lender or servicer makes whatever adjustments are necessary to the loan to either, at the choice of the borrower, make the loan satisfy the requirements of § 45-20-103 , or change the terms of the loan in a manner beneficial to the borrower, so that the loan will no longer be considered a high-cost home loan subject to this chapter; and (D) With respect to the violations identified in § 45-20-107(a)(2) , the lender or servicer makes whatever adjustments or refunds and/or takes action necessary to cure the violation, by affording the borrower the rights and benefits provided under this chapter; (A) The borrower is notified of the compliance failure; (B) The lender or servicer has made appropriate restitution to the borrower; (C) With respect to the violations identified in § 45-20-107(a)(1) , the lender or servicer makes whatever adjustments are necessary to the loan to either, at the choice of the borrower, make the loan satisfy the requirements nd benefits provided under this chapter; (A) The borrower is notified of the compliance failure; (B) The lender or servicer has made appropriate restitution to the borrower; (C) With respect to the violations identified in § 45-20-107(a)(1) , the lender or servicer makes whatever adjustments are necessary to the loan to either, at the choice of the borrower, make the loan satisfy the requirements of § 45-20-103 , or change the terms of the loan in a manner beneficial to the borrower, so that the loan will no longer be considered a high-cost home loan subject to this chapter; and (D) With respect to the violations identified in § 45-20-107(a)(2) , the lender or servicer makes whatever adjustments or refunds and/or takes action necessary to cure the violation, by affording the borrower the rights and benefits provided under this chapter; (2) The compliance failure was not intentional and resulted from a bona fide error, notwithstanding the maintenance of procedures reasonably adapted to avoid the errors, and within sixty (60) days after the discovery of the compliance failure and prior to the institution of any action under this chapter or the receipt of written notice of the compliance failure: (A) The borrower is notified of the compliance error; (B) The lender makes appropriate restitution to the borrower; (C) With respect to the violations identified in § 45-20-107(a)(1) , the lender or servicer makes whatever adjustments are necessary to the loan to either, at the choice of the borrower, make the loan satisfy the requirements of § 45-20-103 , or change the terms of the loan in a manner beneficial to the borrower, so that the loan will no longer be considered a high-cost home loan subject to this chapter; and (D) With respect to the violations identified in § 45-20-107(a)(2) , the lender or servicer makes whatever adjustments or refunds and/or takes action necessary to cure the violation, by affording the borrower the rights and benefits provided under this chapter. (A) The borrower is notified of the compliance error; (B) The lender makes appropriate restitution to the borrower; (C) With respect to the violations identified in § 45-20-107(a)(1) , the lender or servicer makes whatever adjustments are necessary to the loan to either, at the choice of the borrower, make the loan satisfy the requirements of § 45-20-103 , or change the terms of the loan in a manner beneficial to the borrower, so that the loan will no longer be considered a high-cost home loan subject to this chapter; and (D) With respect to the violations identified in § 45-20-107(a)(2) , the lender or servicer makes whatever adjustments or refunds and/or takes action necessary to cure the violation, by affording the borrower the rights and benefits provided under this chapter. (b) Examples of a bona fide error include, but are not limited to, clerical, calculation, computer malfunction and programming, and printing errors. (c) For purposes of this section, "appropriate restitution" means the reimbursement by the lender of any points and fees, interest, or other charges made by the lender and received from the borrower necessary to put the borrower in the same position as the borrower would have been had the loan, as adjusted, in accordance with subdivisions (a)(1) and (2), been originally made. Acts 2006, ch. 801, § 8. ## Nearby sections - [Tenn. Code Ann. § 45-20-101 Short title](https://www.frixlaw.com/law-library/statutes/STATE_TN_T45_C20_S45-20-101.md) - [Tenn. Code Ann. § 45-20-102 Chapter definitions](https://www.frixlaw.com/law-library/statutes/STATE_TN_T45_C20_S45-20-102.md) - [Tenn. Code Ann. § 45-20-103 Prohibited acts and practices](https://www.frixlaw.com/law-library/statutes/STATE_TN_T45_C20_S45-20-103.md) - [Tenn. Code Ann. § 45-20-104 Cure of default - Foreclosure](https://www.frixlaw.com/law-library/statutes/STATE_TN_T45_C20_S45-20-104.md) - [Tenn. Code Ann. § 45-20-105 Purchaser or assignee of loan subject to all claims and defenses of the borrower - Relief granted - Due diligence](https://www.frixlaw.com/law-library/statutes/STATE_TN_T45_C20_S45-20-105.md) - [Tenn. Code Ann. § 45-20-106 Actions prohibited to avoid application or provisions of chapter - Open-end credit plan](https://www.frixlaw.com/law-library/statutes/STATE_TN_T45_C20_S45-20-106.md) - [Tenn. Code Ann. § 45-20-107 Penalties - Punitive damages - Remedies - Limitations - Frivolous or harassment actions - Notice of action](https://www.frixlaw.com/law-library/statutes/STATE_TN_T45_C20_S45-20-107.md) - [Tenn. Code Ann. § 45-20-108 Compliance failure](https://www.frixlaw.com/law-library/statutes/STATE_TN_T45_C20_S45-20-108.md) - [Tenn. Code Ann. § 45-20-109 Commissioner's powers - Rules and regulations - Examinations and investigations - Injunctions](https://www.frixlaw.com/law-library/statutes/STATE_TN_T45_C20_S45-20-109.md) - [Tenn. Code Ann. § 45-20-110 Restrictions on local regulation](https://www.frixlaw.com/law-library/statutes/STATE_TN_T45_C20_S45-20-110.md) - [Tenn. Code Ann. § 45-20-111 Application](https://www.frixlaw.com/law-library/statutes/STATE_TN_T45_C20_S45-20-111.md) --- Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/STATE_TN_T45_C20_S45-20-108. Check the current official text before relying on it. Not legal advice.