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DEPARTMENT OF FINANCIAL INSTITUTIONS

414 Union Street, 10th Floor

Nashville, TN 37219

(615) 741-2236

TN.gov/tdfi

Greg Gonzales, Commissioner

Financial institutions are symbols of security for most individuals. Their role

in business and industry is crucial to the growth of the country’s economy and to

personal well-being.

In Tennessee, banking is big business. At year-end 2008, the Department of

Financial Institutions regulated 160 state-chartered banks, eight trust compa-

nies, two business and industrial development corporations (BIDCOs), 111 credit

unions, 1,009 industrial loan and thrift offices, 68 insurance premium finance

companies, 1,275 mortgage companies, 638 check cashers, 1,359 deferred present-

ment services companies, 742 title pledge lenders and 61 money transmitters.

The department also registers thousands of mortgage loan originators.

The department has legal responsibility for assuring the Tennessee banking

system operates on a safe and sound basis. In its supervisory role, the depart-

ment periodically examines the financial condition of each financial institution

it regulates. The Bank Division is accredited by the Conference of State Bank

Supervisors (CSBS), and the Credit Union Division is accredited by the National

Association of State Credit Union Supervisors (NASCUS). The department is a

member of the Money Transmitter Regulators Association (MTRA), National As-

sociation of Consumer Credit Administrators (NACCA) and the American Associa-

tion of Residential Mortgage Regulators (AARMR). In addition, the department

facilitates consumer complaints involving financial institutions and promotes

financial literacy programs through its Consumer Resources Division.

The department is the administration’s primary source for new bank-related

legislation and also adopts its own administrative regulations to conform to the

ever-changing needs of consumers and the industry.

History

Created in 1913, the Banking Department was headed by the Superintendent

of Banks. Ten years later, supervision of state-chartered credit unions was added

to its responsibilities. Over the next 70 years, the department saw more changes,

one of which was a final name change to the Tennessee Department of Financial

Institutions.

In addition to depository institutions (banks and credit unions), regulatory

responsibilities were increased to include nondepository institutions – trust

companies, BIDCOs, industrial loan and thrift offices, insurance premium finance

companies, mortgage companies, check cashers, title pledge lenders, deferred

presentment services companies and money transmitters. The department’s

primary mission still remains the same after 96 years, which is to ensure all

financial institutions in Tennessee operate in a safe and sound manner and

comply with applicable law.

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Services

The department is organized in accordance with Tennessee Code Annotated

§45-1-115 and has five divisions. Services are provided at no direct cost to the

taxpayer because the department is funded entirely by fees received from the

financial institutions it regulates.

Bank. This Division has the legal responsibility for assuring the Tennessee

state-chartered banking system operates on a safe and sound basis. In its

supervisory role, the Bank Division periodically examines the financial soundness

of all state-chartered banks, savings banks and nondepository independent trust

companies. Bank examiners perform evaluations of each institution’s assets,

liabilities, income and expenses; monitor compliance with governing laws and

regulations; and rate the effectiveness of the institution’s management. The

adequacy of capital is assessed to assure the protection of depositors. In addition,

examiners review the information technology functions of state-chartered financial

institutions for compliance with generally accepted information technology

practices and for adherence to departmental regulations. Bank Division staff

also examines Business and Industrial Development Corporations (BIDCOs)

and money transmitters for compliance with governing statutes and evaluates

applications for new institutions, branches, expanded financial activities and

corporate reorganizations.

Credit Union. This Division is responsible for the supervision and examination

of each state-chartered credit union and one corporate credit union. Examiners

perform safety and soundness examinations of each state-chartered credit union

and Volunteer Corporate Credit Union to determine compliance with governing

laws and regulations. Credit union examiners perform evaluations of each credit

union’s assets, liabilities, income and expenses in order to assess the solvency of

the credit union.

Compliance. This Division is responsible for the licensing and regulatory

supervision of the following types of financial institutions operating in Tennessee:

industrial loan and thrift companies; insurance premium finance companies;

residential mortgage lenders, brokers and servicers; check cashing; deferred

presentment service companies; and title pledge lenders. The Compliance

Division also registers thousands of mortgage loan originators. Through a

comprehensive examination program, all of the above industries are subject to

periodic examinations by the Division’s field examiners. The Compliance Division’s

examinations are designed to test and enforce compliance with Tennessee laws,

as well as federal regulations.

Consumer Resources. This Division coordinates the handling of consumer

complaints, fosters community outreach and encourages financial literacy in

Tennessee. With the creation of this Division in March 2004, the Department

of Financial Institutions encourages programs aimed at increasing the financial

literacy of adults and youth statewide. The department believes financial literacy

is necessary to assist Tennesseans in making good financial decisions on a daily

basis which includes helping citizens avoid predatory lending practices. The

Division serves as a conduit to help citizens have access to financial education

programs.

Legal/Administrative and Support Services. The Legal Section provides

legal advice and representation for the department. The department’s lawyers

advise the Commissioner and departmental personnel in all legal matters affecting

the department. They work with regulated entities and the general public in

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addressing legal issues. They also work closely with the Governor’s Office and the

Tennessee General Assembly on legislative issues affecting financial institutions.

The Legal Section assists in the coordination of enforcement initiatives with other

federal and state regulators as well as with various law enforcement agencies.

The Administrative and Support Services Section administers the department’s

budget and oversees fiscal services, human resources, training and information

systems.

Commissioner Greg Gonzales

Tennessee Department of Financial Institutions

Greg Gonzales was born in Cookeville, Tenn. He was sworn in as the

18th Commissioner of the Tennessee Department of Financial Institutions

on January 20, 2007, by Governor Phil Bredesen and has served in the

department since 1986. In this position, Commissioner Gonzales serves as

Tennessee’s chief regulatory officer of all state-chartered depository and

licensed nondepository financial institutions. The department supervises

approximately 6,000 financial institutions doing business in Tennessee. Prior

to being named Commissioner, Gonzales served as Acting Commissioner be-

ginning in December 2005. He previously served as Assistant Commissioner

and General Counsel. In the Assistant Commissioner role, he was responsible

for coordinating the provision of legal advice to the Commissioner and the

department. Commissioner Gonzales has also directed the budget, human

resources and legislative analysis functions for the department. In addition,

he serves on the Board of Directors of the Conference of State Bank Supervi-

sors, which is the professional organization of state banking Commissioners. Commissioner Gonzales

is a member of the Board of Directors of the Money Transmitter Regulators Association (MTRA), an

organization of a majority of the states that regulate funds transfer companies. He chaired the MTRA

Legislative Committee, which drafted a national model legislative outline and later chaired the Coopera-

tive Agreement Committee, which produced the Money Transmitter Regulators Nationwide Cooperative

Agreement that has been executed by a majority of states. Commissioner Gonzales graduated Cum

Laude in Cursu Honorum with a bachelor’s degree from Tennessee Technological University in 1980.

He served as a research assistant in 1980 to Sir Patrick Cormack, a Conservative Party member of the

British Parliament. He earned a law degree from the University of Tennessee in 1984. Commissioner

Gonzales is married to the former Lori Layne and they have a daughter, Annie.