Nashville, TN – In a significant announcement from the Tennessee Department of Financial Institutions, Commissioner Greg Gonzales has declared a new maximum effective formula interest rate of 12.50 percent per annum for the state. This decision, effective immediately, is tied directly to the current prime loan rate, which stands at 8.50 percent as recently published by the Federal Reserve on March 4, 2024.
This rate adjustment is based on a predetermined formula, adding a 4 percent margin over the weekly average prime loan rate. According to Commissioner Gonzales, this rate will stand until there is a change in the prime loan rate as announced by the Federal Reserve, ensuring that Tennessee’s interest rates remain responsive to the broader economic environment.
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This announcement is in accordance with Chapter 464, Public Acts of 1983, a piece of legislation that mandates the commissioner of Financial Institutions in Tennessee to update and announce the state’s formula rate of interest on a weekly basis. This law underscores the state’s commitment to maintaining a transparent and responsive financial regulatory environment, adjusting to national economic indicators to safeguard both consumer and business interests.
The adjustment in the formula rate of interest is a critical piece of information for financial institutions, borrowers, and investors across Tennessee, affecting everything from loans to savings accounts. As the economic landscape continues to evolve, the Tennessee Department of Financial Institutions remains vigilant in its efforts to balance growth and stability in the state’s financial services sector.
For further details or inquiries regarding the new interest rate, stakeholders are encouraged to contact Alica Owen, Public Information Officer at the Tennessee Department of Financial Institutions.
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