NASHVILLE—The Tennessee Department of Financial Institutions has announced a new maximum effective formula rate of interest for the state, which has been set at 11.75 percent per annum. Greg Gonzales, the Commissioner of the Department, stated that this rate is determined by adding a ceiling of 4 percent to the weekly average prime loan rate, which currently stands at 7.75 percent as per the Federal Reserve’s publication on December 9, 2024.
This rate will continue to be in effect until there is a change in the average prime loan rate as announced by the Federal Reserve Bank. According to Chapter 464, Public Acts of 1983, the Commissioner of Financial Institutions is required to announce the formula rate of interest on a weekly basis.
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For further information, interested parties can contact Alica Owen, the Public Information Officer at the Tennessee Department of Financial Institutions, at (615) 289-4738.
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January 2025 Home Loan Interest Rate Set
Commissioner Gonzales announced that the maximum effective interest rate for home loans in January 2025 is set at 8.43% per annum. This decision follows the Federal National Mortgage Association‘s discontinuation of its auction system and adheres to guidelines established by the 1987 Public Chapter 291. It is recommended that affected individuals seek legal advice regarding the impact of federal regulations on state usury laws. For more information, contact Alica Owen at the Tennessee Department of Financial Institutions.