Tennesseans dealing with loans and credit just received an update that could affect their wallets. Announced by Commissioner Greg Gonzales of the Tennessee Department of Financial Institutions, there's a new weekly maximum interest rate. As of December 23, borrowers in the state could be looking at a rate of 11.65 percent per annum, according to the Department of Financial Institutions.
This figure isn't pulled from thin air; it's determined by adding a 4 percent margin to the current prime loan rate, which the Federal Reserve sets. Last week, that rate sat at 7.65 percent. Despite the change, this new rate will hold steady—until a Federal Reserve update says otherwise. "The rate remains in effect until the average prime loan rate as announced by the Federal Reserve Bank changes," said Commissioner Gonzales, as stated by the Department of Financial Institutions.
The practice of adjusting interest rates is nothing new in Tennessee. A piece of legislation from 1983 mandates these updates. For those keeping an eye on their interest payments, it's worth noting that these announcements come out every week. Chapter 464, Public Acts of 1983, is the act responsible for this regulatory process. Commissioner Gonzales’ duty in this dynamic landscape is to inform Tennessee's public on these shifts as they happen. Keeping up with these changes is essential, whether you are a borrower, investor, or financial institution in the state.
