In an announcement that will surely affect wallets across Tennessee, the Department of Financial Institutions revealed the new maximum effective formula rate of interest. Commissioner Greg Gonzales confirmed that, as of today, Tennesseans are looking at an interest rate ceiling hitting 11.50 percent annually. This uptick is directly tied to a prime loan rate of 7.50 percent, as reported by the Federal Reserve yesterday.
This latest interest rate is formulated to be 4 percent over the weekly average prime loan rate, not a figure taken lightly considering the ongoing conversations about economic stability. To actively maintain this rate seems to be the name of the game until the Federal Reserve announces a change in the prime loan rate. As noted in the current legislation, this financial dance is choreographed by Chapter 464, Public Acts of 1983, which requires these announcements on a weekly basis.
Public Information Officer, Alica Owen of the Tennessee Department of Financial Institutions, broadcasted the news via the department's official announcement. The details, available on the Tennessee Department of Financial Institutions website, come straight from Commissioner Gonzales's statement on the matter. He mentioned, "The rate remains in effect until the average prime loan rate as announced by the Federal Reserve Bank changes."
