Commissioner Greg Gonzales has set the maximum effective formula interest rate in Tennessee at 10.90 percent per annum. The rate is calculated using the weekly average prime loan rate, which currently stands at 6.90 percent, as reported by the Federal Reserve, plus an additional 4 percent as required by statute, according to the Department of Financial Institutions. The rate change was announced today and may affect loan repayments, credit card interest rates, and savings returns for consumers across the state.
Operative until it is spurred by further shifts in the prime loan rate, the cap announced by Gonzales, as per the Tennessee Department of Financial Institutions, "remains in effect until the average prime loan rate as announced by the Federal Reserve Bank changes." With the volatility of financial markets, the Commissioner's weekly updates provide a semblance of predictability amid tides of economic change.
For those not versed in the legislative backdrop, this setting of rates finds its origin in Chapter 464, Public Acts of 1983. The law requires the Commissioner of Financial Institutions to inform the public about the formula rate of interest on a weekly schedule. The announcement, not just a formality but a device that ensures financial transparency, was made public by the Tennessee Department of Financial Institutions. The Public Information Officer, Alica Owen, ensuring the communication channels remain unobstructed, can be reached at (615) 289-4738 for more insight or clarification about these interest rates that could pivot the financial planning of individuals and companies alike.
Find full details on the announced rate on the Tennessee Department of Financial Institutions website.
