Rates of Interest

                                                                                                                                                                                                                                    Announcement of Maximum Effective Formula Rate of Interest

November 28, 2023

NASHVILLE--Tennessee Department of Financial Institutions Commissioner Greg Gonzales announced today that the maximum effective formula rate of interest in Tennessee is 12.50 percent per annum.

The rate is based on a ceiling of 4 percent over the weekly average prime loan rate of 8.50 percent as published by the Federal Reserve on November 27, 2023.

Commissioner Gonzales said the rate remains in effect until the average prime loan rate as announced by the Federal Reserve Bank changes.

Chapter 464, Public Acts of 1983, the legislation regulating interest rates in Tennessee, requires that the commissioner of Financial Institutions make an announcement weekly of the formula rate of interest.

Announcement of Maximum Effective Rate of Interest  on Home Loans

The Federal National Mortgage Association has discontinued its free market auction system for commitments to purchase conventional home mortgages. Therefore, the Commissioner of Financial Institutions hereby announces that the maximum effective rate of interest per annum for home loans as set by the General Assembly in 1987, Public Chapter 291, for the month of December, 2023 is 8.93 percent per annum.

The rate as set by the said law is an amount equal to four percentage points above the index of market yields of long-term government bonds adjusted to a thirty (30) year maturity by the U. S. Department of the Treasury. For the most recent weekly average statistical data available preceding the date of this announcement, the calculated rate is 4.93 percent.

Persons affected by the maximum effective rate of interest for home loans as set forth in this notice should consult legal counsel as to the effect of the Depository Institutions Deregulation and Monetary Control Act of 1980 (P.L. 96-221 as amended by P.L. 96-399) and regulations pursuant to that Act promulgated by the Federal Home Loan Bank Board. State usury laws as they relate to certain loans made after March 31, 1980, may be preempted by this Act.