Tennessee Weekly Formula Interest Rate Cap
Summary
The Tennessee Department of Financial Institutions announced the weekly formula interest rate of 10.75% per annum, effective March 31, 2026. The rate is calculated as 4% over the Federal Reserve's weekly average prime loan rate of 6.75%. This rate remains in effect until the Federal Reserve changes the prime rate.
What changed
The Tennessee Commissioner of Financial Institutions issued a weekly formula rate announcement setting the maximum effective interest rate at 10.75% per annum. The rate is derived from a statutory ceiling of 4 percentage points above the Federal Reserve's weekly average prime loan rate of 6.75%, published March 30, 2026. This rate is mandated under Chapter 464, Public Acts of 1983, which requires weekly public announcements of the formula rate.
Lenders operating in Tennessee should track this rate and ensure compliance with the formula rate cap for applicable loans. The rate will remain in effect until the Federal Reserve publishes a different average prime loan rate, at which point the Commissioner will issue a new announcement. This is a routine administrative notice with no new compliance obligations beyond existing statutory requirements.
What to do next
- Monitor weekly formula rate announcements from TN TDFI
- Ensure lending rates comply with the formula rate ceiling of 10.75%
- Review lending agreements for variable rate provisions tied to the formula rate
Source document (simplified)
COMMISSIONER GONZALES ANNOUNCES WEEKLY FORMULA RATE MARCH 31, 2026
Tuesday, March 31, 2026 | 09:23am NASHVILLE--Commissioner of Financial Institutions Greg Gonzales announced today that the maximum effective formula rate of interest in Tennessee is 10.75 percent per annum.
The rate is based on a ceiling of 4 percent over the weekly average prime loan rate of 6.75 percent as published by the Federal Reserve on March 30, 2026.
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.
Alica Owen
Public Information Officer
Tennessee Department of Financial Institutions
(615) 289-4738
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