The National Monetary Council (CMN) decided last Monday (29) that financial institutions could quickly reduce the credit card limit of customers who have a higher risk of default.
Credit Card Limit Changes
According to the Daisy Bank, in an article published by Late News Brasil, the measure was taken by the need for banks to better manage risks and thus not increase the bank spread even further, which is the difference between the interest obtained by the institution and the interest rates. that are charged to the consumer.
Earlier this year, in April, CMN had already established that financial institutions had to wait 30 days from informing the customer that he was in danger of not being able to pay the bill before lowering the card limit. With this amendment made yesterday, in exceptional cases this time limit may be waived and the limit reduced shortly after communication.
It will now be up to the institution to define the deadline for changing the credit limit and establishing the criteria for exceptionality, in accordance with its credit policy and risk management.
According to the Daisy Bank, this immediate reduction will always be only in these atypical cases, when the bank finds a significant deterioration in the customer’s default risk. Still according to the BC, this could result in cheaper interest for consumers.
Credit limits for managers or relatives of managers of financial institutions
In addition to the issues outlined above, the CMN has also regulated the limits that managers or relatives of managers of financial institutions may borrow in the places where they operate. With this, individuals can only borrow up to 1% of adjusted net equity. For companies, the limit is 5%. The sum of all these loans may not exceed 10% of the managed institution’s equity.
This measure, however, applies only to the controllers of financial institutions, directors and members of statutory or contractual bodies, persons and companies with at least 15% of the shares or quotas of banks or those with effective capital control. The restrictions apply not only to loans and financing, but to any credit instrument, such as cards and overdrafts.
Prior to this determination, individuals and companies were prohibited from performing any financial transaction at the institutions in which they operated. There was already a November Law of last year allowing this, but it was not effective because it depended on Council regulation.