Febraban criticizes Lupi after reduction in the INSS payroll interest ceiling

The Brazilian Federation of Banks (Febraban) criticized the Social Security Minister, Carlos Lupi, after the National Social Security Council (CNPS) reduced the payroll interest ceiling for INSS retirees and pensioners to 1.80% per month. The entity stated that the decision was taken “without the support of technical analysis” and in a “totally arbitrary and artificial” manner.

“This is an action marked by a lack of responsibility with credit policy, by not taking into account any economically reasonable criteria, such as the cost structure of banks, both in attracting funding and in granting loans to retirees”, said the entity this Tuesday (5).

Febraban pointed out that “the conduct of the Minister of Social Security is in no way consistent with the efforts of the government’s economic team, which has been adopting several correct measures to improve the credit environment in the country”.

This Monday (4), the council approved the new interest limit of 1.8% per month for these operations by 14 votes to 1. The new ceiling is 0.04 percentage points lower than the old limit of 1. 84% per month, a level that had been in effect since October. The justification for the reduction was the 0.5 percentage point cut in Selic, the basic interest rate. At the end of September, the Central Bank’s Monetary Policy Committee (Copom) reduced basic interest rates from 12.75% to 12.25% per year.

Last week, the ministry had proposed that the ceiling fall to 1.77%, with payroll deductions, and to 2.62% on payroll credit cards. The only vote against at the board meeting was that of the banks’ representative, reported the Brazil Agency. “Under the willful claim of benefiting retirees, in practice, artificial reductions are having a harmful effect on the most vulnerable section of this INSS public, who need credit under more accessible conditions”, highlighted the entity.

Febraban stated that it has notified Lupi of the consequences measured as the drop in the volume of payroll concessions from R$36.1 billion to R$29.7 billion, from May to September 2022 compared to the same period in 2023. According to the banks, the average monthly concession was reduced from R$ 7.2 billion to R$ 5.9 billion, that is, R$ 1.3 billion per month less credit granted in the economy: a drop of 22%; In addition, banking correspondent stores were closed and employees were laid off.

“As long as arbitrary decisions are made, based on superficial narratives, in the incessant search to artificially reduce the fee ceiling in any form, without evaluating and mitigating the damage to retirees that such measures may cause, Febraban will continue to express its indignation and contradiction”, reinforced the federation.