Government announces that “interest cannot pass the value of the debt”

The National Monetary Council (CMN) decided this Thursday (21) that interest on revolving credit cards will be limited to an amount equivalent to 100% of the debt. For example, if the debt is R$100, the amount adjusted with fees cannot exceed R$200. The announcement was made by the Minister of Finance, Fernando Haddad.

The body is formed by the Ministries of Finance, Budget and Planning and the Central Bank.

According to Haddad, the changes begin to take effect for debts acquired from January 3, 2024. The collection of Tax on Financial Operations (IOF) was left out of this calculation.

The minister also informed that the determinations on credit card interest limits should not be changed. However, a new decision by the council could modify the proposition.

Although the council has not established a ceiling on interest or credit card installments, this will prevent the value from rising above expectations, like a snowball effect.

The new CMN resolution also applies to legal entities. Initially, banks should present a self-regulation proposal to limit revolving interest. However, there was no consensus.

Haddad stated that a stage had been overcome, even though the dialogue with financial institutions was not successful.

With the measure, the government hopes to reduce defaults and make Brazilians take on debt at lower levels and, consequently, to be able to pay off their debts.

On October 3, Congress approved the interest limit in the bill that establishes the Desenrola Brasil debt renegotiation program. After the sanction of the president, Luiz Inácio Lula da Silva (PT), a limit of 90 days was established for the financial sector to define a proposal to reduce revolving interest rates.

In October, the average card revolving rate was 431.6% per year. The interest paid in installments on the card was 195.6% per year.