Lula sanctions ‘Legal Framework for Guarantees’, but vetoes the section that authorized the taking of vehicles without authorization from the Court

[ad_1]

Law establishes new rules for using assets as collateral for loans. The government claimed it was unconstitutional to veto a section where vehicles could be taken without a court order. Veto would count the Treasury’s assessment of which device would be important to lower interest rates. Facade of the Planalto Palace Roberto Stuckert Filho/PR President Lula (PT) sanctioned the so-called “Legal Framework for Guarantees”, which establishes new rules for the use of assets as collateral for loans. However, Lula vetoed a section that authorized the seizure of vehicles without authorization from the Court. The new law was approved by the Senate on October 3rd. The presidential sanction was published in the edition of the “Official Gazette of the Union” this Tuesday (31). The new rules establish conditions for the seizure, mortgage or transfer of properties to pay debts. The government’s economic team believes that the measures can stimulate the credit market. According to the approved text, the same asset can be used as collateral in more than one loan request. How it was: a property worth R$200,000, for example, could only be used as collateral for a single credit operation until the amount was paid off — even if the debt was of a smaller value, such as R$50,000. How it looks: now, the remaining R$150,000 of the asset can also serve as collateral for other loans. In relation to the section that was vetoed, the text provided that it would be possible to take vehicles without authorization from the Court, through extrajudicial warrants. Extrajudicial seizure would be applied in cases where the debtor does not deliver the asset within the established legal deadline. Notary offices would be authorized to post the seizure on an electronic platform. When arguing the veto, the government claimed that the section is unconstitutional and could create a risk to individual rights and guarantees. Position of the Ministry of Finance The veto of the device that facilitates the repossession of the vehicle in the event of default contradicts the Ministry of Finance’s assessment that it would be important to lower the interest rate on bank loans for car purchases. Earlier this month, the Secretary of Economic Reforms at the Ministry of Finance, Marcos Pinto, defended the measure. “Financiers had to go to court, this took a long time, it was a complicated process, and a large part of the financed cars disappeared in these processes. The law improved and ‘de-judicialized’. To make financing costs cheaper for everyone”, said Marcos Pinto, from Ministry of Finance, on the occasion. He also declared, at that time, that there is a culture in Brazil that is a bit concerned with debtors, which is fair. But he added that the good payer, due to the difficulties in recovering the cars, is bearing the costs of the bad payer (as everyone pays higher interest). “With lower interest rates, the risk of default is lower. One of the reasons why default rates are so high is because interest rates are high. Credit is not recovered, interest rates rise, generating defaults, and interest rates rise further. We are trying to implement a a virtuous cycle, as the population paying lower interest rates is able to afford financing and is able to reduce further interest rates in the future”, explained the secretary, at the beginning of October. ‘Zero deficit’: understand the government’s difficulties in meeting the goal of closing the hole in public accounts VIDEOS: most watched on g1

[ad_2]

Source link