Lula sanctions Marco das Garantias with a veto on the seizure of vehicles without a warrant

President Luiz Inácio Lula da Silva sanctioned this Tuesday (31) the “Marco das Garantias”, a measure that aims to make the use of properties as guarantees for loans more flexible and simplify the execution of debts by banks and creditors in cases of default.

The sanction to the project approved by the Chamber on October 3rd was published in the Official Gazette of the Union (see in full). The original text was sent to Congress at the end of 2021, still during the administration of former president Jair Bolsonaro (PL).

The “Marco das Guarantees” law is considered important for the government to reduce the cost of borrowing in the country and will directly impact the real estate market. The legislation, however, had part of the text vetoed in the section where it allowed the seizure of vehicles given as collateral without the need for judicial authorization.

The framework seeks to change the rules related to guarantees offered to obtain credit, making the execution of debts in situations of default more agile. This process reduces the risk for the lender and, consequently, the cost of loans.

One of the most significant changes introduced by the new text is the permission for the same property to be used as collateral in multiple financing requests. This means that the value of the property can be divided into several financings, until the total sum is reached.

The new rule has the potential to reduce the risk of default, which generates the expectation of a reduction in the cost of credit.

The vetoed section would allow the creditor to request extrajudicial search and seizure. Lula justified the veto by arguing that the proposal presented an “unconstitutionality defect”, as it would create an extrajudicial method of searching and seizing movable assets.