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LOAN
Overturned rule that would favor banks paying INSS benefits in offering payroll loans
The rule was overturned in an action by the Brazilian Banks Association (ABBC)
Published on October 22, 2024 at 09:09
Judge Flávio Jardim, from the Federal Regional Court (TRF) of the 1st Region, of the Federal District, overturned the rule published by the National Social Security Institute (INSS) that would allow, from next year, banks paying pensions and institute pensions had exclusivity to offer consigned credit to beneficiaries in the first three months of receiving the benefit.
The rule was overturned in an action by the Brazilian Banks Association (ABBC). The entity, which represents medium-sized institutions, has claimed that the rule creates inequality in competition with large banks, which are traditionally the largest payers of INSS benefits.
In the decision, the judge states that the rule, published by the government at the end of August, creates privileged treatment for the first payer of the benefit to the detriment of other banks. This is because other banks would not only not be able to offer payroll loans in the first 90 days of payment of benefits, but would also not be able to port transactions generated during this period.
As Estadão/Broadcast showed in September, banks estimate that the rule would create a “market reserve” of around R$1.8 billion. Behind the scenes, the view was that the rule was edited to increase the bids that the INSS will receive in the payroll auction for the next five years, scheduled for this Tuesday, 22
According to the original rules, the offer of credit granted by any banks was prohibited in the first three months of payment of INSS benefits. In the view of medium-sized banks, any change would have to open concessions to all market participants.
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