Treasury calls for urgency in voting on the legal framework for loan guarantees

To this end, the framework seeks to increase the efficiency of bank guarantees and reduce the legal uncertainty perceived by the financial sector. The bill intends to speed up and make the execution of guarantees cheaper by banks in cases of default by the party that took the credit.

Chaired by federal deputy Arnaldo Jardim (Cidadania-SP), the Parliamentary Front for Competitive Brazil published a note supporting Haddad’s request for urgency in processing the milestone. According to Jardim, access to cheaper credit is fundamental for those who want to undertake, but in Brazil, it is “scarce and expensive”, which ends up hindering the emergence of new businesses and the expansion of existing companies.

“O spread in Brazil it is extremely high. The financial sector justifies this rate on account of risks and the framework of guarantees aims to reduce risks, to provide more security and, with that, we are able to have a spread smaller and having a more accessible cost of money financing. The entrepreneur wins with this, the consumer wins with this, who ends up no longer paying this Brazil Cost, which also has an impact on prices for citizens”, he says.

obstacles

According to the Brazilian Federation of Banks (Febraban), Brazil is the country that least recovers guarantees in the world, which takes longer and costs more to recover a guarantee.

Data show that the country recovers only US$ 0.146 for every dollar given as collateral in cases where companies file for bankruptcy. That is, for every US$ 100 given in guarantee, the financial sector recovers US$ 14.6. In England, the recovery percentage reaches US$ 0.853. Even in emerging countries, the median is around US$ 0.416 per dollar given in guarantee, about three times the value in Brazil.

In a note, Febraban stated that “predictability and legal certainty for the fulfillment of contracts and effectiveness of guarantees constitute the essence of credit”. According to the entity, “the security in the fulfillment of any obligation is in the strength of the guarantees, which if they are ‘weak’ or difficult to perform, increase the risk of the business not being executed and, consequently, increasing its cost or even making it unfeasible “.

According to Febraban, the credit recovery period in Brazil is long (an average of four years) and the cost relatively high (the recovery process usually consumes around 12% of the amount to be recovered).

These factors, combined with bad debt, the tax burden, interest rates and inflation, as well as bank concentration, are identified as obstacles to the offer of credit at lower interest rates.

Chamber of Deputies approves new legal framework for guarantees

MARK OF GUARANTEES: PL can increase credit offer and lower interest rates

Changes

The bill creates the figure of Guarantee Management Institutions (IGGs). They will be responsible for bridging the gap between financial institutions and businesses and citizens who wish to borrow money. The IGGs will evaluate real and personal guarantees; register them in a notary and enforce the debt in case of default by the borrower.

The citizen or company that wants to contract the collateral management service may sign a formal agreement with the IGG, the collateral management contract. Already in the document it will be possible to know the maximum amount of credit that can be linked to the guarantees given by those who want the loan or financing. With this contract, the interested party will be able to go to different banks and institutions to evaluate the best conditions for obtaining credit.

According to the Bolsonaro government, author of the PL, the presence of the IGGs will free financial institutions to act only in granting loans and financing, reducing the costs that these companies have with the management of guarantees. This is expected to lower credit costs in general. It is worth remembering that banks will continue to be able to manage guarantees, but IGGs cannot offer credit.

The legal framework of the guarantees also establishes that, as the company or citizen pays the financing installments, space is opened for new credit operations up to the limit established in the management contract, without additional bureaucracy. Also according to the framework, the same property may be used as collateral in different financing operations, which is currently not possible.

When passing through the Chamber of Deputies, the original text was approved with the addition of an amendment to the substitute for federal deputy João Maia (PL-RN), rapporteur of the bill. The amendment extends to movable property, such as vehicles, for example, the possibility of extrajudicial collection, that is, out of court, in case of default by the debtor.

Today, when a vehicle is given as collateral for fiduciary alienation and the borrower fails to pay the loan, banks need to go to court to seize the good. With the inclusion of the amendment to the PL, creditors will have the option to execute the guarantee without going to court, which was already possible for real estate, such as apartments and houses.