The new wage cap goes into effect today; check the monthly fee

The new cap of 1.84% (previously 1.91%) for payday loan rates comes into effect this Monday (23). On credit cards with payment of wages and cards with payments, the rate is 2.73% (previously 2.83%).

In practice, this means that financial institutions can charge rates below or equal to the loan installment limit. It should be remembered that in this type of loan, the borrower allows the installments to be deducted directly from wages or benefits (in case of retirement).

The cuts, approved on October 11 by the National Council of Social Security (CNPS), were motivated by a 0.5 percentage point reduction in the Selic rate (the basic interest rate in the economy) — at the end of September, the Monetary Policy Committee (Copom) of the Central Bank lowered the basic interest rates from 13 .25% to 12.75% p.a.

In August, Social Security Minister Carlos Lupi said the department intends to propose further reductions in the wage ceiling as the Selic rate falls. Changes must be approved by the CNPS.

With the new ceiling, banks will have to lower rates on INSS loans. According to the latest data from the Central Bank, Banco do Nordeste and Banco da Amazônia charge 1.91% per month; Banco do Brasil, 1.86% per month; and Caixa fees are lower than the future ceiling, 1.74% per month.

Dissatisfied financial sector

In a joint note, the Federation of Brazilian Banks (Febraban) and the Association of Brazilian Banks (ABBC) criticized the reduction of the interest ceiling on the INSS loan. According to both entities, the reductions since the beginning of the year are artificial and arbitrary.

According to the note by Febraban and ABBC, the efforts of the government’s economic group to adopt measures to improve the credit environment, such as the Guarantee Framework and the implementation of the Desenrola program, are worthwhile. However, the institutions understand that the ministry’s position is not one of dialogue and technical analysis.

“The volume of the concession, if we compare the period from May to August 2022 with the same period of 2023, decreased from 29.3 billion reais to 21.2 billion reais,” the note says. “The average monthly benefit was reduced from 7.3 billion R $ 5.3 billion, according to data from the Central Bank. In other words, R$2 billion less in payday loans in the economy, an annual drop of 27%.”

(With information from Agência Brasil and Estadão Conteúdo)

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