CPI rapporteur proposes fixed rate and interest in cards and overdraft – News

Senator Fernando Bezerra (MDB-PE), rapporteur of the CPI (Parliamentary Inquiry Committee) for credit cards, proposed to the Central Bank (BC) and the Council of 39, administration for economic defense

In his report, read Wednesday (4) to the IPC, Bezerra proposes the reduction of the payment period to traders, changes in the interest of revolving credit, between other measures. The idea is that they are implemented within six months.

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In addition, Bezerra will propose three bills that focus on both credit cards and overdrafts. One of them is for educational purposes, forcing banks and stores to display billboards warning consumers of the risks of credit card debt and overdraft fees.

The third bill provides for the creation of a new credit instrument, which will be backed by receivables generated by sales made by traders on the card. The idea is that this new title can be traded in the financial market, giving more options to the trader who wants to anticipate the payment of sales made on the card.

"It is necessary to improve certain standards in this complex sector to increase competition,"

"The rates of these two products [cartão de crédito e cheque especial] are exorbitant, abusive, averaging 400% per annum, and can reach 1,000% per year, as evidenced by the discussions, "said Bezerra when reading his report to the ICC

Understanding below the main measures proposed by the CPI credit cards

The special check and revolving card will include a flat rate plus interest 19659012] Bezerra proposed changes in the method of collection of overdraft and revolving credit According to the model adopted in the United States and in some European countries, these products would be with a flat rate, plus interest, but would be lower than current interest rates.

In the view of the senator, the flat rate would be for: & # 39; operating financial institutions. "The logic of this measure is to discourage the usual use of overdraft and rotary, which should be used as an emergency resource."

The Central Bank had already made changes in the newspaper's rules in the past year, barring the client's debt from staying more than 30 days in that line of credit.

Anticipation of the payment period for traders

The CPI's rapporteur for credit cards also suggested that operators reduce the amount of credit they owe to creditors. term of payment of sales to retailers. Today, this period is 30 days (D + 30, in financial market jargon). However, Bezerra did not say what would be the new payment term. "The new deadline will be consolidated among the members of the IPC," he said.

Reduce the deadline for payment is one of the most critical problems in the card industry. A very short period of time may prevent small businesses and Fintech from operating in the carton market because of the limited capital of these companies. In practice, they will have to pay the merchants in two days, whereas the payment of the bill by the consumers will take place on average 28 days.

Fixed tariff value to the merchant for the sale of the debt

The IPC rapporteur also recommended the encouragement of instant electronic payments (such as wire transfers, online deposits and electronic wallets) and the changes in merchant prices when the customer uses the card's debit function.

It is proposed that this fee become a fixed amount or fixed flat rates, in installments of marketed securities, instead of a percentage of the purchase value. "The cash sale presents no risk to the merchant or the financial system, and the value of the purchase is available in the customer's current account," said the senator. introduce a bill requiring banks and companies to invest some of the billing in financial education actions. The idea is to give more transparency to interest on the credit card and the overdraft, alerting on the risk of being in debt by these credit instruments.

Another bill provides for the prohibition of advertising that refers to installment credit. "without interest". "We know that this does not exist, it's a lie, an error for the consumer," Bezerra said. On the other hand, the CPI has suggested the promotion of a new product, called "crediário", that would work as a slice with interest

Turn traders' claims into marketable securities

A third bill that Bezerra intends to introduce provides for the conversion of receivables (right to receive at a later date the value of a sale already made) tenants in securities that can be freely traded on the financial market.

With the negotiation of claims, the merchant may receive in the act the payment of a sale that would take place only 30 days after the sale. This early repayment is done by means of a discount rate agreed between the merchant and the card operator.

Bezerra states that, in theory, traders can market these claims on the market. However, there are serious limitations to this sale, due to the anticompetitive conduct of some market participants, the anticipation is done with the bank associated with the buyer and with interest rates excessively high for the risk incurred. "

at the credit card exchange rate

The IPC will also recommend to the Central Bank (CB) to impose a ceiling for the exchange rate in the use of the card credit, following a measure already adopted by the BC in March this year to reduce the cost to merchants of the debit function cards.

Bezerra believes that the exchange rate reduction should lead to a lower discount rate, reducing the costs of traders, which would be

Abuse of vertical card companies

The CPI of credit cards concludes that the fact that big banks are is a card issuer and, at the same time, controls buyers and flags, severely restricts competition in the sector.

Bezerra explains in his report that this vertical structure of card companies "allows for a series of transactions. roisées. distortion of relevant prices (exchange rate, discount rate, card annuity, etc.), with the aim of eliminating competition. "

The Senator recalled that Cade has initiated administrative inquiries to investigate complaints of anti-competitive practices arising from verticalization, such as a marriage sale (contractual or de facto) between the terms of payment and the date of payment. accreditation of the same financial conglomerate, and the imposition of difficulties of access to small and new traders.

"It is important to know the reality of the Brazilian market to, if necessary, require measures to change their current organization, in a sense similar to what other countries have done. The solution, in many cases, does not necessarily lie in the interference in the structure of a vertical conglomerate, but in the punishment of those who abuse this position, "says Bezerra report