The average interest rate charged by financial institutions on non-consigned personal loans, popularly known as CDC (direct consumer credit), reached 79.5% a year in July, according to BC (Central Bank) data. Despite this, at least five banks and finance companies charge annual fees ranging from 500% to 1,000%. These rates are up to 12.6 times higher than the market average.
In Brazil, there is no law or regulation that limits the charging of interest, and financial institutions are free to define the rates they will demand from customers for loans. It is up to the CMN (National Monetary Council) to define the rules and public policies for the credit market, including limiting interest rates, as was done in the case of overdraft facilities.
The council is formed by the president of the BC, the minister of economy and the secretary of the Treasury and Budget.
According to BC data, on August 5, these are the highest interest rates charged among 77 institutions (in personal credit, per year):
1. Crefisa Bank: 996.41%
2. JBcred Financial: 960.61%
3. Crefisa Financial: 829.92%
4. Banco BMG: 746.74%
5. Daycoval Bank: 556.83%
O UOL consulted the fees charged by these institutions between 2017 and 2020, to see if they were higher or lower. Interest was already at the same levels charged this year.
Interest is high due to the risk of the operation, says Crefisa
Crefisa stated that the fees charged are within the market average for the risk level of its clients. The company declared that it serves negative clients, considered by the company to be extremely high risk, with several notes in the credit protection agencies and that they do not present any guarantee for the realization of the loans.
“There is no limit in the legislation for the charging of interest by financial institutions, and the rates can be freely agreed. Interest rates vary depending on the credit risk of each customer, requiring the analysis of each specific case,” said the company .
O UOL it also sought out the banks BMG, Daycoval and the finance company JBcred, but the companies did not manifest themselves until the publication of this text.
Wanted to clarify whether the fees charged are abusive and whether it intends to propose to the CMN limits on the interest on personal credit, the BC did not comment.
Government should limit fees, says economist
Economist José Luís Oreiro, professor at UnB (University of Brasília), declared that interest rates of 500% to 1,000% per year are abusive. According to him, it would be up to the CMN to issue a rule to prohibit the charging of such high fees.
According to him, as there is no law or CMN norm on the subject, financial institutions are free to set interest rates. Another problem pointed out by Oreiro is the lack of financial education.
“People don’t have financial education and don’t understand the concepts of interest. In a moment of despair, a client resorts to abusive interest and enters into a process of financial slavery,” he said.
Financial planning is important, says lawyer
Attorney André Corrêa, a specialist in banking and civil law, declared that Brazilian laws do not deal with abusiveness in charging interest from clients of financial institutions.
According to him, each case is analyzed separately by the Judiciary and there are few favorable decisions for clients who feel harmed by fees considered abusive.
Corrêa stated that, when the client signs a contract and receives all the information about the payment term, the value of the installments and the interest rate, the Judiciary usually grants banks and financial institutions a favorable outcome.
This is because it is proven that the client was aware of the rate he was contracting.
“Consumers should be very attentive to the value of the installments, the payment term and the interest rates charged before taking out a loan and signing a contract. Ideally, people make a financial plan to save and not depend on loans” , declared.