Changes to Brazilian Consumer Credit Legislation

Brazilian Banking Law Consumer Defense Code for Bank Customers The Brazilian Central Bank (BACEN) has recently issued Resolution nº 2.878/01, which is already being called the "Consumer Defense Code for Banking Clients" (CDCB). In force since July 26, 2001, this Resolution, in short, rewrites in a more detailed manner and with added focus on the financial market, the rights already stated in Law nº 8.078/90 (Brazilian Consumer Defense Code CDC), related to transactions rendered to customers. The most significant modification concerns the anticipated credit liquidation, an unfavorable issue for consumers. CDCB, in its original form, allowed the debtor the anticipated settlement of his debts with the financial entity, with a proportional reduction of interest. With these modifications, BACEN has restricted this privilege to clients who hold personal credit and Direct Credit to the consumer. On the other hand, some modifications are favorable to the consumers, such as the canceling of automatic accounts debts, at the client's request. Supported by the original text, the financial entities used to deny cancellation requests, arguing that cancellation of direct debts needed to be authorized by the credit receiver companies. Despite this specific regulation issued by BACEN, a client who feels damaged by relations with the financial entity still holds the right to appeal to court protection, supported by the Brazilian Consumer Defense Code CDC.