(English) Pratical consequences of the Federal Supreme Court’s decision that authorized the capitalization of interest

[:en]As already widely reported by the national press, the full brench of the Federal Supreme Court (STF) maintained the validity of the Provisional Presidential Decree (MP) nº. 1963/2000, which allows the institutions that are part of the Brazilian Financial System the monthly capitalization of interest with a periodicity lower than a year.

Excepted the legal impact of the decision, as the release of the 13.584[1] procedures that were with pending suspended and the legal certainty ensured by this theme, we cannot claim which will be the objectives reflections of maintaining the MP in relation to the existing practice in the market for application of interest. From what is known, is that the buzz generated by the discussion about the validity x invalidity of this device rekindle the reflection on the real implication of the capitalization of interest in the current economic context.

From a historical analysis of Brazilian legislation, it is possible to see that our legal system allows, within certain criteria, the capitalization of interest since 1850, when the current Commercial Code provided about the accumulation of accrued interest on liquidated balances on current account year by year. Subsequently, the Civil Code of 1916 (art. 1262) also predicted, since established in an express clause, the possibility of allocation capitalized interest on loans, although it is above the legal rate. In 1933, this dispositive was partially repealed by the Decree nº 22.626 (Usury Law), which allowed the accumulation of accrued interest on liquidated balances on current account, in condition with an annual basis[2].

Even if it is not unprecedented matter, the reedition of the MP 1.963 in 2000 caused a big uproar. With regard of the debates that surrounded the theme, it was argued that the capitalization of interest would be a strong tool to reduce rates, since that in banking practice, it was adopted the inclusion of an additional value to the nominal rates to compensate the capitalization not charged[3]. Thus, the seal capitalization promote an effect of penalizing borrowers of defaulting loans, since they would be burdened by the widespread increase of loan charges.

Along the same line of argument followed the Explanatory Memorandum of that Measure, drawn up by the Finance Minister Pedro Malan. It was emphasized by the i. Minister the need to adjust the value of the spread banking by decreasing the risk of operations, which would be made possible by the reduction of the rates charged due to the possibility of capitalization of interest[4].

In short, back to the debates in the beginning of the decade, indicated the expectation of cheap and accessible credits, due to the equalization of bank risk by the possibility of applying interest for late payment above the legal level.

By now, in 2015, it is observed an informal analysis of the subject, is that the expected trend of reduction of interest rates did not materialize. As pointed the Chief Prosecutor of the Central Bank, Isaac Sidney Menezes Ferreira, the insecurity caused by potential invalidity of that MP caused a reverse effect, ie “banks signed contracts with capitalized and very high interests – if the courts would declare the illegal contract, the price of interest will compensate the risk[5]“.

According to the data provided by the Central Bank and compiled in the table below, it is possible to infer that the average monthly rate is used in the past 6 years by the selected institutions exceed by more than 50% the legal interest level established to 1%.

TABLE – MONTHLY FEE FIXED RATE LEGAL ENTITY[6]

*Data according to Itaú Unibanco

It is worth remembering that the capitalization of interest for loans in Europe is generally practiced and usual, which coexist in perfect harmony with the interest rates established at affordable levels and much lower than those available in Brazil.

In conclusion, it is really expected that the decision on the validity of MP 1.963/2000 bring glimpsed effect upon its reediton: the credit cheaper and application of interest rates by financial institutions to encourage the investment and to increase the productive capacity of the country.

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[1] http://www.stf.jus.br/portal/cms/verJulgamentoDetalhe.asp?idConteudo=284801.

[2] BABILÔNIA, Paulo Álvares; BARBOSA, Theresa Karina F.G; FERREIRA, José Coelho. A capitalização de juros no nosso sistema jurídico. Revista Jurídica do Planalto, Brasília, vol. 2, n. 12, maio 2000. Disponível em http://www.planalto.gov.br/ccivil_03/revista/Rev_12/capit-juros.htm. Data de acesso: 25/02/2015.

[3] LOYOLA, G. A pior maneira de reduzir os juros. Estado de São Paulo, São Paulo, 23 abr. 2000. In.: A capitalização de juros no nosso sistema jurídico, Revista Jurídica do Planalto, Brasília, vol. 2, n. 12, maio 2000.

[4] ________. A capitalização de juros no nosso sistema jurídico. Revista Jurídica do Planalto, Brasília, vol. 2, n. 12, maio 2000. Disponível em http://www.planalto.gov.br/ccivil_03/revista/Rev_12/capit-juros.htm. Data de acesso: 25/02/2015.

[5] CANÁRIO, Pedro. Supremo autoriza capitalização de juros em empréstimos bancários.Conjur Consultor Jurídico. Disponível em: http://www.conjur.com.br/2015-fev-04/supremo-autoriza-capitalizacao-juros-emprestimos-bancarios.

[6] Table elaborated in accordance with the data provided by the Central Banck of Brazil. Disponível em: http://www.bcb.gov.br/pt-br/sfn/infopban/txcred/txjuros/Paginas/Historico.aspx[:]