Bloomberg — Brazil’s lower house of congress approved a bill that limits the growth of credit card debt to 100% of its original amount as part of a plan to rein in interest rates of about 450% a year that are charged on consumers who fall behind on payments.
Lawmakers voted 349-24 in favor of the proposed cap on Tuesday evening. It now must clear the Senate before President Luiz Inacio Lula da Silva can sign it into law.
Once it becomes law, credit card issuers would have 90 days to submit their own regulatory proposal that will need approval from Brazil’s national monetary council. If they fail to do so, the proposed cap would take effect.
Brazil’s banking lobby Febraban said in a statement that such caps may render a considerable portion of cards issued in Brazil economically unviable, reducing the amount of credit available.
The bill approved by lawmakers also sets rules for Desenrola, a consumer debt renegotiation program.
Read more at Bloomberg.com