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São Paulo, March 13, 2019 - The Federal Senate's approval of PLP 54/2019, which establishes the Positive Registry with automatic inclusion of consumers and companies, is a fundamental step towards tackling one of the country's major problems: the high default rate, which affects around 60 million citizens and consequently contributes to the high interest rates charged to individuals and companies.
The approved text, which now goes for presidential sanction, comes into force 91 days after its publication in the Official Gazette. Once the law comes into force, bureaus will have 30 days to notify consumers about the opening of the Positive Register. Consumers, in turn, will have up to 60 days from the entry into force of the law to ask for their name to be removed. Even though this period is defined by law, according to the legislation, consumers will be able to ask for their name to be removed at any time, even after the 60 days have passed. “But the sector's expectation is that there will be widespread adherence to the Positive Register,” says Elias Sfeir, president of National Association of Credit Bureaus.
He notes that the formation of a register with positive information is a stimulus to the creditor, who has more guarantee of receipt, and to the borrower, who can have more accessible credit and greater control over their information. “The more information available about the borrower, the more efficient the risk assessment and, consequently, the more business can be done by the creditor, who can more assertively identify the profile of their clients, whether they are individuals or companies,” he says.
Once the new Cadastro Positivo comes into force, consumers will have a credit score based on their credit history. With this score, customers who are good payers will be able to claim lower interest rates, and companies will be able to grant this reduction because they will have access to their score. This new configuration tends to stimulate the expansion of the credit market in Brazil, with benefits for economy and society.
Studies carried out by companies in the sector indicate that the Positive Registry could enable around 22 million citizens - the equivalent of more than 10% of the Brazilian population - to enter the credit market. This will be possible because, in addition to paying off mortgages and loans, the new CP will also take into account the payment of ongoing bills, such as electricity, water, telephone and gas, when forming the credit rating. At the same time, according to research by the International Finance Corporation (IFC), the Positive Registry has the potential to reduce default by up to 45%, which in Brazil affects around 60 million people.
At the same time, the Positive Registry could increase GDP by 0.54% per year, according to a study by LCA Consultores. And, according to industry analysis, the Positive Registry has the potential to inject up to R$ 1.1 trillion into the economy and provide an expansion in credit of around R$ 790 billion for companies of all sizes and R$ 550 billion, or 8.4% of GDP, for 4 million micro and small companies, which employ the largest share of the workforce in the whole country. As a consequence of this stimulus to economic activity, the Cadastro Positivo has the potential to increase the collection of federal taxes and contributions administered by the Receita Federal by up to R$ 450 billion, without changing tax rates. And to increase by R$ 205.7 billion the collection of ICMS and IPVA by the Brazilian states.
The potential of the Positive Registry to contribute to the expansion of the credit market has already been proven in several countries where it has been implemented. Successful examples include Belgium, the United States, Mexico and the United Kingdom.
ANBC Press Relations
Regina Pimenta: (11) 98136.6835 regina@pimenta.com
Ana Carolina Rodrigues: (11) 98674.0348 anacarolina@pimenta.com
