Aposentados podem ter volta do consignado do INSS com novo teto de juros definido por Lula

President Luiz Inácio Lula da Silva has set a new limit of 1.97% per month for the consigned loan for the National Social Security Institute (INSS), in an attempt to revive the INSS consigned loan modality for pensioners and INSS retirees. The decision comes after a lack of consensus among ministers in the government. The new rate will be re-evaluated within 30 days by the National Council for Social Security (CNPS).

The consigned credit card rate for retirees is also expected to rise to 2.89% per month, compared to the current rate of 2.62%. This decision was made after multiple financial institutions closed their consigned credit lines for INSS retirees and pensioners following the CNPS’s decision to reduce the ceiling rate from 2.14% to 1.7% on March 13. Even state banks such as Caixa and Banco do Brasil refused to continue offering credit, citing unfeasibility.

The negotiations between banks and the Ministry of Finance indicated that the credit line would be reopened to INSS beneficiaries at a rate of 1.99%. Meanwhile, INSS retirees sent a letter to the Minister of Social Security, Carlos Lupi, advocating for a 1.90% rate per month. The minister also desired a rate below 1.99%.

Lula’s decision is clearly a “halfway measure” between the INSS beneficiaries and the financial institutions, the latter of which will grant the credit. However, it remains uncertain whether the institutions will accept the new ceiling nor the Council. The banks have participation in the Council but lost during the previous vote.

Meanwhile, Caixa Economica Federal announced that it intends to reopen the credit line on Tuesday (March 28), following the CNPS meeting. The new interest rate ceiling will undoubtedly benefit retirees and pensioners who need loans and consignment on their payroll to receive the amounts directly on their INSS benefits.

The decision to set the new ceiling rate comes after various institutions closed their credit lines, leaving retirees in a difficult financial situation. Pensioners were left with no alternative options to get credit, which had led many of them to accumulate debts with pawnshops, credit cards with high-interest rates, and illegal lenders.

The consigned loan is one of the best options for retirees and pensioners because the installment is discounted directly in their benefit. With the reduction of the interest rate ceiling, the consigned loan becomes a more viable option for INSS retirees and pensioners to organize their finances in the midst of the pandemic.

According to data from the INSS, the consigned credit market accumulated more than R$130 billion (USD 23.7 billion) in personal loans in 2020, despite the pandemic, benefiting directly more than 35 million people.

The reduction of the interest rate ceiling for the consigned loan significantly contributes to the financial inclusion of INSS retirees and pensioners, who, due to their insufficient income, are often restricted in access to credit. The new ceiling rate increases people’s access to credit at a reasonable cost, without increasing the risk of delinquency, increasing competition in the market, and brings greater competition between financial institutions.

The Brazilian Social Security System is one of the most robust social protection systems globally, which brings social and economic benefits to millions of people. The consigned loan is an essential instrument for strengthening social protection for retirees and pensioners. The new ceiling rate is just another step in improving the quality of life and reducing inequalities for these vulnerable populations.

In conclusion, Lula’s decision to set the new interest rate ceiling for the consigned loan revitalizes the line of credit for INSS retirees and pensioners. It promotes financial inclusion, enhances access to credit at a reasonable cost, and contributes significantly to strengthening social protection for Brazilian society’s most vulnerable populations.