Justice cancels the new rule launched by INSS and harms the beneficiaries

In a decision affecting millions of Brazilians, the Federal Regional Court of the First District (TRF-1) suspended the INSS (National Institute of Social Security) rule that limited the contracting of salary loans for new retirees and pensioners in the first three months thereafter. Benefit release.

This measure, which was part of the INSS payroll auction rules, had the greatest impact With the aim of protecting new beneficiaries from potential violations by financial institutions. However, the court understood that the rule violated free competition and consumer rights.

Specialist Leila Cunha, collaborator with FDR, comments more on INSS’s expertise, check it out.

What was at stake?

The National Institute of Statistics has established that in the first 90 days after the benefit is granted, retirees and pensioners can only obtain credit from the bank responsible for paying the benefit. The justification was to protect new beneficiaries from aggressive offers and prevent fraud.

Why was the decision made?

According to the order O Globo newspaperthe The Brazilian Banking Association (ABBC) filed a lawsuit alleging that the action taken by INSS was anti-competitive and harmed consumers.. The entity argued that the restriction limits the supply of credit and prevents retirees and pensioners from negotiating the best terms with various financial institutions.

the TRF-1 agreed with ABBC’s arguments and recognized that INSS’s action violated free competition and consumer rights. The court’s decision concluded that this measure could lead to higher interest rates and fewer options for beneficiaries.

Thus, with the TRF-1 decision, new retirees and pensioners will be able to obtain credit from any financial institution from the first day of receiving the benefit. This measure would increase competition between banks, thus lowering interest rates and offering more choices to consumers.

The National Social Security Institute says this measure aims to protect new beneficiaries from abusive practices and ensure that they have time to choose the best credit option.