The Brazilian government modernized its credit laws and instituted the New Legal Framework for Guarantees

The New Framework creates a specialized guarantee management service to make the use of guarantees for the granting of credits more efficient, simple and safe, contributing to lower interest rates and increased competition.

 

It also improved the rules for guaranteeing immovable and movable assets and improved fiduciary alienation. The mortgage institute also put an end to the impossibility of contracting new credits linked to the same real estate guarantee given in fiduciary alienation, even with the same creditor.

 

The service will be operated by the Guarantee Management Institutions, private entities whose operation will be authorized by the Central Bank, based on criteria defined by the National Monetary Committee.