Circular No. 2766 — Establishes the Constitution and Operation of Consortium Groups

CIRCULAR NO. 002766

Dispenses on the constitution and operation of consortium groups.

The Collegiate Board of the Central Bank of Brazil, in a session held on 02.07.97, based on art. 33 of Law No. 8.177, of 01.03.91,

D E C I D E D:

Art. 1º Establish the attached Regulation that disciplines the constitution and operation of consortium groups.

Art. 2º The provisions of arts. 21 and 22 of the attached Regulation to this Circular also apply to groups already constituted under the aegis of Ordinance No. 190, of 27.10.89, of the Ministry of Finance, and the Regulations attached to Circulars No. 2,196, of 30.06.92, 2,312, of 26.05.93, and 2,386, of 02.12.93.

Art. 3º The provisions of the attached Regulation may be applied to consortium groups already constituted, by decision of the general assembly.

Art. 4º The consortium groups referenced in the goods mentioned below are subject to the following duration periods:

I - 180 (one hundred and eighty) months, maximum, for groups referenced in real estate;

II - 100 (one hundred) months, maximum, for groups referenced in trucks, buses, tractors, road equipment, agricultural machinery and equipment, aircraft and vessels;

III - 50 (fifty) months, minimum, and 60 (sixty) months, maximum, for groups referenced in automobiles, vans, and utility vehicles;

IV - 36 (thirty-six) months, maximum, for groups referenced in tourist services;

V - 24 (twenty-four) months, minimum, and 60 (sixty) months, maximum, for consortium groups referenced in electro-electronics;

VI - 60 (sixty) months, maximum, for groups referenced in goods not mentioned in the previous items.

Sole Paragraph. The acquisition of the goods mentioned in items III and V may only be carried out by a participant of a group whose contracts have as their object goods referred to therein.

Art. 5º The provisions contained in Circular No. 2,684, 05.09.96, regarding air travel tickets, apply to groups referenced in tourist services.

Art. 6º This Circular enters into force 30 (thirty) days after the date of its publication, when Circulars No. 1,989, of 18.07.91, 2,080, of 07.11.91, 2,092, of 03.12.91, 2,096, of 05.12.91, 2,105, of 19.12.91, 2,122, of 24.01.92, 2,123, of 24.01.92, 2,196, of 30.06.92, 2,230, of 23.09.92, 2,255, of 09.12.92, 2,312, of 26.05.93, 2,342, of 15.07.93, 2,386, of 02.12.93, 2,394, of 22.12.93, 2,445, of 06.07.94, 2,627, of 05.10.95, 2,641, of 29.11.95, 2,659, of 07.02.96, 2,716, of 28.08.96, 2,754, of 07.05.97, art. 2º of Circular 2,074, of 31.10.91, arts. 5º and 6º of Circular No. 2,336, of 14.07.93, paragraph 2º of art. 2º of Circular No. 2,684, of 09.05.96, Communication No. 2,398, of 28.05.91, and Ordinances No. 190, of 27.10.89, and 028, of 05.03.90, both from the Ministry of Finance, are revoked.

Brasília, July 3, 1997

Alkimar Ribeiro Moura
Director

Regulation attached to Circular No. 2,766, of 03.07.97, which disciplines the constitution and operation of consortium groups referenced in movable goods, real estate, and tourist services.

CHAPTER I

Of the Consortium, Participants, and Object

Art. 1º Consortium is a meeting of natural and/or legal persons, in a closed group, promoted by the administrator, with the purpose of providing its members with the acquisition of a good, set of goods, or tourist service through self-financing.

Paragraph 1º The consortium member is the natural or legal person who integrates the group as the holder of a numerically identified share and assumes the obligation to contribute to the full achievement of its objectives.

Paragraph 2º The consortium administrator is the service provider with the function of managing the group's business, in accordance with the contract.

Paragraph 3º The group is a de facto society, constituted on the date of the holding of the first ordinary general assembly by consortium members gathered by the administrator, for the purposes established in the caput of this article, with a previously established duration period.

Paragraph 4º The group is represented by the administrator, actively or passively, in court or out of it, for the defense of rights and interests considered collectively, and for the execution of the consortium contract.

Paragraph 5º A group is autonomous in relation to others, possessing its own assets, which do not confuse with those of the administrator.

Paragraph 6º The interest of the group prevails over the individual interests of the consortium members.

Art. 2º The object of a consortium group governed by this Regulation may be:

I - durable movable goods or sets of durable movable goods, new, of national or foreign manufacture;

II - real estate;

III - tourist services, including air travel tickets and/or tourist packages.

Sole Paragraph. The group may only be formed having as its object goods or services of only one of the sets listed in item IX of art. 3º.

CHAPTER II

Of the Adhesion Contract

Art. 3º The adhesion contract is the instrument, signed by the consortium member and the consortium administrator, that creates an obligatory legal bond between the parties and by which the consortium member formalizes their entry into a consortium group, with the conditions of the consortium operation, as well as the rights and duties of the contracting parties, being mandatory that it contain:

I - the complete identification of the contracting parties;

II - the description of the good, set of goods, or tourist service, as well as the criterion for defining its price, which will serve as a reference for the calculation of participants' contributions and for fixing the value of the credit to be distributed in the contemplation assemblies;

III - the fixing of the administration fee;

IV - the duration period of the contract;

V - the financial obligations of the consortium member, including those that may be established as a result of:

a) contracting insurance;

b) contractual default;

c) expenses incurred with deeds, taxes, fees, and registration of guarantees provided;

d) advance payment of the administration fee;

e) purchase and delivery of the good, at the request of the consortium member, in a market different from that stated in the adhesion contract;

f) delivery, at the consortium member's request, of second copies of documents;

g) collection of bank tariffs, when payment is made through a financial institution;

h) collection of a fee on amounts not sought by consortium members or excluded, observing the provisions of art. 21;

VI - the conditions to compete for contemplation by lottery and its form, as well as the rules of contemplation by bid;

VII - the possibility or not of advance payment by a non-contemplated consortium member, if applicable, and of advance payments by a contemplated consortium member, as well as the conditions of these advances;

VIII - the right of the contemplated consortium member to dispose, for the acquisition of the good, set of goods, or tourist service, of the value of the credit distributed in the assembly of the respective contemplation, increased by the net financial earnings proportional to the period in which the value of the credit was applied;

IX - the faculty of the contemplated consortium member, observing the provisions of art. 9º, provided compatible guarantees are presented with the respective outstanding balance:

a) acquire, from a supplier or seller that best suits them:

1. motor vehicle, aircraft, vessel, agricultural machinery, and road equipment, new or used, if the adhesion contract is referenced in any of the new goods mentioned in this item;

2. any durable movable good or set of durable movable goods, new, except those referred to in the previous item, if the adhesion contract is referenced in a durable movable good or set of durable movable goods not mentioned in the previous item;

3. tourist service, if the adhesion contract is referenced in a tourist service;

b) if the adhesion contract is referenced in real estate, acquire any real estate, built or under construction, land, or opt for construction or renovation, provided it is in a municipality where the administrator operates or, if authorized by it, in a different municipality;

c) receive the credit value in cash, upon settlement of their obligations with the group, if they have not used the respective credit within 180 (one hundred and eighty) days after contemplation;

X - the procedure to be observed for the acquisition and payment of the good, set of goods, or tourist service, with the fixing of a period within which the administrator will make payment to the supplier, observing the provisions of art. 10;

XI - the guarantees that will be required from the contemplated consortium member for the acquisition of the good, set of goods, or tourist service, allowing the substitution of the guarantee, with prior authorization and responsibility of the administrator, which will justify the denial of authorization;

XII - the provisions to be observed for the transfer of rights and obligations arising from the adhesion contract;

XIII - the conditions of contractual default that may lead to the exclusion of the consortium member from the group, observing that the exclusion of a contemplated consortium member is prohibited;

XIV - the right of excluded participants, in the form of the previous item, or their successors, to the return of amounts paid, calculating the return value by applying the percentage of the value of the good, set of goods, or tourist service amortized by the excluded participant to the group's common fund and, if applicable, to the reserve fund on the value of the credit in effect on the date of exclusion, increased by the earnings from the financial application of the value thus calculated, observing that a reduction will be applied to the calculated value, the product of which will be credited to the group, referring to the discount of losses caused to the group by the excluded participant, in consonance with the provisions of paragraph 2º of art. 53 of Law No. 8.078, of 11.09.90.

Paragraph 1º The administrator will define the type of guarantee according to the nature of the good - fiduciary alienation in the case of movable goods, mortgage in the case of real estate, or guarantee break insurance in the case of tourist services -, to be required from consortium members.

Paragraph 2º The administrator may require complementary guarantees proportionally to the value of the due installments, provided they are expressly stated in the adhesion contract.

Paragraph 3º The administrator will indemnify the group in the event of eventual losses resulting from the approval of insufficient guarantees, on the date of credit use or guarantee substitution, or of the release of guarantees while the consortium member has not settled their participation in the group.

CHAPTER III

Of the Application of Group Resources

Art. 4º The resources of consortium groups, collected by administrators, must be deposited in a multiple bank with commercial portfolio, commercial bank, or savings bank and applied, from their availability, in accordance with current regulations.

Paragraph 1º The consortium administrator will perform daily control of the movement of the accounts comprising the availability of consortium groups, including bank deposits, with a view to reconciling global receipts, for analytical identification by consortium group and by contemplated consortium member whose resources related to the credit are financially applied.

Paragraph 2º The amounts received from consortium members, while not used for the purposes to which they are destined, according to contractual provision, must remain financially applied together with the resources of the group's common fund, reverting to this fund the net financial earnings from these applications.

CHAPTER IV

Of the Constitution of the Group

Art. 5º The maximum number of participants of each group, on the date of its constitution, will be the result of the multiplication of the number of months fixed for its duration by the quantity of credits provided for monthly contemplation, the group may only be called for constitution after the adhesion of at least 70% (seventy percent) of the maximum quantity of participants provided for the group.

Sole Paragraph. The administrator must require from the consortium member, upon adhesion to the group, a declaration of economic-financial situation compatible with participation in the group, without prejudice to the presentation of documents provided for in the adhesion contract regarding guarantees, upon contemplation.

Art. 6º The credits corresponding to the participation of the administrator, its partners, managers, directors, and agents with management functions in consortium groups administered must be attributed after the contemplation of all other consortium members of the group, unless all participants of the group formally decline this prerogative, not admitted if the beneficiary is the administrator.

Sole Paragraph. The provisions of this article also apply to a company linked to the administrator that participates in a group administered by it, observing the concept of linked companies provided for consortium administrators.

CHAPTER V

Of Contemplation

Art. 7º Contemplation is the attribution to the consortium member of the right to use the credit, observing contractual provisions.

Sole Paragraph. Contemplation is made exclusively through lotteries and bids, and contemplation by bid may occur only after contemplation by lottery or if this is not carried out due to insufficient resources.

Art. 8º Contemplation is conditioned on the existence of sufficient resources in the group for the acquisition of the good, set of goods, or tourist service in which the group is referenced.

Art. 9º The administrator will make the respective credit available to the contemplated consortium member until the third business day after contemplation, with the referred resources remaining deposited in a linked account, applied in consonance with the provisions of art. 4º, until the last business day prior to the date of use in the contractual form, reverting the net earnings from their financial application in favor of the contemplated consortium member.

CHAPTER VI

Of the Realization of Payment

Art. 10. The administrator will make the payment of the good, set of goods, or tourist service within a period compatible with that operated in the market for cash sales or in the form agreed upon between the contemplated consortium member and the seller or supplier of the good.

Paragraph 1º If the consortium member, after the respective contemplation, has paid with their own resources any value to acquire the good, set of goods, or tourist service, it is facultative for them to receive this value, up to the amount of the respective credit, observing contractual provisions.

Paragraph 2º The administrator may only transfer resources to third parties for payment of the good, set of goods, or tourist service of the contemplated consortium member after being notified by them of their option, guarantees satisfied, if applicable, and upon presentation of the documents related in the adhesion contract as mandatory.

Paragraph 3º If the contemplated consortium member acquires a good, set of goods, or tourist service with a price lower than the value of the respective credit, the difference must be used to pay due installments in the form established in the adhesion contract, or returned in cash to the consortium member if the debt with the group is fully settled.

Art. 11. The use of group resources, as well as the earnings from their applications, may only be made by identifying the purpose of the payment:

I - in favor of the supplier who sold the good to the contemplated consortium member, in accordance with the fiscal document attesting the operation;

II - in favor of participants, active or excluded, in the form of this Regulation;

III - in favor of the administrator, in other payments made in the form of this Regulation.

CHAPTER VII

Of Payments

Art. 12. Consortium members are obliged to pay an installment whose value will be the sum of the amounts referring to the common fund and the administration fee, observing that these values must also be identified as a percentage of the price of the good, set of goods, or tourist service referenced in the adhesion contract, and other financial obligations provided for in that contract, in the form established therein.

Paragraph 1º Contractual provision for mandatory payment of an amount destined to the reserve fund, with identification of the purpose of these resources, is facultative.

Paragraph 2º The resources of the common fund will be used for payment of the goods, sets of goods, or tourist services acquired by contemplated consortium members and, observing contractual provisions, payment of credit in cash, returns, and restitution of resources to consortium members and excluded from their respective groups.

Paragraph 3º The remuneration of the administrator for the formation, organization, and administration of the consortium group will be constituted by the resources related to the administration fee, fixed in the adhesion contract, and by those provided for in the form of art. 13 of this Regulation.

Art. 13. The values received related to default interest, limited to 1% (one percent) per month, and fines, limited to 2% (two percent) of the value of the overdue installment, if contractually provided, will be destined, in equality, to the group and the administrator.

Art. 14. It is facultative for the administrator, provided it is contractually provided, to charge the consortium member at the time of their adhesion to a consortium group:

I - the first installment;

II - the advance of resources related to the administration fee.

Sole Paragraph. If the group is not constituted within 90 (ninety) days, from the first business day following this period, the administrator will return to the adherent the values charged, increased by the net earnings from their financial application.

CHAPTER VIII

Of Maturity, Advances, Installment Differences, and Settlement

Art. 15. The administrator will keep the consortium member informed regarding the due dates of the group's installments and the holding of the respective assemblies, through a regularly distributed calendar or similar instrument.

Art. 16. Installment differences are:

I - the amounts collected less or more in relation to the price of the good, set of goods, or tourist service referenced in the contract, in effect on the date of the holding of the respective ordinary general assembly;

II - those verified in the balance of the common fund that passes from one assembly to another, resulting from alteration in the price of the good, set of goods, or tourist service referenced in the contract, occurring in the same period, in the form of the provisions of the following article.

Art. 17. Whenever the price of the good, set of goods, or tourist service referenced in the contract is altered, the amount of the common fund balance that passes from one assembly to another must be altered in the same proportion, and the corresponding value converted into a percentage of the price of the good, observing the following:

I - in the event of a price increase, any deficiency of the common fund balance will be covered by resources from the group's reserve fund or, if non-existent or insufficient, by apportionment among the group participants;

II - in the event of a price reduction, the excess of the common fund balance will accumulate for the next assembly and be compensated in the subsequent installment through apportionment.

Paragraph 1º In the occurrence of the situation treated in item I, the collection of a portion related to the administrator's remuneration on the transfers from the reserve fund and on the apportionment among group participants is due, as well as the compensation of this portion in the occurrence of the provisions of item II.

Paragraph 2º The portion of the installment referring to the reserve fund will not be subject to supplementary collection or compensation, in the occurrence of the provisions of this article.

Paragraph 3º The amounts paid by the consortium member in the form of the provisions of this article will be book-kept distinctly in their current account.

Art. 18. The value related to the installment difference will be charged or compensated until the second installment immediately following the date of its verification.

Art. 19. The outstanding balance comprises the unpaid value of the installments and installment differences, which treat, respectively, arts. 12 and 16, as well as any other unpaid financial responsibilities, provided for in the adhesion contract.

Sole paragraph. The total settlement of the outstanding balance can only be obtained by the selected consortium member whose credit has been used, observing contractual provisions, thereby ending their participation in the group, with the consequent release of the guarantees offered, if applicable.

Art. 20. The administrator shall immediately adopt the legal procedures necessary for the execution of guarantees if the selected consortium member and in possession of the asset delays payment of more than one installment.

CHAPTER IX

Of the Closure of the Group

Art. 21. Within 60 (sixty) days of the selection of all consortium members of their respective groups and the placement of credits at their disposal, the administrator, observing the following order, shall communicate:

I - to consortium members who have not used their respective credit, that the same are available for receipt in cash;

II - to excluded members, that the values related to the return of amounts paid by them are available;

III - to other consortium members, that the remaining balances in the common fund and, if applicable, in the reserve fund, are available, proportionally to the value of their respective installments paid.

Art. 22. The accounting closure of the group must be effected within a maximum period of 30 (thirty) days after the delivery of all due credits, the receipt of all debts or the exhaustion of all collection means admitted in law, and, if applicable, the return of resources due to consortium members and excluded members.

Sole paragraph. At the discretion of the administrator, the accounting closure of the consortium group operations may be effected 180 (one hundred and eighty) days after compliance with the requirements of Art. 21, observing that:

I - resources not sought by consortium members or excluded members and values pending receipt, subject to judicial collection, on the date of the accounting closure of the group, shall be transferred to the administrator who assumes the status of debtor of the beneficiaries, complying with it to observe the legal provisions that regulate the creditor/debtor relationship of the Brazilian Civil Code, and the values received must be remunerated in accordance with the current regulation applicable to consortium resources of ongoing groups;

II - the administrator shall maintain individualized control of the transferred values;

III - upon exhaustion of collection means, the administrator shall write off the unreceived values;

IV - recovered values shall be apportioned proportionally among the consortium members of the respective group, and the administrator shall, within 30 (thirty) days after receipt, communicate to the consortium members that their respective balances are available.

CHAPTER X

Of the Substitution of the Consortium Member

Art. 23. The consortium member admitted to the group in substitution for the excluded participant shall be obligated to pay the contract installments, observing the following provisions:

I - the future installments shall be collected normally, in the manner contractually provided for other participants of the group;

II - the installments and differences of overdue installments pending payment at the time of adherence of the substituting consortium member, and the installments already paid by the excluded member, shall be settled by the admitted consortium member, until the deadline provided for the closure of the group, updated in accordance with the provisions of Art. 3, item XIV.

CHAPTER XI

Of the General Assemblies

Art. 24. The ordinary general assembly, whose monthly holding is mandatory, shall be held on a day, time, and location informed by the administrator, intended for the selection of consortium members, in the contractual manner, and for attending to and providing information to them, with the administrator being obliged to keep the consortium member informed about all financial operations and credit distribution related to the respective group.

Sole paragraph. The ordinary general assembly shall be held in a single call, and the administrator may represent absentees if so provided contractually.

Art. 25. In the first ordinary general assembly of the group, the administrator:

I - shall prove the commercialization of at least 70% (seventy percent) of the group's shares;

II - shall promote the election of at least 3 (three) consortium members who, as representatives of the group and with an unpaid mandate, will assist in the supervision of the administrator's acts in the conduct of the consortium operations of the respective group and shall have access, on any date, to all statements and documents pertinent to the group's operations, and employees, partners, managers, directors, and agents with management powers of the administrator or of companies linked to it may not compete for election;

III - shall make available to consortium members who have the right to vote in the general assemblies, providing a copy whenever requested, a list containing the name and complete address of the group's consortium members, presenting, if applicable, a document formalizing the consortium member's disagreement with the disclosure of this information;

IV - shall provide all necessary information so that consortium members can decide on the type of financial application most suitable for the collected resources, as well as on the need or not for an individualized account for the group;

V - shall register in the minutes the name and address of the persons responsible for the contracted external audit and, in case of change, shall note in the minutes of the assembly following the event the data relating to the new auditor.

Sole paragraph. The consortium member may withdraw from the group due to non-compliance with the provisions of the items of this article, provided that they have not competed for selection, in which case the amounts paid by them under any title, plus the net financial earnings from their financial application, shall be returned.

Art. 26. It is incumbent upon the extraordinary general assembly of consortium members to deliberate, upon proposal of the group or the administrator, on:

I - substitution of the consortium administrator, with communication of the decision to the Central Bank of Brazil;

II - merger of the consortium group into another of the same administrator;

III - extension of the duration of the group, with suspension or not of the payment of installments for an equal period, in the occurrence of facts that unduly burden the consortium members or other events that hinder the satisfaction of their obligations;

IV - dissolution of the group:

a) in the occurrence of irregularities in the compliance with legal provisions relating to the administration of the consortium group or the clauses established in the contract;

b) in cases of exclusions in a number that compromises the selection of consortium members within the deadline established in the contract;

V - substitution of the asset or dissolution of the group, in the event of discontinuation of production of the asset referenced in the contract, considered as such any alteration in the identification of the asset referenced in the contract;

VI - any other matters of interest to the group, provided they do not conflict with the provisions of this Regulation.

Paragraph 1. In deliberations regarding the subjects treated in items III, IV, and V of this article, only the votes of the non-selected consortium members of the group shall be counted.

Paragraph 2. The administrator shall convene an extraordinary general assembly, within a maximum period of 5 (five) business days after knowledge of the alteration in the identification of the asset referenced in the adherence contract, for the deliberation provided for in item V of this article.

Paragraph 3. In extraordinary general assemblies, the proxies or legal representatives of the consortium members must have specific powers to deliberate on the subject contained in the call, and the administrator may only represent the consortium member if the latter grants specific powers for the event.

Art. 27. The extraordinary general assembly shall be convened by the administrator, who is obliged to do so within a maximum period of 5 (five) business days, counted from the date of request of at least 30% (thirty percent) of the group's consortium members, when the subject refers to those treated in items I, II, and IV of the previous article, or at least 20% (twenty percent), when the subject refers to those treated in the other items of the said article.

Art. 28. The call for the extraordinary general assembly shall be made by sending a notification letter or telegram to all participants of the group, with up to 8 (eight) business days of advance notice of its holding, counting this period including the day of the holding of the assembly and excluding the day of dispatch of the letter or telegram.

Sole paragraph. The call shall necessarily contain information regarding the day, time, and location where the assembly will be held, as well as the subjects to be deliberated.

Art. 29. In general assemblies:

I - each share of participation in the group shall give the right to one vote, participants in good standing with the payment of installments, their legal representatives or duly constituted proxies may vote;

II - they shall be installed with any number of consortium members of the group, legal representatives or duly constituted proxies, deliberations shall be taken by majority of votes of those present, not counting blank votes;

III - for the purpose of the provision of the previous item, consortium members who, complying with the conditions of item I, send their votes by letter, with Acknowledgment of Receipt (AR), provided that these votes are received by the administrator until the last business day preceding the day of the holding of the extraordinary general assembly, are considered present.

Art. 30. The administrator shall draw up minutes of the general assemblies.

CHAPTER XII

Of the Substitution of the Contract Object

Art. 31. Deliberated in an extraordinary general assembly the substitution of the asset referenced in the contract, observing the provision of item V of Art. 26, the following charging criteria shall be applied:

I - the installments of selected consortium members, future or overdue, shall remain at the previous value and shall only be updated when there is an alteration in the price of the new asset, set of assets, or tourist service, in the same proportion;

II - the installments of consortium members not yet selected shall be calculated based on the price of the new asset, set of assets, or tourist service on the date of substitution and subsequent alterations, observing that:

a) the paid installments shall be updated, on the date of substitution, according to the new price, and the resulting value shall be added to or subtracted from the installments due, depending on whether the new price is higher or lower, respectively, than originally provided in the adherence contract;

b) having paid an amount equal to or greater than the new price in effect on the date of the extraordinary general assembly, the consortium member shall have the right to acquisition after their selection exclusively by lottery, and the amount collected in excess shall be returned, regardless of selection, to the extent of the group's resource availability.

CHAPTER XIII

Of the Dissolution of the Group by Decision of Extraordinary General Assembly

Art. 32. Deliberated in the extraordinary general assembly the dissolution of the group:

I - if the group is dissolved for the reasons listed in item IV of Art. 26, the future contributions to be paid by the selected consortium members on their respective due dates, excluding the portion related to the reserve fund, shall be adjusted in accordance with the provisions of the contract;

II - if the group is dissolved for the reason present in item V of Art. 26, the procedure provided for in Art. 31, caput and item I, shall be applied, and the amounts thus collected shall be returned monthly, according to cash availability, by apportionment proportional to the amortized percentage of the asset price, in effect on the date of the extraordinary general assembly of dissolution of the group, paid by participant, first, to non-selected consortium members and, subsequently, to excluded members.

CHAPTER XIV

Of General Provisions

Art. 33. Within 60 (sixty) days after the publication of this Circular, the consortium administrator shall designate a person who will be responsible for providing all information pertinent to consortium activities to the Central Bank of Brazil and to the consortium members.

Sole paragraph. The administrator shall maintain adequate operational control systems that allow for the prompt examination of the group operations by the Central Bank of Brazil and by the representatives referred to in Art. 25, item II.

Art. 34. The difference in indemnification regarding life insurance, if any, after the outstanding balance of the consortium member has been amortized, shall be immediately delivered by the administrator to the beneficiary indicated by the shareholder or, in their absence, to their successors.

Art. 35. In the event of the repossession of the asset, judicially or extrajudicially, the administrator shall alienate it.

Paragraph 1. The resources raised shall be destined for the payment of overdue, future installments, and any unpaid obligations provided contractually.

Paragraph 2. Any positive balance that may exist shall be returned to the consortium member whose asset has been repossessed, holding them responsible for any negative balance, if any.