Resolution CMN No. 1044 — Authorizes Credit, Financing and Investment Companies to Pass on Costs Related to Credit Granting to Borrowers

RESOLUTION NO. 001044

THE CENTRAL BANK OF BRAZIL, in accordance with Article 9 of Law No. 4,595, of December 31, 1964, makes public that the MONETARY COUNCIL, in a session held on this date, having regard to the provisions of Article 4, item VI, of the aforementioned Law,

RESOLVES:

I - Credit, financing, and investment companies shall prominently include in their financing contracts:

a) the interest rate of the operation, in its monthly and annual expressions;

b) the costs related to credit opening;

c) the effective interest rate of the operation including the costs related to credit opening, in its monthly and annual expressions;

d) the value of the Tax on Credit, Exchange, and Insurance Operations, and on Operations related to Securities and Financial Instruments (IOF); and

e) the total amount to be paid by the borrower.

II - The interest rates referred to in items "a" and "c" of item I of this Resolution shall be calculated using the exponential system, based on the schedule of installments due and with the principal being the effectively financed amount.

III - Credit, financing, and investment companies shall provide borrowers with copies of their respective financing contracts as soon as they are duly formalized.

IV - The Central Bank may adopt the measures deemed necessary for the execution of this Resolution.

V - This Resolution shall enter into force on the date of its publication, with Resolution No. 535, of April 18, 1979, and Circular No. 585, of December 5, 1980, being revoked.

Brasília-DF, August 15, 1985

Antônio Carlos Braga Lemgruber
President