Resolution CMN No. 1443 - Linked Savings Account - Authorization for Real Estate Credit Societies, Savings Banks, and Savings and Loan Associations to Accept Linked Savings Deposits for Housing Credit

RESOLUTION NO. 001443

THE CENTRAL BANK OF BRAZIL, in accordance with Article 9 of Law No. 4,595 of December 31, 1964, makes public that the President of the MONETARY NATIONAL COUNCIL, by act of December 18, 1987, based on Article 2 of Decree No. 94,303 of May 1, 1987, "ad referendum" of that Council, having regard to the provisions of Article 7 of Decree-Law No. 2,291 of November 21, 1986,

RESOLVES:

I - Real estate credit societies, savings banks, and savings and loan associations are authorized to accept linked savings deposits from individuals, subject to the provisions contained in this Resolution.

II - Linked savings deposits are intended for the granting of housing credit for the acquisition of new or used property, as well as for the construction of a house on one's own land.

III - Housing credit will be granted to holders of linked savings, in the form of a credit letter, within the following minimum levels of average deposit balances:

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FINANCING VALUE (IN OTN) | MINIMUM DEPOSIT BASED ON FINANCED VALUE ------ UP TO 1,500 OTN | 10% FROM 1,501 TO 2,500 OTN | 15% FROM 2,501 TO 3,500 OTN | 20% FROM 3,501 TO 5,000 OTN | 25%

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IV - It is at the discretion of the contracting parties to establish the value of the initial deposit, the frequency of intermediate deposits, and the minimum holding period for the holder to be entitled to the credit.

V - The minimum holding period for the granting of the credit letter, to be established in the manner of the preceding item, shall not be less than 12 (twelve) months, counted from the date of the initial deposit.

VI - The regulations in force for free savings deposits from individuals apply to linked savings deposits, except those that are specific to the former.

VII - At the time of opening the linked savings account, the financial agent and the depositor must sign a specific contract which must expressly include, among others, clauses that contemplate:

a) the minimum value of deposits to be reached at the end of the contracted period;

b) the minimum deposit period;

c) the maximum period for granting financing, of 6 (six) months, counted from the end of the contractual period;

d) the minimum registration conditions for granting financing, which will depend on compliance with regulatory provisions on housing financing in the Housing Financial System;

e) the guarantee that, at the end of the agreed period, the depositor will be assured of obtaining housing financing in the agreed amount and in conformity with the regulatory provisions, at the time of granting the financing;

f) the obligation to transfer the balance of the linked savings account to a free savings account, without loss of any earnings, in the case of formal withdrawal by the depositor during the period stipulated in the contract.

VIII - If the depositor, within the period fixed in the preceding item, does not meet the pre-established registration conditions, the deposit balance will be transferred to a free savings account, without loss of earnings, and the agent will be relieved of the obligation to grant the financing.

IX - The resources arising from linked savings will have the following treatment:

a) mandatory reserve at the Central Bank of 10% (ten percent), updated by the correction indices of free savings deposits, plus interest of 3% per annum (three percent per year);

b) during the formation phase of linked savings, the resources may be applied in the operational modalities of the free tier, being computed there as extra-limit of that segment;

c) they will be remunerated at the rate of 3% per annum (three percent per year).

X - The financings resulting from linked savings contracts will all be classified as being for new properties.

XI - The conditions of the housing financing will be those in force at the time of the release of the credit.

XII - The contracting parties may establish insurance for death or permanent disability that ensures the integration of the remaining deposits or up to the coverage of the financing that would be effected.

XIII - The resources not applied in housing financings provided for in the contracts to which this Resolution refers are subject to collection in the manner that will be regulated by the Central Bank.

XIV - The Central Bank may issue norms and adopt the necessary measures for the execution of the provisions of this Resolution.

XV - This Resolution will enter into force on the date of its publication, with Resolution No. 1,298 of March 26, 1987 and Circular No. 1,177 of June 3, 1987 being revoked.

Brasília-DF, January 5, 1988

Fernando Milliet de Oliveira
President