Resolution CMN No. 1631 — Low Regulation for the Opening and Movement of Demand Deposit Accounts and Authorizes the Central Bank of Brazil to Issue Norms

RESOLUTION NO. 001631

THE CENTRAL BANK OF BRAZIL, in accordance with Article 9 of Law No. 4,595, of December 31, 1964, makes public that the National Monetary Council, in a session held on August 23, 1989, in view of the provisions of Article 4, item VIII, of the aforementioned Law, and of Article 69 of Law No. 7,357, of September 2, 1985,

RESOLVES:

I - To issue the attached Regulation for the opening and movement of demand deposit accounts.

II - To authorize the Central Bank of Brazil to issue norms and adopt measures deemed necessary for the execution of this Resolution.

III - Non-compliance with the provisions of this Resolution will subject financial institutions and their respective administrators to the penalties provided for in Article 44 of Law No. 4,595, of December 31, 1964.

IV - This Resolution shall enter into force 180 (one hundred and eighty) days after the date of its publication, at which time Circulars Nos. 559, 597, and 868, of July 29, 1980, December 31, 1980, and July 19, 1984, as well as DEORB Communications Nos. 006, 008, 010, and 013, of January 16, 1981, August 25, 1981, December 29, 1981, and July 8, 1986, shall be revoked.

Brasília-DF, August 24, 1989

Wadico Waldir Bucchi
Interim President

ATTACHED REGULATION TO RESOLUTION NO. 1,631, OF AUGUST 24, 1989

CHAPTER I

On the opening, movement, and closure of accounts

Art. 1. For the opening of a demand deposit account, complete identification of the depositor is mandatory.

Art. 2. In the provision of checkbooks, the following must be observed:

a) Delivery is prohibited if the account holder or their proxy appears in the Register of Issuers of Bounced Checks (CCF) referred to in Chapter III of this Regulation or if they have registration restrictions;

b) The first checkbook may only be delivered with express authorization from the branch administration.

Art. 3. Before the provision of the first checkbook or when, for any reason, the holder is prevented from receiving it, the account may only be operated by means of a nominative individual check payable to the issuer themselves, without charge to the account holder, or by electronic payment means.

Art. 4. It is at the discretion of each establishment to open, maintain, or close a demand deposit account whose holder appears or has appeared in the Register of Issuers of Bounced Checks (CCF), observing the provisions of Article 2, and the Central Bank of Brazil may determine its closure.

Art. 5. An account opened for the credit of salaries, pensions, or retirement benefits cannot be closed.

CHAPTER II

On the return of checks

Art. 6. A check may be returned for one of the following classified reasons:

CHECK WITHOUT FUNDS PROVISION

11 - Bounced check - 1st presentation;

12 - Bounced check - 2nd presentation;

13 - Account closed;

14 - Fraudulent practice;

IMPEIMENTANCE TO PAYMENT

21 - Counter-order (or revocation) or opposition (or stay) of payment;

22 - Discrepancy or insufficiency of signature;

23 - Checks issued by entities and bodies of the direct and indirect federal public administration, in disagreement with the requirements contained in Article 74, Paragraph 2, of Decree-Law No. 200, of February 25, 1967;

24 - Judicial block or determination by the Central Bank of Brazil;

CHECK WITH IRREGULARITY

31 - Formal error (no date of issue, month written numerically, absence of signature, value not registered in words);

32 - Absence or irregularity of the clearing stamp;

33 - Endorsement discrepancy;

34 - Check presented by a banking establishment other than the one indicated in the black crossing, without the mandate endorsement;

35 - Forged check, issued without prior control or responsibility of the banking establishment ("universal check"), or with alteration of the drawee place;

IMPROPER PRESENTATION

41 - Check presented to a bank other than the drawee;

42 - Check not clearable in the session or clearing system in which it was presented;

43 - Check not subject to re-presentation, returned for reasons 12, 13, 14, 21, 22, and 23;

44 - Expired check.

Art. 7. Reason 12 is characterized when the re-presentation occurs on a date different from the occurrence of reason 11.

Art. 8. Reason 14, fraudulent practice, to be used exclusively by banks that assume the "Commitment of Prompt Acceptance" referred to in Article 13, is characterized when:

a) more than 3 (three) bounced checks with a value up to 1/4 (one quarter) of the MVR, drawn against the same deposit account, are presented on the same day; or

b) 3 (three) or more bounced checks with a value up to 1/4 (one quarter) of the MVR have already been paid on different dates, due to the aforementioned "Commitment".

Art. 9. Reason 22 may only be alleged for checks with available funds.

Art. 10. In returns for reasons 12 to 14, banks are responsible for including the account holder in the Register of Issuers of Bounced Checks (CCF).

Art. 11. The check is payable on demand, considering any mention to the contrary as unwritten, and must be presented for payment, starting from the day of issuance, within a period of 30 (thirty) days, when issued in the place where the drawee establishment is located, and 60 (sixty) days, when issued in a different place.

Art. 12. After 6 (six) months from the period provided in the previous article, the check shall be returned for reason 44.

Art. 13. Banks may assume, with registration at the Central Bank of Brazil - Department of Banking Organization and Authorizations (DEORB), "Commitment of Prompt Acceptance", revocable at any time, by which they commit not to return checks with a value up to 1/4 (one quarter) of the MVR for reasons 11 and 12, except when reason 14 occurs.

Art. 14. At the time of returning the document to the Clearing House, a service fee of 3% (three percent) of the MVR shall be charged by the executor of the Check and Other Papers Clearing Service:

a) from the drawee bank, which may transfer it to the account holder, when the check is returned for any reasons from 11 to 24;

b) from the presenting bank, for reasons 31 to 44, transferable to the depositor only for reason 31.

CHAPTER III

On the Register of Issuers of Bounced Checks (CCF)

Art. 15. The Register of Issuers of Bounced Checks (CCF) will cover all places in the Country, distributed according to the jurisdiction published by the executor, and will contain the following data:

a) name of the account holder;

b) CPF or CGC, or, in exempt cases, the type and number of the identification document;

c) code number of the bank and branch that commanded the inclusion;

d) fortnight, month, and year of the last occurrence;

e) quantity of occurrences included in the CCF, per depositor, bank, and branch.

Art. 16. The inclusions and exclusions from the CCF will be published by the executor of the Check and Other Papers Clearing Service until the last day of the subsequent fortnight. Monthly, the occurrences will be consolidated and published until the last day of the following month. These deadlines may be reduced by the Central Bank of Brazil, hearing the executor, with a view to speeding up the publication of the Register of Issuers of Bounced Checks (CCF).

Art. 17. The executor will provide, free of charge, to each financial institution registered in the Check and Other Papers Clearing Service a copy of the CCF in the form of microfiches or magnetic media. Extra copies may be provided at cost price, upon request to the executor.

Art. 18. The executor, at a price and operational conditions established in a specific agreement, may provide copies of the CCF to other financial institutions and to entities that carry out credit protection activities.

Art. 19. The occurrences will be excluded from the Register of Issuers of Bounced Checks:

a) automatically, after 5 (five) years from the last inclusion;

b) at the request of the drawee establishment, or by the initiative of the executor itself, if the inclusion was commanded by proven error, in which case the institution, as soon as it becomes aware of the fact, must command the exclusion from the CCF, without charge to the client;

c) at any time, at the request of the drawee establishment, provided that the client proves to it the payment of the check that gave rise to the occurrence, and, in cases of fraudulent practice, regularizes the debt;

d) by determination of the Central Bank of Brazil.

Art. 20. A service fee, corresponding to 1/2 (half) MVR per occurrence, shall be charged from banking establishments by the executor and transferred to the Central Bank of Brazil:

a) upon request for exclusion, when it concerns an occurrence included by a bank that assumed the "Commitment of Prompt Acceptance", admitted, exclusively in the case provided for in item "c" of Article 19, the reimbursement to the account holder;

b) at the time of inclusion, when this is commanded by a bank that did not assume the "Commitment of Prompt Acceptance", also admitted in the case provided for in item "c" of Article 19, the reimbursement to the account holder;

c) when, for any reason, the command for inclusion is rejected and not renewed within a maximum period of 30 (thirty) days, for each occurrence.

CHAPTER IV

On the Fund for the Promotion of the Adequate Use of Checks

Art. 21. The service fee referred to in Article 20 will revert in favor of a fund, managed by the Central Bank of Brazil - Department of Banking Organization and Authorizations (DEORB), named FUNCHEQUE - FUND FOR THE PROMOTION OF THE ADEQUATE USE OF CHECKS, intended to sponsor the dissemination of the correct use of checks.

CHAPTER V

On Transitional Provisions

Art. 22. The occurrences included in the current Register of Issuers of Bounced Checks (CCF) up to the date of entry into force of this Resolution shall be excluded:

a) automatically, after 2 (two) years have elapsed, counted from the fortnight of the last inclusion. However, in the event of inclusion of a new occurrence in accordance with these instructions, this period is prejudiced, prevailing the 5 (five) year period provided for in item "a" of Article 19;

b) at the request of the drawee bank, observing the provisions of items "b" and "c" of Article 19, including when it concerns the old criterion of contumacy; or

c) by determination of the Central Bank of Brazil.

Art. 23. The payment of the fee referred to in Article 20 is waived regarding the exclusions dealt with in items "b" and "c" of Article 22, and the drawee establishment may charge the account holder a service fee corresponding to 1/2 (half) MVR, provided that it has not passed it on at the time of the inclusion of the occurrence in the CCF.

CHAPTER VI

On Final Provisions

Art. 24. The drawee bank is obliged to provide the holder of the check returned for lack of funds with all information that allows the identification and location of the issuer.

Art. 25. For the purposes of this Regulation, the Reference Maximum Value (MVR) shall always be rounded up to the unit of new cruzado, when its value contains cents.