Resolution CMN No. 2412 — Provisions on Credit Cession Operations

RESOLUTION NO. 002412

Provisions on credit cession operations.

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 August 5, 1997, considering the provisions of Article 4, item VI, of the aforementioned Law and Article 23 of Law No. 6,099 of September 12, 1974, with the wording given by Law No. 7,132 of October 26, 1983,

RESOLVES:

Art. 1. Amend Article 11 of Resolution No. 1,962 of August 27, 1992, which shall now read as follows:

"Art. 11. The cession of credits arising from loan, financing, and leasing operations to persons not part of the National Financial System may be admitted, exceptionally and on a case-by-case basis, with authorization from the Central Bank of Brazil.

"Paragraph 1. For the purposes of this article:

I - only cessions of credit in the modality without co-obligation of the ceding institution shall be admitted;

II - the repurchase of ceded credits shall not be permitted;

III - the settlement of the operations shall be made in cash.

"Paragraph 2. Any subsequent transaction involving the credits subject to cession shall not result in the return of risk, even if indirect, to the ceding institution, and the practice of an artifice that results in this situation shall be considered a serious offense, in accordance with Article 44 of Law No. 4,595 of December 31, 1964.

"Paragraph 3. The ceding institution shall include, in the first balance sheet published after the operation's approval by the Central Bank of Brazil, an explanatory note informing the accounting and cession values of the credits, as well as the patrimonial and result effects resulting from the transaction."

Art. 2. This Resolution enters into force on the date of its publication.

Brasília, August 6, 1997

Gustavo Jorge Laboissière Loyola
President