Resolution CMN No. 4707 — Establishes conditions and procedures for financial institutions to carry out credit operations secured by receivables from payment arrangements

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 December 19, 2018, based on the provisions of Article 4, items VI and VIII, of the aforementioned Law,

R E S O L V E D:

Art. 1. This Resolution establishes conditions and procedures for the carrying out of credit operations secured by receivables from payment arrangements by financial institutions.

Art. 2. For the purposes of this Resolution, the following are considered:

I - payment arrangement receivables: credit rights relating to payment obligations of accrediting institutions or sub-accreditators to end-user payees, constituted within the scope of a post-payment payment arrangement, including credit rights of future existence with an unknown amount;

II - accrediting institutions:

a) accrediting payment institutions;

b) financial institutions that provide accreditation services; and

c) payment institutions issuing electronic money that interoperate with the payer user's payment arrangement;

III - outstanding balance of the credit operation: the value necessary for the full early settlement of the credit operation.

Art. 3. The credit operation contract with guarantee of payment arrangement receivables must specify:

I - the institution domicile for the purpose of financial settlement of the receivables for each payment arrangement, as defined in current regulation;

II - the maximum daily value of the payment arrangement receivables schedule subject to retention; and

III - the conditions for the release of financial resources to the free movement account of the end-user payee, including resources from advance operations.

§ 1. A contract granting an unconditional and unilaterally cancellable credit limit is also considered, for the purposes of this Resolution, a credit operation contract.

§ 2. The receivables schedule mentioned in item II of the caput is formed by the set of receivables resulting from transactions to be settled.

§ 3. The maximum daily retention value mentioned in item II of the caput must be less than or equal to the outstanding balance of the credit operation, throughout its validity.

Art. 4. The financial institution must ensure to the end-user payee with whom it has entered into a credit operation secured by payment arrangement receivables the free movement of financial resources resulting from advance operations of these receivables entered into with accrediting institutions and sub-accreditators, up to the daily limit corresponding to the excess of the value of the receivables schedule in relation to the maximum daily retention value mentioned in item II of the caput of Art. 3.

§ 1. Financial resources resulting from advance operations that are not freely movable may be retained by the financial institution for up to two business days, after which such resources must be released to the end-user payee or used to amortize the outstanding balance of the credit operation.

§ 2. The financial institution must carry out a documented assessment indicating potential deterioration of the credit risk of the operation prior to its option for the amortization of the outstanding balance mentioned in § 1.

§ 3. The assessment mentioned in § 2 must be carried out in accordance with the procedures provided for in current regulation regarding integrated risk management and the constitution of provisions for expected losses associated with credit risk.

Art. 5. Financial institutions must inform accrediting institutions and sub-accreditators, with the consent of the end-user payee:

I - the contracting of credit operations secured by payment arrangement receivables, including the data necessary for the financial settlement of these receivables at the institution domicile indicated in the respective contract, during its validity; and

II - the closure of credit operation contracts secured by payment arrangement receivables within two business days after the date of their closure.

Art. 6. Financial institutions must inform the end-user payee with whom they have entered into a credit operation secured by payment arrangement receivables of the value of the daily advance limit with free movement referred to in Art. 4.

Art. 7. The Central Bank of Brazil is authorized to establish the procedures necessary for compliance with the provisions of this Resolution.

Art. 8. This Resolution enters into force on January 31, 2019.

Ilan Goldfajn

President of the Central Bank of Brazil