New Civil Code changes legal interest rate
- Brazil
- 03/01/2003
- Azevedo Sette Advogados
The new Civil Code (Law # 10.406, of 01.10.02), establishes, in its article 406, that if the parties of an agreement do not set forth the interest rate that shall be applicable in the event of default, this rate shall be equivalent to the interest rate due in the event of default regarding taxes due to the National Revenue Service. This interest rate is commonly referred to as the “SELIC” rate, defined as the average rate of the financings accrued in the System of Liquidation and Custody (SELIC) for federal bonds (in accordance with Normatives BACEN n. 2.868/92 and n. 2.900/99, and art. 13 of Law # 9.065, of 06.20.95).
The applicable legislation regarding the interest rate set forth in agreements is the Usury Law (Decree # 22.626, of 04.07.33), that establishes a limit corresponding to the double of the legal rate for the interests set forth in a agreement. For such reason, starting from 11.01.03 (date in which the New Civil Code became effective), the stipulation of interest in agreements shall not, in thesis, exceed a percentage equal to the double of the SELIC rate, excepted the loan agreements with economic purposes, in which the interest rate shall not exceed the SELIC rate, in accordance with article 591 of the New Civil Code, and also those agreements executed under the national financial system.
In the same way, we understand that the New Civil Code shall not, in thesis, produce effects in the national financial system. It should be reminded that article 192 of the Federal Constitution of 1988, which establishes that the rules of said system shall be set forth by complementary law, prohibits, in its paragraph 3º, the establishment of interest rates above the limit of 12% per year, foreseeing, also, that such behavior represents excess of collection and usury practice. Such constitutional provision is in accordance with the Usury Law and with the annual rate of legal interests effective until now (6%). Note that, in principle, the law that would regulate the mentioned constitution provision would be the Usury Law. However, according to the understanding established in the Abridgement # 596 of the Supreme Court of justice - STF, the mentioned law is not applicable to public or private institutions that integrate the national financial system (in spite of the theoretically not binding character of such abridgement). Thus, in case of the mentioned Abridgement continues to be effective, during the validity of the New Civil Code, the limit rate established by the mentioned art. 406 shall also not be applicable to the financial institutions, being with no regulation article 192 of the Federal Constitution of 1988.
Notwithstanding the fact that the New Civil Code did not bring innovations to the basis of agreements executed with financial institutions, the arrival of New Civil Code shall cause several legal disputes in the near future. In order to illustrate, we may mention a long-term agreement (in which the obligations and rights last in time), in which the parties have previously fixed an inferior interest rate (in absolute terms) than the effective SELIC rate in the date of execution of such agreement. If a reduction in the SELIC rate occurred, after the execution of the agreement, and the interest rate established in the agreement started to be superior to the effective SELIC rate, it would be possible to state that the reduction of the SELIC rate would imply in the reduction of the applicable interest rate of such agreement. However, we understand that, in this example, the interest rate that was previously established in percentages that would become superior to the SELIC rate would be valid, therefore being the SELIC rate a floating rate. Considering that, the Parties would not be able to allege the theory of unpredictability, provided that this theory is connected to the idea of the existence of a total unexpected fact, which should occur after the execution of the agreement and that cause extreme burden to one of the parties. Therefore, if the requirements for the valid formation of the agreement have been duly complied with and if the legal limits for stipulation of the interests rate have been respected (also the maximum limit determined in accordance with the SELIC rate effective on the day of execution of the agreement), the interest rate established by the parties would be, in thesis, valid.
The upcoming of the new Civil Law brings, thus, relevant modifications, which must be object of a circumstantial examination by the courts, and, over all, for those who are used to the old law who will have to adjust to the new provisions arising from the new law.
