Brazil's banks and Rio Grande do Norte government clash over consigned loan debts

Banco do Brasil halted the offering of consigned loans to public servants, retirees and pensioners in Rio Grande do Norte, citing unpaid repayments exceeding R$ 337 million. The bank sent a notice demanding an immediate transfer of R$ 377.414.056,07 to cover the outstanding amounts, while the state government acknowledged the debt and said it was working to settle it before the end of the fiscal year.

In a separate development, Brazil’s Superior Tribunal de Justiça issued rulings that restrict consigned‑loan contracts for INSS retirees. The court deemed home‑visit sales practices by bank agents abusive and invalidated digital contracts signed by illiterate beneficiaries. The decisions affect roughly 3.4 million retirees who have taken out loans totalling R$ 22.7 billion, prompting banking associations to warn of reduced credit access for pensioners.