The Court of Justice of São Paulo (TJ-SP) ordered an examination into Banco Bmg to determine the criteria used to determine interest rates on personal loans. The measure was proposed by the São Paulo Public Defender’s Office after noting that there were arbitrary charges in 540 out of 567 cases analyzed against the bank between 2021 and 2023. The decision was issued by the 22nd Chamber of Private Law.
The procedure cites examples of monthly interest charges of 25.99% and 24.01% (annual 1,561.95% and 1,270.52%). In these cases, the court ordered a recalculation of the prices, recognized arbitrariness because they unjustifiably exceeded twice the average price exercised by the market and paid R$10,000 in moral damages.
In a note, Banco Bmg stated that it conducts all its operations in strict accordance with current legal and regulatory standards. “The interest rates charged by the institution are determined on the basis of technical and objective criteria, taking into account multiple risk factors and the client’s file, always with full transparency in the contracting process,” the institution states.
As for the legal procedures, the bank indicates that the lawsuit is in its initial stage, without any ruling being issued, and it is currently in the stage of presenting evidence. The institution says that it will take all appropriate procedural measures to protect its rights and prove the regularity of its procedures.
“Banco Bmg remains fully confident in the accreditation of its practices and the full clarification of the facts through competent legal channels,” the memo said.
In the first stage, the judge rejected the case. In the second case, this decision was canceled and the process returned to the investigation stage. The expertise will also evaluate loans that have not been subject to legal proceedings.
The Defender’s Office requests the payment of compensation for social damages, in a proposed amount of no less than 10% of Bmg’s net profits between August 2021 and August 2023. “The imposition of abusive interest rates contributes to raising the average market interest rate, contributes to causing the impoverishment of society and the debt of the population, and deepens social inequality,” says Public Defender Estella Waksberg Guerrini, in a memorandum.
The rapporteur of the case, Judge Roberto McCracken, highlighted in his decision the data provided by the Public Ministry of São Paulo: the default rate for Bmg clients was 16.2% in the period analyzed, while the market average was 6.3%, which, in his opinion, proves the abuse of fees.
The Public Ministry also says that by being aware of the high risks of its customers and offering loans at very high interest rates, the bank “admits to subverting all the values that should guide relations with consumers, and encouraging the over-indebtedness of the population, instead of combating it.”
Discussions about Bmg rates have always existed, but the general civil lawsuit gains more weight because it is a class action, says Social Security lawyer Romulo Saraiva. Saraiva says that, unlike individual actions, which only benefit those who have appealed to the courts, a potential conviction for social harm can have broader implications.