Pinheiro Neto Advogados is advising the five largest banks in Brazil – Itaú Unibanco, Bradesco, Banco do Brasil, Santander and state-owned Caixa Econômica Federal – on the creation of a joint credit bureau designed to improve access to credit.
GIC, an acronym of the venture's Portuguese name, will be a database of credit information on companies and individuals. Each of the banks will have a 20% share in the joint venture. The deal closed on 14 June.
The project is expected to facilitate lending and reduce the cost of credit by providing information on consumers who pay their debts on time. Brazilians currently pay some of the highest borrowing costs among the world's developed economies. Pinheiro Neto partner João Marcelo Pacheco describes the bureau as "another major step towards a more mature business environment" in Brazil.
At the moment, the Brazilian market is served by three major credit reference agencies, SPC, Boa Vista and Cerasa. "Ultimately, it will hopefully significantly benefit the interest rate and consumer finance market in Brazil, taking advantage of the recent regulations about consumers' positive credit history," adds Pacheco. Brazil adopted legislation allowing the creation of registries of consumers with positive credit histories in 2011.
The joint venture got partial approval from Brazilian competition regulator CADE in November, after the banks agreed to facilitate competition among different agencies.
The banks are still negotiating operational and IP agreements with Lexis Nexus, which is the venture's technical partner. The new bureau is expected to start operating in 2019.
Counsel to Itaú Unibanco, Bradesco, Banco do Brasil, Santander and Caixa Econômica Federal
Pinheiro Neto Advogados - Partner João Marcelo Pacheco, counsel Sofia Toledo Piza and associate Renato Grecco