Brazil’s Audit Court Restores INSS Payroll Loans, Keeps Card Products Frozen

Overview

• TCU rapporteur Marcos Bemquerer Costa, who on Friday authorized new personal payroll-deductible loans for INSS beneficiaries, left credit-card consignado and benefit-card lines suspended pending further review.
• These loans are repaid via automatic deductions from INSS benefits paid to retirees and pensioners, a popular line for people with limited access to other credit.
• The court had halted new consignado operations on April 29 after audits of the eConsignado platform found serious flaws, including contracts without consent, loans in the names of deceased people, identity fraud, failed biometric checks, and signs of leaked personal data.
• The government appealed through the AGU, saying a broad freeze would hurt vulnerable borrowers by pushing them to costlier credit, a concern echoed by bank groups, and the monocratic decision takes immediate effect until the TCU plenary rules as technicians test the new safeguards.
• In parallel, a new decree-law (MP 1.355) phases out the card-based consignado starting in 2027 and ending by 2029, lowers the total income cap for deductions to 40% now with gradual cuts ahead, and extends the maximum term to nine years in a market of about R$100 billion that touches roughly 17 million beneficiaries.