(Adds private lenders’ proposed new rules for overdraft credit)
By Carolina Mandl
SAO PAULO, Jan 17 (Reuters) - Brazil’s top lenders have proposed changes on overdraft credit lines that aim to reduce interest rates for consumers by suggesting clients who are over-using expensive credit transfer their debts to cheaper products.
The transfer of overdraft debt to other lines would not be mandatory and instead clients would have to agree on it, the sources said, asking for anonymity because the discussions are not public.
The central bank and bank lobbying group Febraban said earlier on Wednesday they were discussing changes in overdraft credit, one of the most expensive credit lines in the country, with average annual interest rates higher than 300 percent.
Febraban and the central bank did not immediately respond to requests for comment.
Last year, the central bank changed rules governing revolving credit lines offered on credit cards, limiting their use to one month. After that, banks are required to transfer debts to lower-cost credit products.
In demanding clients’ agreement on overdraft transfers, banks are trying to avoid the consumer complaints they received after the credit card regulations were changed. Some clients complained of not being able to chose the new credit products to which their debts were transferred.
Banks are discussing a rule in which they would be mandated to contact clients to offer them cheaper lines once they identify a customer is using a high percentage of his overdraft credit line for a long period.
Reuters reported last June that the central bank and private lenders were discussing changes in overdraft protection.
Additional reporting by Aluisio Alves; Writing by Tatiana Bautzer; Editing by Susan Thomas