First, a brief history of the negative register (CN) and the reason for that name. It has been practiced for about two centuries in Brazil. In the centennial São Paulo Trade Association (ACSP) I learned that in the early days of the Negative Registration there were meetings of merchants to discuss the status of their debtors in the so-called square, which also means market, now the most widely used term.
With the advancement of the economy, financial institutions and information and communication technologies, meetings of this type evolved into formal registers and exchange of data. These meetings and registries were the origin of many trade associations that arose in the Country. The ACSP, for example, appeared in 1894.
It and others of the same type have formally instituted credit protection services (SPCs) where information on defaulting or defaulting debtors is registered and open to consultation with traders, financial institutions and other interested parties. For denied credit is usually denied .
The Negative Registration has problems that the positive register (Positive Registration) tries to get around. One is that it does not allow you to identify the total that a person, company or other institution already owes to its various creditors, even without being “denied”. This information is important in assessing the risk of and defaulting against future defaults.
The Negative Registration also does not allow to identify the history of the good payers, that is, those that are not negativados. As interest rates include component associated with the risk of each credit operation, the higher that risk the higher the charged rate of the debtors. That makes sense. But how do you know the good payers to favor them with lower rates? Without this knowledge, creditors end up setting interest rates taking into account, if at all, only the evaluation that alone makes of the performance of the debtor in past operations.
The evaluation can also be made by the average risk of the group in which the client is inserted and by the nature of the operation performed. For example, in payroll deductible loans, because there is a discount on the payroll of the employer, the risk is lower.
If it is for retirees, civil servants or employees of institutions with more stable employment, the risk is even lower. In such cases, debtors are credited with less interest than, for example, personal credit operations. In this, the voluntary form of payment and the average behavior of the borrowers already indicates a greater risk.
However, in all credit operations, except for this division by risk groups, good debtors are not benefited, since it is necessary to consolidate a positive register that shows the performance of each one of them. Even within this group there are better and worse payers. At the Positive Registry they receive notes that differentiate their behavior in credit operations. With this note the debtor also assesses his own status, with the Positive Registry contributing thus to the financial education of the debtor and to avoid the excess of indebtedness.
In summary, it can be said that if there is only the negative register the good debtors end up paying for the risks of the sinners. With the positive register the credit would flow even more to the good payers and smaller interest would stimulate the expansion of the credit.
In view of these advantages, in 2011 the Positive Registry was created in Brazil by Law No. 12,414. But, like other Brazilian laws, this one did not “get”. The main reason is that it determines that the enrollment in this register depends on the consent of the enrollee. More precisely, he himself has to register for the Positive Register. I learned that for a potential registered number estimated at more than a hundred million, only about 6 million registered.
The good news is that on Wednesday last week was approved in the Senate bill that amends said law particularly with regard to such membership to the Positive Registry. Instead of voluntarily joining, all persons involved in credit operations will be automatically entered. Informed of this registration, they may ask for your exclusion.
An interesting aspect of the Senate’s approval of this bill is that it came in the same month that the Nobel Prize-winning economist Richard Thaler was announced on the 3rd, whose studies and experiments contributed to further integrate psychology with in a field known as behavioral economics.
Among other things, she points out that people have limited rationality. Thus, although it was worthwhile that creditors with good credit be enrolled in the Positive Registry in the face of their advantages, such as the prospect of lower interest rates, most of them did not do so because of sloppiness, procrastination or lack of information, among other reasons.
Conclusion on the Positive Register
The bill will now go to the Chamber of Deputies, where it is expected to be approved and upgraded to the presidential sanction, given the merits of it. Maybe there will need a push, of another nature, to walk in that slow House.
It will also require another, even if approved and sanctioned: to change the ingrained culture of institutions offering credit involving their owners, directors and employees. This is so that good payers are effectively benefited by lower interest rates than those who do not care for their prestige as debtors.