Brazilian Supreme Court declares the constitutionality of the extrajudicial execution of guarantees by banks in light of the due process clause

Revista dos Tribunais | vol. 1059/2024 | p. 257 – 268 | Jan / 2024 DTR\2023\10737

Paulo Iotti
Doctor and Master in Constitutional Law from the Toledo Teaching Institution. Specialist in Constitutional Law from the Pontifícia Universidade Católica de São Paulo. Law degree from the Instituto Presbiteriano Mackenzie. University professor. Human rights lawyer.

José Luiz Ragazzi
PhD in civil procedural law from the Pontifícia Universidade Católica de São Paulo. Professor of the Master’s and Doctorate Programs at the Instituição Toledo de Ensino – ITE/Bauru. Lawyer. jragazzi@tortoromr.com.br

The Federal Supreme Court has declared the constitutionality of the law that allows financial institutions to repossess properties that they have financed in the event of default on fiduciary sale contracts, on the grounds that it does not violate the principle of formal and substantive due process of law (art. 5, LIV, of the CF/88 (LGL\1988\3)), on the grounds that the debtor has the right to take legal action in the event of illegalities or unconstitutionalities in the specific procedure. The decision was made in the judgment of RE/RG 860.631 (Theme 982), which approved the following Thesis: “The procedure of Law 9.514/1997 (LGL\1997\95) for the extrajudicial enforcement of a fiduciary sale clause is constitutional, given its compatibility with the procedural guarantees provided for in the Federal Constitution.”

From the perspective of formal or procedural due process, the STF’s decision is unquestionable, because the fundamental right to an adversarial hearing is not limited to its most famous version, of the right to a bilateral hearing before a decision affecting one’s freedom or property (prior adversarial hearing).This is true even in the contemporary paradigm that prohibits surprise decisions, in the sense that “the principle of adversarial proceedings has been given a new meaning, coming to be understood as a right to participate in the construction of the decision, in the form of a procedural guarantee of influence and non-surprise in the formation of decisions”, whereby “it can no longer be analyzed, as mentioned in the previous section, merely as a formal guarantee of bilateral hearings, but rather as a possibility of influence (Einwirkungsmöglichkeit) on the development of the process and on the formation of rational decisions.”¹

After all, as is well known in procedural doctrine, the contradictory has an immanent limit² or admits a constitutionally valid restriction³ that allows a decision to be taken without hearing the opposing party, a decision is taken that affects even their freedom (think of precautionary arrests) and especially their assets (through precautionary measures and advances in guardianship) and only then be heard. If this happens in the same process (judicial or administrative), we have the figure of deferred adversarial proceedings. In the event that the party can only manifest itself through a new lawsuit, we have the figure of the eventual adversarial proceeding.⁴ This last hypothesis is enshrined in Law 9.514/1997 (LGL\1997\95) in the fiduciary alienation in guarantee of real estate, for the specific case of real estate subject to financing in which the debtor defaults.

In the same vein, the 1st Panel of the STF had already declared the constitutionality of Decree-Law 70/1966 (LGL\1966\16) (RE 223.075/DF, j. 23.06.1998;⁵ RE 287.453/RS, rel. Min.

Moreira Alves, j. 18.09.2001;⁶ and RE 408.224/SE-AgR, rel. Min. Sepúlveda Pertence, j. 03.08.2007⁷) and art. 3 of Decree-Law 966/1969 (RE 382.928/MG, j. 20.09.2020),⁸ which also allowed repossession without prior judicial cognizance (even through the then precautionary search and seizure action) for such collateral in relation to real estate, which has also had its constitutionality declared by the STF. In the leading case (RE 223.075/DF), based on an opinion by Arnold Wald, the thesis of a violation of the principles of the prohibition of self-defense, the inafastability of jurisdiction, natural judgment, adversarial proceedings, broad defense and due process of law was rejected, on the grounds that there was no suppression of judicial control, but rather a shifting of the moment for the judiciary to intervene, which was understood not to violate the right of defense, because the debtor’s defense was displaced to the last act of the execution [in the logic of the eventual adversarial proceeding, cf. supra]. It was considered legitimate to reverse the traditional order, which placed the fear of injury to the debtor party’s rights at the forefront, requiring the creditor party to go to court in order to promote enforcement.In the specific case of fiduciary alienation in guarantee , given the peculiarity of its legal nature (cf. infra), the right to satisfaction of the credit is placed in the foreground, with judicial intervention at the request of the debtor party if it points out illegalities, unconstitutionalities (related to the specific case) or arbitrariness in general, which has been deemed fit to repair any damage to individual rights suffered. This was considered to be the case because it is a system to which legislation aims to provide special security, due to its importance to the nation (the financial system). It was held that the principle of [formal] equality had not been violated, because “everyone who has obtained a loan in the system is subject to it”. It was also claimed that there had been no violation of the constitutional clause of reserved jurisdiction because the financial agent performs merely administrative functions, not jurisdictional ones, in the expropriatory acts in question, authorized by law, so that the doctrine that preaches extrajudicial foreclosure was honored.”The Judiciary would be reserved only for the assessment and judgment of challenges in the form of embargoes, which would preserve the principle of the monopoly of the Judiciary”. With this in mind, the São Paulo Court of Justice ruled that:

“In fact, if the creditor fails to act, the debtor can use judicial control to challenge and even annul the regularity of the procedure, both in relation to the notification of default and the registration or sale at auction, in respect of the principle of due process of law, non-appealability and access to justice.This is in respect of the principle of due process of law, the inaffordability of judicial protection and access to justice. However, there can be no question of illegality or unconstitutionality.”

(TJSP, Apel. Civ. 1035335-02.2019.8.26.0001, 26th Chamber. Dir. Priv., rel. Des. Antonio Nascimento, j. 19.08.2021).

It should be noted that the legislation requires the debtor to be constituted in default by the financial institution, with extrajudicial notification demonstrably received to that effect, with the opportunity to purge the default (payment of the debt)where proof of default is a requirement for the validity of the procedure (Precedent 72 of the STJ, on movable property subject to the aforementioned DL 911/1969) and case law, going beyond the letter of the law, points out that it can take place up to the signing of the auction notice resulting from a judicial auction,⁹ a protective understanding for debtors.¹⁰ On the other hand, if the debtor party believes that the collection is being made in excessive or abusive/illegal amounts for some legal reason, understood by the STJ case law as one that, exceptionally, according to the peculiarities of the specific case, proves to be abusive,¹¹ they can file a lawsuit to demonstrate this, with the burden of proof of the contractual relationship imposed by case law on the financial institution, otherwise it will be presumed that contractual interest was not agreed and legal interest will be applied.¹²

As you can see, there are many matters available to the party to whom default is imputed (relative, in the case of default, or absolute) and if the courts agree, they will declare the repossession of the property null and void, with the duty to restore the previous situation (status quo ante) and the possible possibility of compensation for material and moral damages, if the causal link between the damages and the financial institution’s conduct is proven, there will be no compensation in re ipsa, i.e. for the mere practice of the conduct, at least given the notorious jurisprudential understanding according to which “mere breach of contract” does not constitute compensable moral damage.

Therefore, since the law recognizes these procedural guarantees in favor of the debtor party and allows them to challenge the conduct of the financial institution by judicial action (eventual contradictory), the STF considered this legally instituted option for financial institutions to be respectful of the principles of reasonableness (non-arbitrariness) and proportionality (adequacy and necessity for the protection of a legal good worthy of protection and strict proportionality, on generating greater social gains than losses and not causing a sacrifice to the essential core of the right of the other party, which is the object of apparent tension with the right to which precedence has been given in the light of the specific circumstances in question, must not be sacrificed.)

In other words, our Supreme Court expressly honored as a legitimate state purpose the facilitation of the repossession of credit by financial institutions in the event of default, as something necessary to make credit cheaper and thus reduce inflation and benefit people in general by reducing bank interest rates in general. And for this reason, our Supreme Court has also found respect for substantive due process, which encompasses the aforementioned principles of reasonableness and proportionality and not formal procedures (the object of formal or procedural due process).

It is important to note that this repossession occurs in the specific area of financing subject to fiduciary sale as collateral. In a nutshell, this technical-legal institute aims to provide a greater guarantee to those who lend money to others by transferring ownership of the thing bought with the money lent to the creditor, although the thing remains in the debtor’s (direct) possession for them to enjoy, through the institute of resolvable ownership. This is a specific type of property because it is not perpetual like property in general, because it is resolved by the legal duty to transfer it to another person, in this case the debtor, when a resolutive condition is reached, namely full payment of the debt. The idea is that the person who took out the loan and used it to pay off the asset already holds it in their name and exercises all rights of use, enjoyment and enjoyment over it (except alienation, which will depend on authorization from the creditor), obliging them to the loan installment must be paid in installments paid regularly in contractual form (normally, monthly) so that, in the event of absolute default (which exceeds the relative default that characterizes the default, because it has not been purged in accordance with the law), the asset has its direct possession also transferred to the creditor party, who already has its formal ownership, although resolvable.

Civil law doctrine teaches that resolvable ownership was created in order to speed up the recovery of borrowed credit in cases of default in relation to the classic rights in rem (guarantee over other people’s property) (pledge, mortgage and antichresis), because, in these cases, the thing given as collateral remains in the name of the debtor, which, in the event of default, generates costs and delays for the property to be transferred to the creditor.¹³ With resolvable ownership, the property is already in the name of the financial institution, which can therefore fully dispose of it in the event of default (it is an abuse of rights as an unlawful act to dispose of the property).This already facilitates the repossession of loans in this case. Therefore, the extrajudicial repossession of the property that is in the direct possession of the debtor by the creditor (who has indirect possession of it), in the event of default, is only a logical consequence of the institute of resolvable ownership, something that was taken into account by the STF.

Of course, the Supreme Court has allowed financial institutions to be treated differently from people in general, so the issue must also be analyzed in the light of the principle of material equality, which allows people to be treated unequally to the extent of their inequality. According to Celso Antônio Bandeira de Mello’s classic lesson, different legal treatments are only constitutional if they are aimed at indeterminate and indeterminable people at the time of their choice (an aspect of material legality, where material laws must be general and abstract and not protect specific people).It must be a logical-rational consequence of the differentiating criterion erected (prohibiting legal differentiations due to mere prejudice or whims of the legislature) and must also be consistent with constitutionally enshrined principles, rules and values.¹⁴ In short, it is required that the legal differentiation makes sense, which Alexy explains is a problem of valuation, which creates an argumentative burden for those who argue for the validity of the unequal treatment by demonstrating that there is a sufficient reason for it. This means that “if there is no sufficient reason for the permissibility of unequal treatment, then equal treatment is mandatory”.¹⁵

On the subject, in addition to being legislation that evidently covers indeterminate and indeterminable persons (any financial institution), without protecting any specific person (individual or legal), the Supreme Court’s reasoning understood that there was no alleged violation of formal and substantive due process of law invoked in the appeal and, furthermore, seems to presume that there is logical-rational basis for this prerogative instituted in favor of financial institutions that justifies it in view of the material aspect of the principle of isonomy due to the fact that it is a measure capable of generating a reduction in the cost of financing in the country, with notorious systemic effects on the financial market and even greater gains for consumers in general. After all, in 2023, Brazil ranks very poorly in the world ranking of credit recovery (no. 60 out of 64 countries),¹⁶ because, according to 2019 data, for every dollar lent, the country recovers only US$ 0.13 (thirteen cents on the dollar), or a mere 13%, while the world average is US$ 0.34 (thirty-four cents on the dollar), or 34%. This is one of the factors that makes Brazil’s banking spread among the highest in the world, as it increases the cost of doing business in Brazil.¹⁷

As such, I believe that the legislation in question does not violate the essential core of the fundamental guarantee of due process of law, adversarial proceedings, full defense and access to access to the courts for people who are debtors on loans subject to fiduciary alienation in guarantee, because they can go to court, in the logic of the eventual advers arial process (cf. supra), to demonstrate illegalities and abuses in general that are occurring in their specific case.

For this reason, the law was declared constitutional by the STF, which did not innovate at all, since the innovation came from Law 9.514/1997 (LGL\1997\95) for real estate financing and, before that, from DL 966/1969 and DL 70/1966 (cf. above) for furniture financing. While the respectable thesis that this procedure was unconstitutional was not accepted by the judiciary in general, except for isolated decisions, the decision maintains the stability and coherence of case law, as required by article 926 of the CPC/2015 (LGL\2015\1656). At the same time, it brought relevant grounds in favor of the integrity of this jurisprudence with the constitutional order, as also required by the aforementioned legal provision, as a realization of the principle of legal certainty, which notoriously imposes the duty to maintain predictability in legal-social relations.

So, allowing for a more general reflection, the decision can certainly not be accused of “judicial activism” in the pejorative sense of the expression, of acting unconstitutionally, outside the scope of the Court’s powers, usurping the prerogative of other Powers. There was no judicial activism in the constitutionally valid sense of maximalist concretization of principles (“vague” normative texts, which do not foresee hypotheses of incidence in the form of a syllogism), because there was no normative lacuna filled by the Court, but rather validation of the political choice made by the Legislature, by the deference imposed by the principle of presumption of constitutionality, which imposes that a law should only be invalidated if its profound arbitrariness or in clear violation of constitutional norms. Apparently, the legal community needs to realize that the fact of disagreeing with a Supreme Court decision does not necessarily mean that it can be accused of having “usurped” the powers of other branches of government or simply “legislated” illegitimately, not least because of its constitutionally recognized authority as the final interpreter and thus primary guardian of the Constitution (art. 102 of the CF/1988 (LGL\1988\3)).

As a human science (one of evaluation and understanding, and not one of observation like the natural sciences), the interpretation of law is the subject of profound disagreements between rational people in good faith. This is even true when it comes to defining the only correct answer, as the one that is most consistent with the principles and rules in force in the country, in a judgment of probability, according to Ronald Dworkin’s classic lesson.18 Of course, it is legitimate to harshly criticize any Supreme Court decisions (such as this one) and argue that it has, in fact, gone against the Constitution, but one cannot merely disagree with the Supreme Court’s interpretation as the primary guardian of the Constitution (art. 102 of CF/1988 (LGL\1988\3)) and even of the Judiciary in general, accuse the decision with which one disagrees of “judicial activism” in the pejorative sense of acting unconstitutionally, because judicial activism cannot become an expression without any concrete meaning to be used against any decision with which one disagrees. One can defend the evolution of jurisprudence in another direction in future judgments, but respect for the institutional authority of the Judiciary demands respect for the Court’s legal judgments, even when it comes to criticizing them (because authority is not to be confused with authoritarianism). Institutional respect is shown in disagreements by facing up to the Court’s grounds (something that is very rare in Brazil), without criticizing the decision through strawmen, and by admitting that the issue is controversial when there is no rule that defines by syllogism what the objective will of the Constitution is on the subject – and this even for the thesis of the only correct answer, which correctly understood means the answer with the highest probability of being the one that best respects the normative system in force. After all, the search for the right answer is an obligation of means, not of result.¹⁹

In short, the STF decided on the abstract constitutionality of the legal procedure for repossession of financed properties in the specific factual context of default by the debtor who was not purged in the manner prescribed by law as a prior requirement for repossession, but this obviously does not prevent the party can prove that it is not, in fact, a debtor or that it is being charged an incorrect amount (etc.), through diffuse control of constitutionality and legality in general, in light of not only purely legal questions (for example, whether there was undue accumulation of interest with funds of equivalent nature, whether there was disrespect for the contractual and legal parameters used by the financial institution, etc.), but also questions of fact (for example, whether the delay or default actually occurred, whether the calculations presented by the financial institution are correct according to contractual and legal parameters regarding their mathematical accuracy, etc.).

---

1 NUNES, Dierle. BAHIA, Alexandre. PEDRON, Flávio Quinaud. Teoria geral do processo. Salvador: JusPodivm, 2020. p. 318 e 327. No mesmo sentido: MARINONI, Luiz Guilherme. ARENHARDT, Sérgio Cruz. Mitidiero, Daniel. Civil Procedure Course, V. 1, SP: RT, 2016. p. 504-505: “To the binomial knowledge-reaction has been added the idea of full participation as the hard core of the right to adversarial proceedings”, both for factual and legal issues, whereby “the judicial pronouncement is supported only by elements on which the parties have had the opportunity to express themselves means avoiding the surprise decision in the process”.

2 .JUNIOR, Nelson Nery. NERY, Rosa Maria de Andrade. Constituição Federal comentada. 7. ed. São Paulo: Ed. RT, 2019. p. 301: “the actual granting of an injunction does not constitute an offense, but rather an immanent limitation of the adversarial principle in civil proceedings (Grinover, Princ., 94ff; Nery, Princípios, n. 26, p. 281ff; Stein-Jonas-Schumann. Kommentar, v. I, Introdução, n. 504, p. 279). Once the defendant has been summoned, he will have the opportunity to contest the decision and present his defense […] does not mean an offense to the adversarial process, since the decision is provisional and revocable”, whereby (we would add), after the injunction or preliminary injunction has been served or summons has been issued, the defendant can exercise their right to participate in and influence the construction of the decision, including being able to have the decision reconsidered if they bring factual and legal elements to support it.

3 MARINONI, Luiz Guilherme. ARENHARDT, Sérgio Cruz. Mitidiero, Daniel. Curso de Processo Civil . São Paulo: Ed. RT, 2016. v. 1. p. 379: “Restrictive rules are allowed not only when constitutional rules expressly authorize them – through expressions such as ‘in the form of the law’, ‘under the terms of the law’ etc. -, but also when the fundamental right clashes with other fundamental rights, where there is an ‘immanent restriction’, recommended by the need to harmonize fundamental rights [cf. Canotilho] […] It is permissible to affect legal positions located within the ‘scope of protection’ of the right of defense, as long as it is based on the fundamental right of action. This is what happens, for example, in the case of preliminary injunctions. If a right, due to the particularities of the specific situation, requires prompt judicial protection so as not to suffer irreparable damage or damage that would be difficult to repair, it is rational and legitimate to admit, given the likelihood of the right asserted by the plaintiff, the granting of judicial relief before giving the defendant the opportunity to fully exercise his right of defense (art. 9, sole paragraph, I). […] Thus, there is no violation of the essential core of the right of defense when the full exercise of the right of defense is postponed [sic] to a moment after the relief is granted (art. 9, sole paragraph, I). In this case, although the defendant’s legal sphere is affected by the effects of the decision, the defendant’s right of defense is not eliminated, nor is the possibility of demonstrating to the judge the non-existence of the right that was supposed to exist when the preliminary injunction was granted.”

4 MARINONI, Luiz Guilherme. ARENHARDT, Sérgio Cruz. Mitidiero, Daniel. Curso de processo civil. São Paulo: Ed. RT, 2016. v. 1. p. 506: “In general, the adversarial process is prior. ‘Audiatur et altera pars’. First, the judge hears both sides and then decides. It may happen, however, that the court has to provisionally decide a certain issue during the course of the proceedings before hearing one of the parties (‘inaudita altera pars’). This is what happens, for example, when the judge grants interim relief. The adversarial process is then postponed – deferred – until after the injunction has been granted. The restriction on the adversarial process is due to the need for adequate and effective judicial protection. There is no unconstitutionality in postponing the adversarial process – by the way, the legislator expressly recognizes this (art. 9, sole paragraph, I). If it is necessary to grant a preliminary injunction before hearing the defendant, this is necessary as a result of the right to adequate protection of rights. It is not, therefore, an exceptional measure: once the assumptions have been met, the judge has the duty to anticipate the relief. Nor is there any unconstitutionality in the eventual advers arial proceeding – which is the one that takes place in another process in the event that the interested party files a lawsuit to expand or exhaust the cognition. This is the classic example of partial cognition and summary cognition. The so-called possessory actions (arts. 554 et seq.) are a good illustration of the point regarding partial cognition. Possessory protection is independent of ownership. Discussion of ownership is prohibited in possession proceedings (art. 557). Those interested in debating the issue have the onus of bringing an action to ensure that there is an adversarial debate on the point. Otherwise, the discussion is restricted and it is not possible to discuss the issue reserved for the eventuality of another process.” Emphasis added.

5 .”Extrajudicial enforcement. Decree-Law 70/66 (LGL\1966\16). Constitutionality. The aforementioned law is compatible with the Charter of the Republic, since, in addition to providing a judicial control phase, albeit a later one, for the sale of the property that is the object of the guarantee by the fiduciary agent, it does not prevent any illegality perpetrated in the course of the procedure from being repressed, immediately, by the appropriate procedural means. Appeal known and upheld” STF, 1st Panel, RE 223.075/DF, rel.

Min. Ilmar Galvão, j. 23.06.1998.

6 .”~judgment: – Extrajudicial enforcement. Reception by the 1988 Constitution of Decree-Law 70/66 (LGL\1966\16). – This Court, in various precedents (for example, in RREE 148.872, 223.075 and 240.361), has ruled that Decree-Law no. 70/66 (LGL\1966\16) is compatible with the current Constitution and does not clash with the provisions of Article 5 (XXXV), (LIV) and (LV) thereof, which is why it was accepted by it. The judgment under appeal did not diverge from this orientation. – On the other hand, the issue of Article 5, XXII of the Magna Carta was not questioned (Precedents 282 and 356). Extraordinary appeal dismissed”.

7 .”Judgment: 1. Extrajudicial enforcement: the Court’s view is firm that Decree-Law 70/66 (LGL\1966\16) is compatible with the current Constitution. (cf. RE 287453, Moreira, DJ 26.10.2001; RE 223075, Galvão, DJ 23.06.98). 2. Interlocutory appeal: innovation of grounds: inadmissibility”.

8 .”Constitutional Law and Civil Law. Fiduciary alienation. Search and seizure of assets. Article 3 of Decree-Law 911/69 (LGL\1969\31). Constitutionality. Extraordinary Appeal granted to set aside the ex officio dismissal of the case and order the return of the case file to the Court of origin for further judgment of the interlocutory appeal. The following thesis was established: ‘Article 3 of Decree-Law 911/69 (LGL\1969\31) was accepted by the Federal Constitution, and the successive changes made to the provision are also valid’ (STF, Full Court, RE 382.928, rel. Min. Marco Aurélio, Rel. p/acórdão Min. Alexandre de Moraes, j. 22.09.2020, DJe 09.10.2020.

9 .”Emergency Provisional Relief – Fiduciary sale of real estate – Purgation of arrears which may occur within fifteen days of the summons provided for in art. 26, § 1, of Law 9.514/97 (LGL\1997\95), or at any time, up to the signing of the auction notice (art. 34 of Decree-Law 70/1966 (LGL\1966\16)), in accordance with the understanding of the C. Justice. STJ – Appeal dismissed” (TJSP, AI2061421-64.2017.8.26.0000, 23rd Chamber. Dir. Priv., rel. Des. J. B. Franco de Godoi, j. 07.05.2017. Ratified by TJSP, Apel. Civ. 1035335-02.2019.8.26.0001, 26th Chamber. Dir. Priv., rel. Des. Antonio Nascimento, j. 19.08.2021).

10 STJ, AgInt no AREsp 1.286.812-SP, 3rd T., rel. Min. Ricardo Villas Bôas Cueva, j. 12.10.2018. It is worth analyzing this emblematic precedent: “Interlocutory Appeal in Special Appeal. Consignment action cumulated with annulment of a property consolidation act. Law 9.514/1997 (LGL\1997\95). Fiduciary sale of immovable property. Extrajudicial auction. Fiduciary debtor. Personal notification. Necessity. Fiduciary creditor. Consolidation of ownership. Purgation of arrears. Possibility. Decree-Law 70/1966 (LGL\1966\16). Subsidiary application. 1. Special appeal filed against a judgment published under the 2015 Code of Civil Procedure (Administrative Statements 2 and 3/STJ). 2. According to article 39 of Law 9.514/1997 (LGL\1997\95), the provisions of articles 29 to 41 of Decree-Law 70/1966 (LGL\1966\16) apply to real estate financing transactions in general, as referred to in Law 9.514/1997 (LGL\1997\95). 3. In the context of Decree-Law 70/1966 (LGL\1966\16), the case law of the Superior Court of Justice has long been consolidated in the sense that the debtor must be personally notified of the date of the extrajudicial auction, an understanding that applies to contracts governed by Law 9.514/1997 (LGL\1997\95). 4. The jurisprudence of this Court has established that it is possible to purge the arrears in a contract for the fiduciary sale of real estate (Law 9.514/1997 (LGL\1997\95)) when ownership has already been consolidated in the name of the fiduciary creditor. Arrears may be waived up to the signing of the auction document, provided that all the requirements set out in the art. 34 of Decree-Law 70/1966 (LGL\1966\16). 5. To review the conclusions of the judgment under appeal that the debtor was not personally notified of the date of the out-of-court auction and that the arrears were paid off before the auction was held would require a re-examination of factual matters and the interpretation of contractual clauses, procedures prohibited by Precedents Nos. 5 and 7/STJ. 6. Internal appeal not granted”.

11 According to the current understanding of the STJ, which after some oscillations no longer considers the market average as an absolute parameter for abusive interest rates, the Second Section decided in REsp 1.061.530/RS (rel. Min. Nancy Andrighi, DJe 10.03.2009), in the rite of repetitive appeals, that the revision of interest rates is admissible in exceptional situations, when it is proven that the stipulation of remunerative interest rates exceeds, in an abusive manner, the average practiced by the market for the contracted modality. The qualified precedent enshrined several other theses that have long been affirmed in case law, as follows: “Financial institutions are not subject to the limitation on remunerative interest stipulated in the Usury Law (Decree 22.626/33 (LGL\1933\1)), Precedent 596/STF. The stipulation of interest rates of more than 12% per year does not in itself indicate abusiveness. The provisions of article 591 and article 406 of the CC/02 (LGL\2002\400) are inapplicable to interest on bank loan agreements. Revision of remunerative interest rates is allowed in exceptional situations, provided that the consumer relationship is characterized and that the abusiveness (capable of putting the consumer at an exaggerated disadvantage (art. 51, § 1, of the CDC (LGL\1990\40)) is fully demonstrated, given the peculiarities of the specific trial. Recognition of the abusiveness of the charges demanded during the period of contractual normality (remunerative interest and capitalization) rules out default. The mere filing of an action to review a contract does not prevent the plaintiff from being in default. In banking contracts not governed by specific legislation, interest on arrears may be agreed up to a limit of 1% per month. Abstention from registration/maintenance in a default register, requested as a preliminary injunction and/or precautionary measure, will only be granted if, cumulatively: i) the action is based on a full or partial questioning of the debt; ii) there is a demonstration that the undue collection is based on the appearance of good law and on case law(iii) the undisputed amount is deposited or security is provided, as determined by the judge’s discretion. The registration/maintenance of the debtor’s name on a debtors’ register decided in the judgment or ruling will comply with what is decided on the merits of the case. Once the delay has been characterized, the registration/maintenance is correct. The registration/maintenance of the debtor’s name on a debtors’ register decided in the judgment or ruling will comply with what is decided on the merits of the case. Once the delay has been characterized, the registration/maintenance is correct. In banking contracts, it is forbidden for the judge to know, ex officio, the unfairness of the clauses”. Although it was handed down in 2009, this understanding remains in force. Therefore: “1. In loan agreements where the capital is made available immediately, the amount of interest charged must be stated in the respective instrument. If the rate is not fixed in the contract, the judge must limit the interest to the average market rate for operations of this type, published by Bacen, unless the rate charged is more advantageous for the client. 2 – In any event, correction to the average rate is possible if abusiveness is found in the remunerative interest charged.” STJ, REsp 1.112.880/PR, 2nd Section, rel. Min. Nancy Andrighi, DJe 05.19.2010.

12 STJ, REsp 1.431.572/SC, 3rd T., Rel. Min. Ricardo Villas Bôas Cueva, DJe 06.20.2016, ratified by REsp 1.388.972/SC, 2nd Section, rel. Min. Marco Buzzi, DJe 03.13.2017.

13 On the mortgage being considered “quite fragile” by the market, as the raison d’être of fiduciary alienation in guarantee: JUNIOR, Nelson Nery. NERY, Rosa Maria de Andrade. Leis civis comentadas. 5. ed. São Paulo: Ed. RT, 2019. p. 187. Later, they teach: “Precisely because it is a fiduciary alienation contract, its purpose is not to transfer ownership of the property, but rather for the legal business to be contracted for the purpose of guarantee. Resolvable ownership only comes into being with the consolidation of ownership, which, in turn, only occurs with the fiduciary’s default, with a different objective from the encumbrance of fiduciary ownership, which is constituted on the basis of the fiduciary’s consideration: the disbursement of the financing amount. Furthermore, by virtue of CC (LGL\2002\400) 1227, ownership is only consummated once the title has been registered with the Real Estate Registry (COSTA. Alienação fiduciária, pp. 36/37)”. Then, This is a real right of guarantee, the discharge of which leads to the end of the fiduciary property and its definitive transfer to the buyer, while its default leads to its consolidation in the name of the financing person (Ibidem, p. 191-192 and 194).

15 ALEXY, Robert. Teoria dos direitos fundamentais. Trad. Virgílio Afonso da Silva. 5. ed. Alemã, 1. ed. Brazilian. São Paulo: Malheiros, 2008. p. 407-409.

16 Cf. TOOGE, Rykardi. Competitividade empresarial piora, e Brasil recua uma posição em ranking mundial. In: InfoMoney, 19.06.2023. Available at: [www.infomoney.com.br/negocios/competitividade-empresarial-piora-e-brasil-recua-uma-posicao-em-ranking-mundial/ Accessed: 13.11.2023.