President approves new pension-backed loans

Brazil's President Luiz Inacio Lula da Silva signed a decree this week which allows banks to offer loans and financing to pensioners in which repayment is taken directly from monthly pension payments, Brazilian news agency Agencia Folha reported. Under the decree stipulations the federal pension system (INSS) has 30 days to publish how it plans to regulate the loans, and the decree still must be approved by the national social security council. In September this year the government authorized the issuance of loans tied to private sector employees, also under which employee payments are deducted from their monthly salary. The government already allows this type of loan for public sector employees.