Brazil Diversified Banks: Potential Updates for Private Payroll loans - Our Channel Check Readthrough

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Brazil Diversified Banks: Potential Updates for Private Payroll loans - Our Channel Check Readthrough

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23 Jul 2026 10:05:14 ET │ 10 pages

Brazil Diversified Banks

Potential Updates for Private Payroll loans - Our Channel Check

Readthrough

CITI'S TAKE

Following news on potential regulatory and operational adjustments

aimed at strengthening the private payroll loan ecosystem (see Brazil

Diversified Banks: Private payroll loans: New rate cap, higher inclusion Gustavo SchrodenAC

concerns*), we have discussed the topic with companies under coverage. +55-11-4009-5858

In particular, our discussion with PicPay pointed toward potential gustavo.schroden@citi.com

adjustments including: (1) an increase in FGTS collateral coverage from Brian Flores, CFA

50% to 100% in proprietary channels, while maintaining the 1.99% +55-11-4009-2842

monthly rate cap; (2) an increase in the abusiveness threshold from 4.52% luis.brian.flores@citi.com

back to 4.99%; (3) enhancements to guarantee execution mechanisms; (4)

the implementation of portability auctions within the Digital Work Card Arnon Shirazi, CFA

(CTPS); (5) adjustments to margin-loss volatility during portability +55-11-4009-7906

arnon.shirazi@citi.com processes; and (6) broader access to Dataprev's borrower database. We

see the whole system potentially regaining appetite given the

enhancement to guarantees and visibility, although digital players like

INTR, NU, AGBK and PICS could benefit further provided their

positioning on the product.

In our view, the increase in FGTS coverage and the planned improvements to

guarantee execution directly address concerns around credit availability

following recent rate-cap reductions, as they should improve recovery rates,