In a recent court decision, the Brazilian Superior Court of Justice (STJ) ruled that the Interbank Deposit Certificate rate (so-called “CDI”) cannot be used as a monetary correction index, even if it was agreed upon by the parties in the bank credit note.
The CDI rate is a daily average of overnight interbank loans, used as an investment benchmark in the Brazilian financial system. Its use as a remunerative interest rate is accepted in the Brazilian courts (including by the STJ itself), but this case discussed its stipulation as index of monetary correction, and not as a composition of remunerative interest.
In the understanding of the STJ, the CDI rate cannot be used as a monetary correction factor, as it consists of the remuneration due on interbank loans. Therefore, as it does not reflect the devaluation of the currency, it cannot be used as a monetary correction index – as the debtor must pay off the debt while preserving its real value. Monetary correction cannot be intended to represent capital gain.
It is important to highlight that the fact that the CDI rate was agreed between the parties in the bank credit note did not prevent the STJ from judging its incidence abusive.
Creditors must be aware, as once abusiveness is declared, the judge himself will define which monetary correction index should be applied in the specific case (for example, the National Consumer Price Index – so-called “INPC”) or, even, determine the prevalence of CDI rate in the composition of late payment charges, excluding other indices or agreed interest rates, which could be detrimental to the creditor.