Lula Proposes Banning Banks From Issuing Multiple Credit Cards

In a bid to curb record household debt, Brazilian President Luiz Inácio Lula da Silva announced that his administration is negotiating a proposal with the central bank to ban financial institutions from issuing more than one credit card per person. Speaking during an interview on the Flow Podcast on October 1, 2026, Lula criticized the aggressive marketing practices of commercial banks, calling the unsolicited distribution of credit cards "a crime" and pledging to "moralize" consumer lending.

The aggressive proposal directly targets a major source of profitability for Brazil's financial sector and addresses a deep-seated economic pain point for voters. According to data from the Banco Central do Brasil, the average annual interest rate on revolving credit (crédito rotativo)—the interest charged when a customer fails to pay their bill in full—reached a staggering 449.4% in August 2026. This extreme interest rate structure has left millions of working-class Brazilians trapped in compounding debt cycles.

This policy push comes at a critical political juncture as the administration faces growing pressure over the cost of living and household financial distress. Data from the National Treasury and consumer protection agencies show that approximately 83.9 million Brazilians are currently blacklisted on credit registries (negativados), while family debt levels remain near historic highs. With the political cycle intensifying, addressing consumer debt has become a key battleground for Lula's administration, which has already deployed debt-renegotiation initiatives like the Desenrola program to relieve struggling households.

Implementing such a restriction would require close coordination with the central bank, which holds the regulatory authority over credit limits and banking practices. Lula noted that he is discussing the measure with Gabriel Galípolo, the newly appointed head of the central bank, to establish macroprudential rules that limit how many credit accounts a single taxpayer registry (CPF) can hold. Central bank data from 2025 indicated that the average Brazilian maintains 6.7 distinct relationships with financial institutions, a sharp increase driven by the rapid rise of digital fintech platforms over the last decade.

Whether the proposal can transition from campaign-style rhetoric into actual regulation remains highly uncertain. Banking industry representatives have historically warned that artificial caps on credit availability or card issuance could inadvertently push low-income consumers toward informal, unregulated lending markets. The central bank has previously favored incremental macroprudential measures, such as tightening capital requirements for high-risk consumer loans, rather than outright bans on product ownership.

What it touches

The proposed restriction directly exposes Brazil's major retail banking institutions and digital fintech giants to regulatory risk, as credit card transaction fees and revolving interest are major profit drivers. Shares of large traditional lenders like Itaú Unibanco, Banco Bradesco (BBDC4), and Banco do Brasil (BBAS3), alongside high-growth digital platforms like Nubank, are highly sensitive to changes in consumer credit regulations and central bank macroprudential policies.