By Brazil Stock Guide — Brazil’s Instituto Nacional do Seguro Social (INSS), the federal agency that administers pensions and social security benefits, has suspended new payroll-deductible loan registrations from Banco C6 Consignado, a unit of digital lender C6 Bank. The measure prevents the bank from issuing new loans through the INSS system until amounts deemed improperly charged are reimbursed to beneficiaries.
C6 said it “strongly disagrees” with the decision and has already filed legal action to restore operations, arguing that it complied fully with applicable regulations and did not engage in any irregular practices.
In a statement to Brazil Stock Guide, the bank said the benefits package cited by authorities included discounts at pharmacies and medical clinics, funeral assistance and free telemedicine services. C6 reiterated that it has never engaged in tied selling and that payroll loan contracts were not conditioned on the purchase of additional products. The bank also said it does not charge recurring fees related to such benefit packages.
The lender added that it is confident it complied with existing rules, including INSS Normative Instruction 138, which prohibits certain charges such as credit opening fees and insurance products in payroll loans.
The bank also said it had voluntarily suspended the offering of such benefit packages in November 2025, ahead of the regulatory action.
The decision follows an audit by Brazil’s federal watchdog, the Controladoria-Geral da União (CGU), which identified charges linked to “service packages” deducted directly from pension payments. The findings were confirmed by INSS technical staff. According to the official ruling, authorities and the bank held multiple meetings between November 2025 and February 2026, but failed to reach an agreement.
Scale under scrutiny
The INSS did not disclose the financial impact of the case, but local media reports suggest the investigation may involve as many as 320,000 contracts with signs of additional charges, as well as potential reimbursements of up to R$ 300 million ($60 million).
C6 declined to confirm the number of affected contracts or any estimated reimbursement amount, saying that such information is not public and that discussions with the INSS are confidential.
If confirmed, the figures would place the case among the most significant recent developments in Brazil’s payroll lending market.
Payroll-deductible loans — known locally as consignado — are widely used in Brazil, particularly among retirees and public-sector workers. Repayments are automatically deducted from salaries or pensions, making the product traditionally low-risk for lenders. The suspension of new registrations, however, directly disrupts the bank’s ability to originate new loans in the segment.
Pattern of complaints
Data from Brazil’s Central Bank show that, in the fourth quarter of 2025, C6 recorded a significant number of upheld customer complaints, many tied to credit products and transparency. These included issues in how payroll loans were offered, irregularities in credit services, and difficulties with portability and documentation.
C6 confirmed that new loan issuance through the INSS system is currently suspended, but said it is seeking to overturn the decision in court and has already taken legal action to restore operations.
The INSS, for its part, said operations will only resume once all improperly charged amounts are repaid and indicated that further measures may be taken in case of non-compliance.
Regulatory pressure builds
The case comes amid increased scrutiny of Brazil’s payroll lending market, which has long faced criticism over aggressive sales practices and limited transparency in bundled offerings. Investigations into fraud involving pension-related deductions are also advancing in Congress, where a parliamentary inquiry is examining irregularities affecting beneficiaries.
C6 Bank — founded by former BTG Pactual executives Marcelo Kalim and Carlos Fonseca — has grown rapidly in recent years with backing from global investors. JPMorgan is its largest shareholder, holding roughly 46% of the capital.
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