Brazil’s Superior Court of Justice has ruled, under the binding repetitive appeals procedure, that financial institutions may unilaterally terminate checking account agreements.

In Theme 1,119, the Court’s Second Section held that Article 39, IX, of the Brazilian Consumer Protection Code does not prevent a bank from terminating an existing checking account relationship.

The ruling does not, however, grant banks unrestricted authority to close accounts.

Financial institutions remain subject to specific regulations issued by the National Monetary Council and must comply with applicable information, transparency and prior notification requirements.

Why did the Court distinguish checking accounts from the general consumer rule?

The Court considered that checking accounts are governed by specific financial-sector regulations.

CMN Resolution No. 4,753/2019 governs the opening, maintenance and termination of deposit accounts and allows either party to terminate the contractual relationship, subject to applicable requirements.

Brazilian consumer law continues to apply generally to financial institutions. Theme 1,119 addresses the specific application of one Consumer Protection Code provision to unilateral checking account termination.

Prior notification remains relevant

The decision does not eliminate procedural requirements applicable to account closures.

Banks must continue to comply with prior notification obligations and other regulatory requirements.

The Court also declined to establish a broad rule defining every circumstance in which a particular reason for account termination, including a general reference to commercial interest, will necessarily be valid or abusive.

Individual circumstances may therefore remain relevant.

Why does this matter for companies?

For businesses, a checking account may support a significant portion of daily operations.

Supplier payments, customer receipts, payroll, taxes, automatic payments, credit facilities and financial system integrations may all depend on a particular banking relationship.

If these activities are concentrated with a single institution, termination of the account may create significant operational disruption even when the termination itself complies with the applicable rules.

The decision therefore raises an important business continuity issue.

Banking concentration as an operational risk

Companies may need to assess whether essential financial operations rely excessively on a single banking provider.

Maintaining alternative banking arrangements for critical activities can help reduce exposure to unexpected disruptions.

Organizations should also maintain updated registration information, monitor communications from financial institutions and establish internal procedures for responding to account termination notices.

The Court’s ruling does not eliminate the possibility of challenging account closures that fail to comply with applicable regulations or contractual duties.

For companies, the broader lesson is that banking relationships should increasingly be viewed not only as financial services, but also as part of operational risk and business continuity management.