DTI Briefs Parliament on National Credit Amendment Bill

Department of Trade and Industry

The trade and industry department, National Credit Regulator (NCR) and National Consumer Tribunal (NCT) support the Draft National Credit Amendment Bill.

This was made clear during a recent briefing on the draft bill in parliament.

The proposed legislation is designed to provide debt interventions for low income, over-indebted consumers.

The draft bill seeks to:

•    amend the National Credit Act, 2005, so as to provide for debt intervention;
•    include the evaluation and referral of debt intervention applications and the suspension of agreements considered to be reckless as part of the enforcement functions of the National Credit Regulator;
•    include the consideration of a referral as a function of the Tribunal;
•    require a credit provider and debt counsellor to determine whether an agreement is reckless;
•    provide for a court to refer a matter for debt intervention;
•    provide for an application for debt intervention and evaluation thereof;
•    provide for orders related to debt intervention and rehabilitation in respect of such an order;
•    enable the Minister to prescribe a debt intervention;
•    provide for mandatory credit life insurance;
•    provide for offences related to debt intervention, prohibited credit practices, reckless lending, selling or collecting prescribed debt and related to failure to register;
•    provide for measures when an offence is committed by a company;
•    provide for penalties in relation to the created offences;
•    provide for the Tribunal to change or rescind an order under certain circumstances;
•    require the Minister to prescribe a financial literacy and budgeting skills programme; and
•    to provide for matters connected therewith.

The department announced that a legal opinion on the constitutionality of the bill is being sought. A report will be presented to the trade and industry committee on conclusion of the process.

Issues under scrutiny include extinguishment of debt, proportionality of impact of the draft bill to its desired outcome and the suspension of suspected reckless agreements by the NCR.

The department also declared that it was prepared to carry out a socio-economic impact study. Such a study could commence once the committee gave the green light.

In a separate matter, the trade and industry minister, Rob Davies, recently briefed the committee on the State of the Nation Address and the Budget with respect to the department’s mandate.

Some of the areas focused include black industrialists, automotive investment scheme, 12I tax allowance scheme, manufacturing investment programme and special economic zones.

Sabinet Cape Town Office

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