National Credit Amendment Act in Force

The Presidency

The National Credit Amendment Act came into force on 13 March 2015.

The proclamation was published in Government Gazette 38557.

The act was assented to in May 2014.

It is designed to tighten up the way debt counsellors operate.

The act also aims to:

•    Empower the CEO of the National Credit Regulator (NCR) to delegate functions to other NCR officials;
•    Allow debt counsellors to voluntarily cancel their registration;
•    Empower the NCR to cancel registrations;
•    Empower the National Credit Tribunal (NCT) to suspend reckless credit agreements;
•    Tighten up the requirements for credit for marriages in community of property; and
•    Set up alternative dispute resolution mechanisms.

The National Credit Regulations including the Affordability Assessment Regulations were also published in notice 202 in the same Gazette and are now in force.

The regulations, flowing from the act, were published for comment in August last year.

They call on credit providers to “take practicable steps” to assess a consumer’s income status to ascertain whether repayment of a loan can be made.

Three months bank statements or payslips must be looked at.

Importantly, the consumer has to provide the credit provider with authentic documentation in order to carry out the assessment effectively.

A consumer’s credit profile as contained in a credit bureau must also be considered.

The rules also deal with the criteria for registration as a payment distribution agent, the transitional period for payment distribution agents already registered and the duties and obligations of payment distribution agents.

Regulations outlining how the National Consumer Tribunal is to function and the procedure to be followed when placing matters before it have also been published in notice 203 in the same Gazette.

Sabinet Cape Town Office

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