On Friday 1 August 2014 the Draft National Credit Regulations for Affordability Assessments where published for public comment.
The Regulations however addresses much more than just the proposed Affordability Assessment Guidelines. It also provides for:
- Criteria for registering as a payment distribution agency;
- Prohibition on debt counsellors to collect and distribute monies on behalf of consumers;
- Amendment of Regulation 17 that deals with credit bureau retention periods;
- Submission of information to a credit bureau by a data supplier; and
- Training requirements for payment distribution agents, credit providers and debt counsellors.
The proposed changes in the data retention periods decrease the display period for enforcement actions from 2 years to 1 year. It also decreases disputed information from 18 months to 6 months and previous enquiries from 2 years to 3 months. No retention period is prescribed for sequestration and rehabilitation orders (currently ten years and five years respectively).
The Draft Affordability Regulations will, if accepted in its current form, apply to current, perspective and joint consumers, all credit providers and all credit agreements to which the National Credit Act except for, amongst others, school or student loans, incidental credit agreements and emergency loans.
In terms of the Draft Regulations, credit providers will be required to:
- Take practical steps to assess the consumers income in order to determine the consumer’s financial means;
- Perform an enquiry to take into account the consumer’s payment profile historyunder credit agreements, which must be performed within 14 days (for mortgage applications) or 7 days (for all other credit applications or credit limit increases);
- Disclose the credit cost multiple together with the total cost of credit in the pre-agreement statement and quotation; and
- Attempt to resolve a complaint from a consumer as to the outcome of an assessment within 14 days.
Comments may be submitted 30 days from the date of publication of this notice and interested parties may send their written comments to:
Director-General, Department of Trade and Industry
Private Bag X84
Individuals may also hand deliver their written comments to:
77 Meintjies Street
Block B, 1st Floor
Tel: 012 394 5646
Fax: 012 394 6646
Email: [email protected]
For Attention: Mr Klaas Mokaba