President Jacob Zuma has signed into law the National Credit Amendment Act, 2014. The Minister of Trade and Industry, Dr Rob Davies says this will amongst others offer more protection to consumers against irresponsible/ reckless lending practices. He said it is unacceptable that 50% of about 21 million credit active consumers' records are impaired, and many are currently unable to access credit and employment due unsecured lending and irresponsible lending practices.
Minister Davies says it is an obligation of the government to protect vulnerable consumers against unscrupulous practices. This law will improve the effectiveness of Debt Counselling, Debt Review, and the work of Payment Distribution Agencies
"Currently a lot of credit is extended recklessly against the spirit and objectives of the Credit Act. Our investigation in Marikana found that 100% of the lenders looked at, did not adhere to the Act, thus leading to reckless credit. The National Credit Amendment Bill (NCAB) therefore empowers the Minister to prescribe affordability assessment regulations to achieve uniformity and consistency in this area. The affordability assessment regulations will include elements relating to discretionary income as well as determine the buffer in respect of income that should not be taken into account when conducting affordability assessments. This will assist as most credit providers have provided credit to the maximum of the consumer's income, leaving the consumer with not much income for other things", said Minister Davies.
Davies added that government will be able to crack down on illegal lenders as all lenders are required by the Law to register with the National Credit Regulator (NCR)