Credit providers to be checked for racism

Another effect of the National Credit Act on credit providers is that the National Credit Regulator plans to undertake a survey of loans that had been rejected and compare them with the credit bureaus’ ratings scores to see if there is a racial undertone in lending practices. This is according to Regulator Gabriel Davel, who says the third-biggest complaint to the regulator in the two months since the Act has been in force has been about the rejection of credit applications, according to the Mail & Guardian Online.

Although the Act requires the credit provider to give only the basic reason for rejecting the loan, for example stating lack of affordability, he has concerns that there is a racial bias when it comes to loans, particularly when done through branch managers. ‘This is true in more cases than we want to admit,’ says Davel. Advocate Ashina Singh of the Credit Bureau Association says it would be advisable for credit providers to provide more detailed reasons for refusal. ‘If you don’t provide a reason there is an inference of discrimination.’

Full Mail & Guardian Online report: http://www.mg.co.za/articlePage.aspx...nomy__business