I was waiting for this one, I was actually expecting trusts to pop up, but CCs are probably less complicated than trusts.
Is this correct? The guy at FNB seems to believe that juristic persons fall outside of the ambit of the act.TW notes that the NCA does not apply to mortgage credit agreements where the loan is registered in the name of a close corporation, private company or trust with more than two trustees.
"True to the Townhouse Warehouse culture, we are offering all investors who purchase a unit from our next launch (Los Alamos) onwards a free registered Close Corporation. This will enable the investor to purchase and apply for a bond in the name of the Close Corporation," writes TW.
Clients are told that if their bond applications are unsuccessful, a CC registration fee of R295 will be deducted if they request their deposit to be refunded. "The CC will however remain the property of the investor," notes TW.
FNB head of retail credit Mike MacMillan says that close corporations are excluded from the ambit of the NCA, so the specific affordability and over indebted aspects that currently need to be analysed and investigated by the banks to be compliant with the Act, do not apply.
Full article on MoneyWeb
CH4 Part C relates to credit marketing practices4. (1) Subject to sections 5 and 6 (deals with incidental credit agreements and juristic persons), this Act applies to every credit agreement between parties dealing at arm's length and made within, or having an effect within, the Republic, except-
(a) a credit agreement in terms of which the consumer is-
(i) a juristic person whose asset value or annual turnover, together with the combined asset value or annual turnover of all related juristic persons, at the time the agreement is made, equals or exceeds the threshold value determined by the Minister in terms of section 7(1) (currently set at R1 000 000.00);
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Limited application of Act when consumer is juristic person
6. The following provisions of this Act do not apply to a credit agreement or proposed credit agreement in terms of which the consumer is a juristic person:
(a) Chapter 4 - Parts C and D;
(b) Chapter 5 - Part A- section 89 (2)(b);
(c) Chapter 5 - Part A- section 90(2)(o); and
(d) Chapter 5 - Part C.
Chapter 1 of the National Credit Act
CH4 Part D relates to over-indebtedness and reckless credit.
CH5 Part C relates to consumer's liability, interest, charges and fees.
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