The last year has certainly stirred the credit industry, with consumers and credit providers struggling to keep abreast of latest developments, dos and don’ts. Various credit providers have also been called upon to defend their credit practices, by the National Credit Regulator and consumers alike.
The National Credit Amendment Act was assented to on 19 May 2014, and new draft regulations were published on 1 August 2014, both of which contain significant changes to credit law as we know it, with new procedures, factors and requirements in general.
On Friday 13 March 2015, the mentioned Amendment Act and regulations were finally announced to be effective with immediate effect. The regulations however, contain numerous changes to the draft that saw the light in August last year, but the spirit and intention thereof remains. These regulations, in contrast with previous (2013) guidelines, for example require consumers to provide credit providers with authentic documentation to perform affordability assessments. Affordability assessment processes are also regulated more strictly, with defined items to be included in the assessment of income and expenditure. Reference is also made therein to obtain proof of income, even if a consumer does not receive formal payslips.
It is expected that most credit providers’ business models will have to change in line with these new requirements on an urgent basis.
For a detailed discussion on how these amendments may impact on you or your business, kindly contact our offices.