The National Credit Act (NCA) came into effect on 1 June 2007. One of the objectives of the NCA was to stop credit providers from providing credit to consumers who could not afford the credit. Six years down the line and the unfortunate reality is that a rather large percentage of credit consumers are in fact over-indebted. Fingers often point to credit providers and whether their business practices are in line with the NCA requirements. It is therefore imperative that credit providers revise their processes to ensure that they conduct business in accordance with the spirit and intent of the Act.
Considering the current credit position in our country, it is clear that despite the good intentions of the Act, some of the content needs clarification. On 29 May 2013 the Department of Trade and Industry therefore published the draft Amendment to the Bill, together with the draft Policy Review Framework, with the stated aim being to address problem areas identified in the practical
application of the NCA.
Some of the proposed amendments apply to the following aspects of the Act:
1. Amendments to some definitions like the definition of “lease” and “secured loan”;
2. Registration of debt counsellors;
3. Cancellation of registrations;
4. Changing the conditions of registration;
5. Suspension of reckless credit agreements;
6. Consent of spouse where married in community of property;
7. Registration and accreditation of alternative dispute resolution structures and agents.
Depending on your business model, some of the proposed amendments may have a big impact on your business operations. It is therefore necessary that you review current practices, and also consider the approach that the National Credit Regulator is likely to take in future.