On 24 November, the Portfolio Committee on Trade and Industry published the draft National Credit Amendment Bill, 2018 and the Memorandum on the Objects of the Bill (the Bill) for public comment. The Bill establishes a procedure by which low income and over-indebted consumers under credit agreements (who may not qualify to undergo the debt review or sequestration processes) may apply for debt intervention.
The Bill provides for the National Credit Tribunal and National Credit Regulator to make a myriad of orders. Note that debt intervention orders will result in all qualifying credit agreements being suspended for an initial period of 12 months and, subject to a review of the consumer’s financial circumstances, may extend the suspension period for a further 12 months or make an order extinguishing the credit agreements, partially or in full, where the financial circumstances of the consumer have not improved. Further, where a credit agreement is subject to credit life insurance, the credit agreement may be suspended to allow for the consumer to claim from the insurance provider.
The Bill also implements criminal sanctions for certain contraventions of the National Credit Act, 2005.
The proposed amendments by the Bill will directly impact credit providers and consequences of the new provisions will need to be considered carefully.
The public has until 15 January 2018 to submit written comments to the Portfolio Committee on Trade and Industry where after public hearings will be held to discuss same.