The National Credit Amendment Bill, signed into law by President Cyril Ramaphosa earlier this week, is not a mechanism to expunge debt for the over-indebted. Rather, it’s an instrument allowing the low-income market access to debt review at no cost.
They help to renegotiate interest rates with credit providers and extend repayment terms. Once under debt review, clients cannot access further credit – and they don’t qualify for consolidation loans either. “A credit provider may not re-instate or revive a credit agreement where an order of the Tribunal was executed, or where the Tribunal ordered that the debt is extinguished, or that the credit agreement was reckless or void. A court must dismiss a matter before it where the credit agreement was declared reckless or void by the Tribunal or the Tribunal ordered that the debt was extinguished. Orders of the Tribunal are binding on credit providers and consumers as well.
Courts are able to refer matters directly to the NCR for debt intervention. And debt counsellors are duty-bound to always consider credit agreements for reckless lending and not only when the consumer requests it. “Banks have a fiduciary duty to protect the savings and investments of their depositors, the workers, professionals and businesses of South Africa. Banks invest the country’s savings in productive infrastructure and employment creating commercial ventures, for the benefit of all South Africans Banks cannot extend other people’s money as loans – for education and entrepreneurship – if they cannot be sure these loans can be repaid.
It says the act puts the country’s savings, investment and access to credit at risk. “The signing into law of the Act is a further example of the government acting in a way that continues to erode confidence in the SA economy. However, we will meet in the next few days to consider options to address the serious situation the passing of the act will create in the credit market.”
“The amendment bill will increase the cost of credit for low income-earners, weaken the fight against illegal lenders and negatively disrupt the credit market while posing a financial risk to the State, when SA consumers are already under enormous financial strain,” says Macpherson.
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Credit bill means people might escape repaying their debt, banking group warnsBanks will either have to price in higher risks or avoid lending to low-income customers altogether, the Banking Association of SA says
Source: BDliveSA - 🏆 12. / 63 Read more »
Source: BDliveSA - 🏆 12. / 63 Read more »
Source: SABC News Online - 🏆 32. / 51 Read more »
Outa to challenge Aarto in court while AA slams focus on money over safetyThe Organisation Undoing Tax Abuse (Outa) says it will launch a constitutional challenge to the new Administrative Adjudication of Road Traffic Offences (Aarto) Amendment Bill (Aarto).
Source: TimesLIVE - 🏆 28. / 59 Read more »
Outa to challenge Aarto in court while AA slams focus on money over safetyThe Organisation Undoing Tax Abuse (Outa) says it will launch a constitutional challenge to the new Administrative Adjudication of Road Traffic Offences (Aarto) Amendment Bill (Aarto).
Source: SowetanLIVE - 🏆 13. / 63 Read more »
Source: IOL - 🏆 46. / 51 Read more »