Are you (Jan) sure you got this right?

http://www.persfin.co.za/index.php?fSectionId=588&fArticleId=3274664

and numerous other articles point to the act actually being the reverse of what you say, AND that it is in fact already in place and operational,

Yours, AW

The article you referred to reads:-
SA consumers find safety in new credit act
June 2, 2006

By Charlene Clayton

The most far-reaching consumer legislation in years became effective this week. The National Credit Act sets a framework for every type of credit transaction, from microloans to homeloans, from overdrafts to furniture finance. We report on when other protection measures take effect.

Consumers, credit bureaus and providers of credit ranging from microlenders to banks all need to get to grips with new National Credit Act, which became effective on Thursday this week.

The Act introduces new rights for consumers, as well as measures that allow consumers to make informed decisions before buying goods and services on credit.
It also places a greater responsibility on credit providers to refuse to give you credit if you cannot afford it and, for the first time in South African history, it will regulate the way credit bureaus do business.

The new National Credit Act replaces the Usury Act (which governs moneylending transactions), the Credit Agreements Act (which has governed instalment sale or “hire purchase” agreements) and the Exemption Notice to the Usury Act, under which microlenders have been making loans and which has exempted the microlenders from the interest rate cap imposed on banks.

A new regulator, called the National Credit Regulator, also came into being on Thursday.

This a body that will enforce the Act, monitor market trends and advise the Minister of Trade and Industry on matters of national policy relating to consumer credit.

The new regulator will also educate consumers about their rights.

Gabriel Davel, the chief executive of the now disbanded Micro Finance Regulatory Council, has been appointed as the chief executive of the newly created National Credit Regulator.

Davel says that some provisions of the old acts will still apply until all the sections of the new National Credit Act come into effect.

In practice, this means that banks must still adhere to the maximum rates defined under the Usury Act, microlenders must still meet all the requirements for disclosure to borrowers as required under the Usury Exemption Notice, and the provisions of the Credit Agreements Act will continue to apply.

New regulations
Regulations under the National Credit Act which will specify maximum interest rates and transaction fees that can be charged on credit agreements or loans are still being finalised. These maximums will only be implemented in June next year.

However, all the old Acts now fall under the authority of the National Credit Regulator and if you, as the consumer, find that a microlender, bank or other credit provider is flouting the provisions of the old Acts, you can complaint to the National Credit Regulator.

However, you can continue to take your complaints to the Ombudsman for Banking Services, the Credit Information Ombud and to the consumer desks that fall under the Department of Economic Affairs in each province.

The Micro Finance Regulatory Council’s complaint line will also continue to operate for the time being, Davel says.

Another provision of the Act which became applicable from the beginning of this month is that all credit providers and credit bureaus must register with the National Credit Regulator within 40 working days from June 1, 2006.

A national database of credit agreements is being set up and will be maintained by the National Credit Regulator who will receive information about credit agreements from the credit providers and credit bureaus.

The idea behind the national credit register is that all your outstanding loan and other credit obligations will be listed on the register.

Prospective credit providers can check this database to assess whether you can afford to take on more debt before giving you a loan or extending credit to you.

Future provisions
Some of the more significant provisions of the National Credit Act that will come into effect on September 1, 2006, include:

The establishment of the National Consumer Tribunal, which will hear complaints from consumers about credit agreements and credit providers and will make orders regarding any conduct prohibited by the National Credit Act.

The right of consumers to access and to challenge information held about them at credit bureaus.

The new Act will give you the right to check your record held by a credit bureau once every year and you may not be charged a fee for doing so.

You will be able to challenge any inaccurate information about you on credit bureau records or on the national credit register.

The credit bureau and the National Credit Regulator will be obliged to investigate the accuracy of the information that you challenge without any charge to you.

An obligation on credit bureaus to take reasonable steps to verify the accuracy of any consumer credit information that is reported to it by credit providers.

The protection of confidential information of consumers held by credit bureaus and credit providers and the National Credit Regulator.

The Act states that your personal information may only be used for a legal purpose and it may only be released or reported to others under specific circumstances.

These circumstances include if there is a court order or an order of the National Consumer Tribunal which orders the release of your information to somebody else or if it is on your instruction.

In the final phase of implementation of the new Act on June 1, 2007, all the remaining provisions of the Act come into effect.

The final provisions of the Act include new and improved rights for consumers, the regulation of credit marketing practices, the introduction of pre-agreement disclosures and mechanisms for consumers who are unable to pay off their debts.

Consumer rights
Some of the more significant rights that you will enjoy as a consumer include the right to:

Apply for credit

Be protected against discrimination in the granting of credit.

Be informed of the reason why your application for credit is refused, if you ask for a reason.

Receive a credit agreement in plain and understandable language, and also

Receive a copy of your credit contract and a replacement copy when you request one.

Credit marketing practices
As from June next year, negative option marketing (in which you are sold a product or service unless you specifically contact the provider to say you don’t want the goods and services) will be outlawed.

A credit provider may not harass you into entering a credit agreement, nor may a credit provider enter into a credit agreement with you after cold calling on you at your home.

The new Act also requires that interest rates and other costs must be spelt out in any advertisements in a format that is prescribed by the National Credit Regulator.

Pre-agreement disclosures
The Act requires – and this provision comes into effect from June 1, 2007 – that you are given quotation documents on any proposed credit transaction that are valid for five working days. This document must be set out in a format prescribed by the National Credit Regulator, and must spell out the interest rates and other costs that will apply should you enter into that particular agreement.

Davel says the form must make very clear what the credit agreement will cost you. The purpose of the pre-agreement disclosure document is so that you can shop around for the best deal before signing.
reckless credit

The Act aims to stamp out reckless lending and predatory practices. You are considered as having too much debt (being overindebted) if it is unlikely that you will be able to meet all your debit obligations timeously.

The reckless granting of credit is prohibited under the Act.
Reckless credit is when a credit provider gives you a loan or other credit without assessing whether you can repay the loan and even if you do not understand or appreciate the risks, costs or obligations under the credit agreement or if the granting of the credit leads to you becoming overindebted.

The new Act also allows consumers to apply to a debt counsellor to have their debts restructured if they have taken on too much debt.

If the debt counsellor finds that you are over-indebted then he or she can recommend to a Magistrate’s Court that your debts be restructured to suit you and then your creditors.

Davel emphasises that it is no good asking for your debt to be restructured if you live beyond your means. The consumer must also take responsibility for their finances, he says.

Three-phase Act
The National Credit Act will be implemented in three stages:

Most of the Act’s administration provisions came into effect on Thursday (June 1);

On September 1, the National Consumer Tribunal will come into force, as will measures to protect you against unfair practices by credit bureaus;

The new and improved consumer rights will come into force on June 1, 2007.

Three-phase Act
The National Credit Act will be implemented in three stages:

JAN Replied:
Hi Alain,
Thanks for this. Its a nice explanatory article.

Keep in mind that EVERY ONE of the over 720 laws that the ANC has changed in its 12 years in tenure has been done by telling us how GOOD these laws are, how beneficial they will be, etc. Every one of them…

But as John Loeffler likes to say, “Communism comes riding in on a white horse.”

This is no different. Remember, the S.African Communist Party, just the other day said that this was its greatest achievement of 2006 – and so the question then becomes – why is the Communist Party so delighted by this law that they had a hand in.

re: When it comes in to effect.
OK, I have not read the full law in detail before, but my comments were based on things I heard at my work because that law affects the company I work for BIG TIME. All our computer systems will undergo changes because of this law. So we have to comply with it.

As you will see, it came into effect in June 2006 (which I was unaware of), but it does so in phases and by June 2007 it is in full effect. In the company I work for, we’re targetting changes to our systems which we want to go live by March 2006. So that’s why I said March… My apologies.

In these laws, there is the hidden communism and socialism, and this is of course where the trick lies. The law as a whole sounds good, but certain conditions in it will have very negative and dangerous effects – and that is what I am warning of.

For example, you will see there is a new regulator. What this article does not mention is what happens if you refuse credit to someone. That person can take a company, like the one I work for, to that regulator – in effect – to court. There is going to be a court system linked to this. They may call it an ombudsman… but rest assured… this is going to be something with TEETH. And that is why certain people in the business are worried… because they can be taken to task.

Now in this country, the ANC instituted a similar thing a time back called the CCMA. I can’t remember what it stands for but it is our labour courts. They created a huge court system for that too. I saw in news headlines the other day that the CCMA COSTS S.AFRICA BILLIONS.

These communists/socialists have a LOVE of huge bureaucratic things – and these things – in the Third World especially – come at a HEFTY COST. So rest assured, firstly, the NCA will bring with it a huge bill for (a) Govt and (b) a huge bill for business.

(b) will result (is already resulting), in expensive changes to computer systems and procedures. New systems have to be written and old ones changed. This brings with it a cost. Among the requirement (which are not mentioned in the above description of the act) is that anyone who lends money must record ALL applications for credit, even if they are refused. They must record them and store them on computer systems for a minimum of 5 years! If a credit application is refused, the company must record also the reason why it was refused.

Now… the reason why it was refused… is going to be crucial, because this is where another portion of the law kicks in. (I will point you to the appropriate sentences in the article)… If a person, say a black person, believes his credit application was turned down because he is BLACK… he can then take that company to this credit regulatory court… and if they agree… then this company will get into trouble. I’m not sure the punishment… but there will be such a thing – possibly a fine (that’s my guess).

So… someone can apply for credit… have it refused and then can take you to court and claim money from you! Yeah!

Of course… its not that evil… on the face of it, because everything has to be reasonable and be proved… but in effect what I’m describing CAN HAPPEN.

Now it claims that the purpose is to control the amount of credit people can take. I know there is a CALCULATION inside this NCA law… I’ve heard of it, but not seen it. This could be a valid reason for turning someone down.

So that part of it may not… ON THE FACE OF IT… look evil. But with many of these laws its not the THEORY that’s the issue… its the PRACTISE… once this thing kicks in – because then you’ll see where the holes are.

I see that in this, it appears as if Govt will have some control over interest rates.

A good part is the part where yes, a potential borrower is told in clear terms what his committments will be. That is for the blacks to grasp clearly.

But keep in mind that this legislation is largely socialist… they are now meddling directly into businessness and business transactions. This not only comes at a cost, but it is in contravention of free market economics.

Take for example the fact that there will now be a central database of every single credit transaction in the country. Again… as per before with our Receiver of Revenue… our FINANCIAL PRIVACY is ZERO. Sure… officially other people can’t see our records… but look at the corruption in this country… and how easy it is to bribe people. Now… some crook can bribe someone… and will soon get their hands on many intimate financial details of people which were not available before. The banks are more secure and more private than the Govt. Now ALL our credit transactions will be handed over to a Govt body. They will know everything about what we buy… Later… you’ll see… what will happen on the criminal side when this stuff is available. So I worry about our ever decreasing privacy and what can happen to that info.

The part that worries me the most are these “Consumer Rights” listed in the article. Look at them:-
o Apply for credit
o Be protected against discrimination in the granting of credit.
o Be informed of the reason why your application for credit is refused, if you ask for a reason.

You see those bottom two. Those two are the ones I was watching… “Discrimination” and you’ll be told why your reason for credit was refused. THAT is the stuff which that applicant can challenge in this new court system.

Now… let me explain more why I say this is evil. In normal business, the management determine what is viable, and economical in order for the business to function. But in this legislation, the decision on risk and economic viability is REMOVED FROM THE COMPANY. It is now in the hands of a socialist/communist in Govt who has no idea (more likely no interest in) the realities of business. So now… a Govt Law can FORCE a company to grant loans to people who are bad risks. Oh, the law OFFICIALLY states that it is about PREVENTING BAD RISKS… but I’m going to lay you a bet that the opposite will be the case. Remember… there is a vast difference between ANC THEORY and ANC PRACTISE. And this law is so constructed that the PRACTISE could drive businesses into the ground by forcing them to lend to bad risks… OR fining them if they do not.

Taking the risk calculation out of the business is hideous. This is socialism and communism at its finest. How can THE GOVT tell you to lend your money to a bad risk client? This country is FILLED with potential bad risk clients. Most of the population are bad risks. I reckon, the real, hidden purpose of this law will be to FORCE BANKS TO LEND MONEY TO HIGH RISK BLACK CLIENTS WHO WILL THEN DEFAULT ON THOSE LOANS. Remember what I’ve told you.

Now, there’s another hidden danger in this law which your article refers to. It mentions that in the case when a person cannot pay their debts… an arrangement will be reached. This is NOT as “good” as you think. Already the laws are in place in this country, that if you cannot pay your debt… you can go and tell that person that you can only afford to pay X and he has to accept that!

Keep in mind too… that the Govt, just last year or so, wiped out ALL the records of the people who were BLACK LISTED. They wiped out and negated the list of people who WERE BAD RISKS.

What is not mentioned above… but is already law… is that you CANNOT refuse credit to a person BECAUSE HE DEFAULTED IN THE PAST. So… already the ANC is forcing you to lend to bad risk clients.

So… you now lend to a bad risk client and he starts defaulting… now you can’t go and reposses his property. You may have to accept his payment of X per month no matter how bad it is.

So mark my words… these various laws the ANC is sneaking in, from behind the scenes… are so designed that with a minor bit of manipulation, these laws will be DAMAGING BANKS BIG TIME.

My prediction is that Banks are going to be having the roughest time EVER in the history of this country in the next few years and this law will be one of the roughest and most hideous pieces of legislation ever put into effect.

I suggest that you keep following this process… give it a time to take effect and then you’ll see. I reckon, whichever way you look at this, in terms of cost, etc… this thing will be a serious problem and a drag on this economy.

This law is designed with BLACK MASSES in mind … the black masses who normally can’t get loans because they are bad credit risks. This law is designed for them. It sounds cool… but wait for it to be put into practise. I reckon you will see many problems coming out of this law.

Again, I repeat… I think our banks are heading for SERIOUS SERIOUS TROUBLE in the coming years because of this and other laws. Jan