Comments on Draft National Credit Amendment Bill, 2018 Review by Professional Accountants
Detailed analysis and recommendations by the South African Institute of Professional Accountants on key sections of the Draft National Credit Amendment Bill, 2018, addressing issues related to tribunal functions, reporting time frames, debt intervention, and interest accumulation on credit agreements.
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COMMENTS ON DRAFT NATIONAL CREDIT AMENDMENT BILL, 2018 AND THE MEMORANDUM ON THE OBJECTS OF THE BILL The Professional Accountants (SAIPA) is a leading accountancy representing qualified Accountants (SA) commerce and industry, academia and the public sector. South African Institute of INTRODUCTION: institute Professional practice that in
COMMENTS ON DRAFT NATIONAL CREDIT AMENDMENT BILL, 2018 AND THE MEMORANDUM ON THE OBJECTS OF THE BILL Section Issue: Recommendation Paragraph 5 of Section 27 There might be an issue in numbering the new inserted subsection. Recommendation: The citation of the inserted subsection is referred to as (iA) and not "(iii) . Section 27 (a) as a whole deals with the function of the Tribunal to adjudicate. The proposed newly inserted subsection is not intended to be the continuation of subsection (i)
COMMENTS ON DRAFT NATIONAL CREDIT AMENDMENT BILL, 2018 AND THE MEMORANDUM ON THE OBJECTS OF THE BILL Section Issue: Recommendation Paragraph 8 (c), Section 69 (3) Should the time frame not be prescribed, the consumer whom the legislature intends to protect, will be prejudiced by the credit provider delaying to report the particulars of the termination or satisfaction of any credit agreement. The credit provider should report within a specific time frame. This will be within the spirit of the principal Act.
COMMENTS ON DRAFT NATIONAL CREDIT AMENDMENT BILL, 2018 AND THE MEMORANDUM ON THE OBJECTS OF THE BILL Section Issue: Concern/ Recommendation Paragraph 10, Section 71A (3A) (c) In terms of an order contemplated in section 88 (c) 4, the credit bureaux must remove a listing related to a successful debt intervention application if the Tribunal is of the view that the financial circumstances of the debt intervention applicant did not sufficiently improve during the period or extended period contemplated in subsection (3). Is the intention of the legislation to have this clause applicable (meaning removal after 12 months) even though that the debt intervention applicant has partially defaulted during the debt intervention order.
COMMENTS ON DRAFT NATIONAL CREDIT AMENDMENT BILL, 2018 AND THE MEMORANDUM ON THE OBJECTS OF THE BILL Section Issue: Recommendation Paragraph 11, Section 82A (6) The consumer might be prejudiced by interest accumulated during the suspension of the alleged agreement. No interest should accumulate on the suspended alleged reckless credit agreement, and such interest be reinstated upon communication by the National Credit Regulator to uplift such a suspension to avoid potential prejudice against the consumer.
COMMENTS ON DRAFT NATIONAL CREDIT AMENDMENT BILL, 2018 AND THE MEMORANDUM ON THE OBJECTS OF THE BILL Section Issue: Recommendation Paragraph 14, Section 88A (1) (a) There are many over 18 year olds who are not permanently employed, but heading households. This is despite the fact that these individuals do not fall under the definition of a child. This section should be extended to any under 21 unemployed individual heading a household. Any under 21 unemployed individual heading a household, whether man or woman remains vulnerable.
COMMENTS ON DRAFT NATIONAL CREDIT AMENDMENT BILL, 2018 AND THE MEMORANDUM ON THE OBJECTS OF THE BILL Section Issue: Concern/ Recommendation Paragraph 14, Section 88A(1) (b)(v) In applying the legislation, the consumer might be prejudiced if there is no clarity on the definition of the immediate household. Does immediate household includes dependents even though there is no legal adoption? What is the definition of immediate household.
COMMENTS ON DRAFT NATIONAL CREDIT AMENDMENT BILL, 2018 AND THE MEMORANDUM ON THE OBJECTS OF THE BILL Section Issue: Recommendation Paragraph 14, Section 88A(1) (g) For purposes of clarity, will the consumer be given an opportunity to approach the next level of authority should some of the consumer s credit agreement not qualify for the debt intervention? Who may prescribe this information? Will it be the Minister /the Regulator /the Tribunal or the Courts? This may also give guidance to the presiding officer on what information to consider.
COMMENTS ON DRAFT NATIONAL CREDIT AMENDMENT BILL, 2018 AND THE MEMORANDUM ON THE OBJECTS OF THE BILL Section Issue: Recommendation Paragraph 14, Section 88B (1)(a) One is of a view that debt intervention applicants are financially strained, hence the application for debt intervention. Time lines be prescribed on when proof of receipt of an application may be provided by the National Credit Regulator? It might therefore be costly for them to follow-up with the National Credit Regulator to ascertain whether their application has been received.
COMMENTS ON DRAFT NATIONAL CREDIT AMENDMENT BILL, 2018 AND THE MEMORANDUM ON THE OBJECTS OF THE BILL Section Issue: Recommendation Paragraph 14, Section 88B (1)(b) One is of a view that debt intervention applicants are financially strained, hence the application for debt intervention. Time lines be prescribed on when will the National Credit Regulator notify the relevant credit providers and credit bureaux. It might ease the pressure of them to know when with the National Credit Regulator notify the relevant credit providers and credit bureaux.
COMMENTS ON DRAFT NATIONAL CREDIT AMENDMENT BILL, 2018 AND THE MEMORANDUM ON THE OBJECTS OF THE BILL Section Issue: Recommendation Paragraph 14, Section 88C (9) To avoid uncertainty or unreasonable delay in setting the application down for consideration, guidance on when is the reasonable period will be appreciated. The period for setting the application down for reconsideration should be prescribed.
COMMENTS ON DRAFT NATIONAL CREDIT AMENDMENT BILL, 2018 AND THE MEMORANDUM ON THE OBJECTS OF THE BILL Section Issue: Recommendation Paragraph 14, Section 88D (6) (b) Any credit provider impacted by the debt intervention order is somehow negatively impacted by this, which leads to prejudice to that credit provider as their income is jeopardized. This subsection should be extended to any credit provider impacted by the debt intervention order should such a credit provider reasonably believe that the financial circumstances of the debt intervention applicant has improved.
COMMENTS ON DRAFT NATIONAL CREDIT AMENDMENT BILL, 2018 AND THE MEMORANDUM ON THE OBJECTS OF THE BILL Section Issue: Concern/ Recommendation Paragraph 23, Section 157C (2) (a) Consumers who are granted credit by unregistered credit providers should be protected. What would be the outcome should the application not be granted? Should the application not be granted, such an unregistered credit provider should suffer the consequences. This condition be subject to the application being granted.
COMMENTS ON DRAFT NATIONAL CREDIT AMENDMENT BILL, 2018 AND THE MEMORANDUM ON THE OBJECTS OF THE BILL THANK-YOU
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