The National Credit Amendment Bill (“the Bill”) which was presented in the National Assembly, but not yet enacted, proposes to fundamentally change the credit industry by imposing stricter requirements on credit providers and granting greater protection for consumers.

Many consumers are mistaken in believing that the credit amnesty means that they need not repay their debts.

Although the amnesty shows a change in the type of information credit bureaus retain about a consumer’s payment history, there will still be information for credit providers to use.

The main aim of the Bill is to reduce reckless lending.

The Bill provides for the removal of the National Credit Regulators board. The regulator will therefore account to the Minister of Trade and Industry directly.

Further important provisions are as follows:

  • All credit providers are required to be registered and regulations governing the affordability criteria have been introduced. Currently, the affordability assessments are self-regulated and only credit providers with more than 100 credit agreements are required to be registered;
  • Adverse credit information may be removed as soon as the credit provider submits proof that the debt has been paid. The Removal of Adverse Consumer Information and Information Relating to Paid up Judgements Regulations, 2014, also provides for the removal of information and specifies which information is to be removed.
  • The sale, collection and re-activation of debts that have been extinguished via prescription is banned. This is likely to severely affect debt collection agencies;
  • The Minister may cap the interest charged in the regulations.

The Bill therefore provides for much tighter oversight and stricter standards in credit provision.