Draft credit laws open for comment

DRAFT regulations on the affordability assessments credit providers will have to conduct before they grant credit have been published by the Department of Trade and Industry (DTI) for public comment.

In addition to affordability assessments‚ the draft regulations deal with payment distribution agents‚ retention periods for credit bureau information and the listing of adverse information to the credit bureaus

The assessments have been tightened in a bid to limit reckless lending and borrowing‚ which has resulted in a sharp rise in unsecured lending in the past. They contain the criteria to which credit providers must adhere before credit can be extended to consumers. They also make provision for the registration requirements of payment distribution agents.

Applicants for registration as distribution agents must have a minimum capital amount of R5-million for investment in the establishment and operation of their business and must pay a registration fee of R100000 and an annual renewal fee of R100000.

The draft national credit regulations were published under the National Credit Amendment Act‚ which was signed into law by President Jacob Zuma on May 19. They have been published in the government gazette and are open for comment for 30 days until the end of August.

"The affordability assessments contain principles intended to address the underlying weaknesses in affordability assessments‚" the National Credit Regulator said. It was working with the DTI to complete the remaining regulations on code of conduct‚ cost of credit and caps on credit insurance. – BDlive