Before june 2006, credit law in south africa was governed by the usury act 73 of 1968 and the credit agreements act 75 of 1980. This gazette is also available free online at za staatskoerant, maart 2015 no. According to the south african national consumer protection act cpa, which came into effect on 1 april 2011, consumers have the right to accessible knowledge and facts necessary to make informed decisions, protecting them from misleading marketing. National credit amendment act 7 of 2019 english isizulu.
We are the leading resource for freely available legislation in south africa and are used daily by thousands of professionals and industry leaders. Micro finance south africa and the minister of trade and industry and the. National credit act 34 of 2005 south african government. To provide for the regulation of certain transactions in terms of which movable goods are purchased or leased on credit or certain services are rendered on credit. Historical background of the national credit act nca. Pdf south africa continues to exhibit high levels of debttodisposable income along with a high number of impaired credit records. To promote black economic empowerment and ownership within the consumer credit industry. It is tasked with carrying out education, research, policy development, registration of industry participants, investigation of complaints, and ensuring. A defence debtors often raise is that the credit provider is not registered as such in terms of the act, making the particular credit agreement void, absolving the debtor from the obligation to. The effect of the national credit act, 2005 on home loans. The application of section 85 of the national credit act saflii. It is tasked with carrying out education, research, policy development, registration of industry participants. Section 401 previously stated that a person or entity was required to register as a credit provider if. A selected case in south africa article pdf available july 2015 with 92 reads how we measure reads.
Consumer protection act, no 68 of 2008 legal legal and. In the recent constitutional court judgment of nkata v firstrand bank limited and others the socioeconomic rights institute of south africa as amicus curiae cc unreported case no cct732015, 2142016 moseneke dcj, the provisions of s 129 of the national credit act 34 of 2005 nca were, once again, put under scrutiny. This information is of importance to south african citizens requiring debt consolidation, debt management or require the services of a debt counsellor. National credit act the banking association south africa. Pdf the effect of the national credit act, 2005 on home. The national credit act of 2005 introduced the process as an alternative to sequestration. These two acts were replaced by the national credit act, which codified several basic rights that the consumer has with regard to the credit market. The ncr is responsible for the regulation of the south african credit industry. Micro finance south africa and the minister of trade and industry and the national credit regulator 21 november 2016 7mb pdf the implementation of the new regulations dealing with the fees that short term credit providers must use in terms of the regulations were set aside insofar that it relates to shortterm insurance. Act 34, the national credit act, details the guidelines for credit management within the industry as well as dealing with different elements of credit.
Draft national credit amendment bill, 2018 released 360kb pdf. A defence debtors often raise is that the credit provider is not registered as such in terms of the act, making the particular credit agreement void, absolving the debtor from the obligation to repay the debt. Dr rob davies mp minister of trade and industry date. The national credit act act 34 of 2005 was drawn up to ensure consumer protection and industry standards within the credit world and as a result, instigated the creation of the national credit regulator. Application the act applies to all credit agreements within the republic involving. Sep 23, 2015 national credit regulator ncr complaints regarding abusive credit practices can be referred to the national credit regulator which is empowered under the national credit act to act. This is why we thought it would be necessary to inform you about the national credit act. Protection offered by s 129 of the national credit act. This entry discusses the core elements of credit agreements as defined in the national credit act, and the consequences of concluding a credit agreement in south africa. Created and implemented to promote a fair and nondiscriminatory marketplace, allowing a.
It is likely to reduce undesirable credit practices significantly, but it may take some time for the financial system to adjust and then expand under the new law. Of section 8610 of the national credit act and the right of a credit provider to enforce its claim standard bank of south africa ltd v kruger unreported case number 4543809 gsj and standard bank of south africa ltd v pretorius. However, in june 2006, these two acts were repealed to make way for the national credit act 35 of 2005. National credit act new affordability assessment regulations. The national credit act overview deloitte united states. This act constitutes an overarching framework for consumer protection, and all other laws which provides for consumer protection usually within a particular. The consumer protection act, 2008, no 68 of 2008 was signed into law on 24 april 2009. The national credit act requires certain categories of money lenders to register as credit providers in terms of the act.
The national credit amendment act 7 of 2019 intends. Whereas the purpose of the national credit act, 2005 act no. In general terms, the national credit act the act aims to transform the south african credit market and all credit providers are required to comply with the act. Credit agreements act 75 of 1980 namibia legal database.
Debt counsellors, who must be registered with the national credit regulator ncr, assess their clients. To amend the national credit act, 2005, so as to provide for debt intervention. E it enacted by the parliament of the republic of south africa, as. The national credit amendment bill is now set to become law. The national credit act brings south africas credit legislation on par with similar legislation in developed countries. The aim behind the nca is to promote and advance the social and economic welfare of south africans, promote a fair, transparent, competitive. The purpose of the nca are to promote and advance the social and economic welfare of south africans, promote a fair. Until recently, the two most important acts governing the credit law in south africa were the usury act 73 of 1968 and the credit agreements act 75 of 1980. The national credit act and its regulations in the context of. National credit act to promote a fair and non discriminatory marketplace for access to consumer credit to promote responsible credit granting and use and for that purpose to prohibit reckless credit granting. The impact of the national credit act on household debt. The national credit adviser the nca national credit adviser. The national credit act and its regulations in the context of access to finance in south africa.
The act sets out the minimum requirements to ensure adequate consumer protection in south africa. Act 34 national credit act 34, the national credit act, details the guidelines for credit management within the industry as well as dealing with different elements of credit. With regard to new credit regulation in south africa, mr. Acts online provides legislation, including amendments and regulations, in an intuitive, online format. The national credit act, no 34 of 2005 act has gone a long way to protect the rights of consumers. The act aims to promote responsible credit granting and use, and for that purpose prohibits reckless credit granting by credit providers. Consumer protection act 68 of 2008 saflii home saflii.
Section 61 the right to be given reasons for credit being declined the national credit act gives a consumer, whose credit application has. The national credit act 34 of 2005 nca in modern south africa, has been the focus of many legal cases, mostly dealing with the interpretation of its meaning, one of the largest contributors being the provisions of s 1291a. We identified three priority areas for potential support to consumers, being a a national campaign to provide consumers with relevant information and advice, b specific. The banking association of south africa basa said in a statement that by making provision for the arbitrarily expunging of debt, the act effectively prevents banks from extending responsible. The effect of the national credit amendment act and the new regulations in determining whether a person or entity must be registered as a credit provider, chapter 3 of the act is relevant. To promote a fair and nondiscriminatory marketplace for access to consumer credit and for that purpose to provide for the general regulation of consumer credit and improved standards of consumer information. The act is, however, applicable to all credit providers, even those who are exempt from registration this category has, in light of recent amendments, been drastically narrowed. Introduction the usury act, 73 of 1968 and the credit agreements act, 75 of 1980, has been the cornerstone of consumer credit in south africa for the last thirty odd years. Credit agreements in south africa are agreements or contracts in south africa in terms of which payment or repayment by one party the debtor to another the creditor is deferred. These lations will come into effect on the date of publication. South africa introduced national credit act 34 of 2005 in order to regulate the. The interpretative and practical implications of 173 sectionsits, the schedules and regulations are still being seen and will be seen for many years to come, especially as the legal environment absorbs various amendments and regulations in relation to the act. Created and implemented to promote a fair and nondiscriminatory marketplace, allowing a full range of consumers with the chance to take credit. Pdf the national credit act and its regulations in the.
Of section 8610 of the national credit act and the right of a credit provider to enforce its claim standard bank of south africa ltd v kruger unreported case number 4543809 gsj and standard bank of south africa ltd v pretorius unreported case number 3905709 gsj 1 introduction. The national credit act provides every person, whether an individual, a group of people or a company, has the right to apply for credit from any credit provider. The national credit act 34 of 2005 the nca came into effect on 1 june 2007 and in doing so replaced the usury act, 73 of 1968 and the credit agreements act, 75 of 1980 as the founding legislation regulating consumer credit in south africa. Africa recently introduced national credit act nca 34 of 2005 in order to regulate the credit industry, protect credit consumers from becoming overindebted2 and ensure that all credit consumers are dealt with in a consistent manner. With legislation to ensure all is fair in debt and credit, it follows certain key points as guidelines. Pdf measuring the effect of the national credit act on indebtedness. Pros and cons of national credit amendment bill explained.
The research will rely on previous literature and use time series data extracted from the south african reserve bank to complete regression analysis. It is interesting to note that in the case of the national credit act, provisions conflicting with these other pieces of legislation, the provisions of the national credit act will prevail. Paul green, durban university of technology, south africa. With acts you are guaranteed the latest and most up to date resource for your legislative needs. To promote a fair and nondiscriminatory marketplace for access to consumer credit and for that purpose. National credit act, vecm, south africa, household debt, reckless lending department of finance, banking and risk management, university of south africa, p o box 392, unisa, 0003 tel. Pdf enactment of the national credit act and its implication on. This article originally appeared in property power 11th edition magazine. The national credit act nca1 came into operation at a time when consumer laws were somewhat unheard of in south africa. The national credit act the act applies to all consumer. It therefore enacted by the parliament of the republic of south africa. To provide for debt reorganisation in cases of overindebtedness.
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