The Subcommittee met briefly to formalise the items for which there was no consensus. These included:
• the right of the consumer to apply for credit during the suspension period
• prescription and constitutional concerns;
• reporting on reckless lending by both debt counsellors and credit providers;
• whether suspension by the NCR should be retained;
• on rehabilitation, should the debt include interest incurred during the rehabilitation process.
These clauses would be voted on in the next meeting of the Portfolio Committee on Trade and Industry.
The Subcommittee on the National Credit Amendment Bill went through the clauses that the 16 March Portfolio Committee meeting had not achieved consensus on.
Adv Charmaine van der Merwe, Senior Legal Advisor at Parliament, led the deliberations on these points:
• The period during which the right of the consumer to apply for credit during the loan suspension or rehabilitation would be limited. The Bill makes it discretionary up to 36 months. Some Members had referred to the fact that ten years was applicable to consumers who were under sequestration for owing millions. Two years of rehabilitation were suggested, and limiting the right to apply for credit should be mandatory;
• The rest of the subclauses under section 88F should be removed and only exogenous shocks to the economy and national disasters should be retained;
• Reporting on reckless lending by debt counsellors and credit providers. If debt counsellors must report reckless lending, this would have cost implications and it would extend the period of debt intervention. There was no problem with it being anti-competitive and it would not be self-incrimination. If credit providers were required to report themselves that could mean self-incrimination and bring constitutional problems.
• If suspension by the NCR should be retained due to the concern that the NCR cannot police and judge on the same matter. The NCR had proposed that there was already a compliance order mechanism in the Act. However, it was only effective if the credit provider agreed with the compliance order. The NCR indicated that it would look at a mechanism to address compliance order that were contested expeditiously;
• If a rehabilitated consumer whose circumstances have changed and is able to honour the credit agreements, should it be the balance of debt as of the debt intervention application date or the amount owed as though the order was never granted i.e. interest continued to be incurred during the rehabilitation period.
The Chairperson stated that this ends the Subcommittee meetings. The Portfolio Committee will next meet on the Bill and Members will have to vote on the clauses where consensus has not been reached.
The meeting was adjourned.
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