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National Credit Regulator 77 days = progress, priorities Gabriel Davel August 2006

National Credit Regulator 77 days = progress, priorities Gabriel Davel August 2006. Significance of the Act = Rationale for Regulator. Act will drastically affect the credit market Current position not sustainable

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National Credit Regulator 77 days = progress, priorities Gabriel Davel August 2006

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  1. National Credit Regulator 77 days = progress, priorities Gabriel Davel August 2006

  2. Significance of the Act= Rationale for Regulator Act will drastically affect the credit market Current position not sustainable Undesirable practices …. damage to consumers … & little relief in current, outdated, legislation Which undesirable practices ? • blacklisting; negative option selling; reckless lending • extreme interest rates; credit life insurance … & misleading disclosure • extreme over-indebtedness … no effective debt rehabilitation … payroll deductions & garnishees … & inflated debt collection charges

  3. General philosophy regarding implementation of Act Effective implementation critical & not negotiable • Huge responsibility; major legislation; major impact • limited discretion … no “negotiation on compliance” BUT: Co-operation critical for effective implementation Progress • Overall, outstanding co-operation, most parties extremely co-operative • … although we are preparing for at least a few of major legal challenges

  4. New Premises = Midrand, next to N1, NewRoad Exit Date of Inauguration = 30 August 2006

  5. Implementation of Act Registration • 3061 applications received within deadline • 3262 applications received to date • Letter of acknowledgement = temporary registration • Incl. 24 banks; all 4 big Insurance companies + short-term + big employers • Prioritize credit bureaus • stuff are we seeing; people that are trying to avoid / circumvent Transitional issues • Usury Act & Credit Agreements Act remain binding until Credit Act’s 1 June effective date • NCR responsible for enforcement

  6. Web Site = www.ncr.org.za Radio = 27 (+53 s/bytes) TV = 6 Print = 44 R2.6million of exposure created Workshopscommunity focus = 27 industry = 20 Awareness creationSynchronize with effective dates of different chapters

  7. Debt Counsellors Requirements of Act • S129 & S130: Notice & Magistrate Court Procedure • Debt Counselling, Debt Restructuring & Court Order Biggest single challenge in Act • achieving national coverage; 1st target = major metropolitan centres & access nationally • Training outcomes finalised, material being developed & training institutions being selected • Significant time and resources into this area Significant uncertainty • 80,000+ debt judgments per month  how many over-indebted ?  how many will seek assistance ? We’ll get there … or die trying !!

  8. Conclusion Priorities next 9 months:- • Action against reckless lending under Exemption notice • Credit bureaux compliance • Continued engagement with industry in getting ready for 1 June 2007 • Massive effort in creating debt counselling capacity Conclusion:- No significant problem in contents of the Act = no reason why it should not be fully and effectively implemented A luta continua ! A victoria e certa ?!

  9. Prosecutions Education Complaints Registrations CEO CEO Finance NCR Management Team Credit Information Rashid Ahmed Staff: 60+ Female: 61 % Black: 83%

  10. Thank You !

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