The South African Communist Party (SACP) has threatened to embark on mass action if the Banking Council of South Africa continued to oppose the implementation of the Community Reinvestment Bill.
”As the SACP, we are ready to mobilise our people in support of the Community Reinvestment Bill and against the position of the banking council,” representative Mazibuko Jara said on Wednesday.
The bill aims to force banks to provide housing to the poor in disadvantaged areas. It also outlaw redlining — the banking practice of drawing a red line around specific geographic areas in which they are not prepared to lend money.
Jara said it was arrogant for the council to question housing minister Brigitte Mabandla’s decision to proceed with the finalisation of the bill.
”Any delay in the bill will maintain apartheid and class inequalities in housing finance,” Jara said.
The banking council has said that Mabandla’s insistence on pushing the bill through by year-end was unhelpful, as new disclosure laws put in place by the housing department had not yet been implemented by government.
The council said the Housing Loan Disclosure Act was passed in December 2000 but had not come into force as yet. The council supports this act, which is designed to enable government to monitor home loan lending trends within banks by forcing them to reveal to whom they are lending.
However, Jara has accused the council of being insensitive to the needs of the poor.
”The council has previously argued that government should provide low-rental accommodation for the poor, but has not played the role required to finance such a move. Anyway, rental stock is not a substitute for direct home-ownership,” he said.
Jara urged the banking council to engage with the minister and other social partners towards the finalisation of the bill.
”Any delay in the bill could allow financial institutions to repeat their failure to provide finance for housing development,” he said.
The Community Reinvestment Bill would transform and diversify the financial sector. Any community reinvestment legislation must have teeth and sufficient powers to compel financial institutions to contribute to socio-economic development, he added.
Therefore this bill must not only outlaw redlining but it must also set minimum percentages required for community reinvestment by each financial institution in previously disadvantaged areas,” Jara said. – Sapa