The Credit Bureau Association (CBA) has come out in support of a regulatory framework for credit bureaux, saying on Wednesday that it is working with the government on the matter.
It said it wants a clear and unambiguous set of rules that both addresses the legitimate grievances of consumers and allows for an environment conducive to the effective operations of the business of credit bureaux.
”Credit bureaux … play a vital role in facilitating access to credit and it is in the interest of all stakeholders … that a legal framework does not impede the effective operations of a credit bureau,” CBA executive director Ashina Singh said in a statement.
Last week, some credit bureaux accused the government of wanting to abolish them, saying the draft National Credit Bill’s aims are ”totally unrealistic”.
They claim the Bill makes provision for consumers to gain access to their own credit information free of charge and allows the minister of trade and industry to levy fees on credit bureaux at his discretion.
”To expect us to make this information available free of charge to individuals is just totally unrealistic,” said Fred Steffers, MD of Consumer Profile Bureau.
He said credit bureaux incur ”significant” costs to obtain, store and manage credit information on the 15-million economically active South Africans.
”The Bill is in circulation for [public] comment, and our reading of it is that it is going to damage the industry.”
Steffers said speculation is rife among bureaux that the Bill is an ”attempt by the Department of Trade and Industry to … clear the way for their abolition”.
Call for amnesty
Earlier this week, the Financial Sector Campaign Coalition called on the government to grant amnesty to the millions of people blacklisted by credit bureaux.
It also condemned criticism by credit bureaux that the Bill is unrealistic or would damage credit bureau businesses.
Singh said on Wednesday the primary aims of the Bill are to prevent irresponsible lending and overindebtedness.
Members of the CBA include TansUnionITC, Compuscan, Nedbank and First National Bank.
Meanwhile, the South African Communist Party has called on Parliament and provincial legislatures to convene public hearings on credit bureaux.
”We have received hundreds of complaints about how credit bureaux violate privacy rights and administrative justice procedures.
”The conduct of privately owned and publicly unaccountable credit bureaux is a national crisis,” SACP spokesperson Mazibuko Kanyiso Jara said in a statement on Wednesday.
He said the hearings must address the conduct and functions of credit bureaux, their relationship with banks and creditors, and the constitutionality and legality of the practices and conduct of credit bureaux.
”We further call on the workers and the poor of our country to buttress this call by ongoing mass mobilisation and pressure directed at credit bureaux, banks and the insurance industry, which continue to profit through exploitation of millions of our people,” Jara said. — Sapa