Credit providers and credit bureaux have until July 28 2006 to register with the newly created National Credit Regulator (NCR), the body said in a statement on Wednesday.
“It will therefore be an offence for credit providers and credit bureaux to conduct any business after the closing date if they are not registered with the NCR,” said Nomsa Motshegare, the registration manager.
Motshegare says this requirement is in keeping with the provisions of the National Credit Act, which was signed into law by President Thabo Mbeki early this year.
“According to the National Credit Act [Act No 34 of 2005], all credit providers and credit bureaux must register with the National Credit Regulator within 40 business days from June 1 2006,” explained Motshegare.
Among other things, the NCR is responsible for the regulation of the South African consumer credit industry.
Motshegare stressed that “time is of the essence”.
In order to spread the message of the urgent need for registration, Motshegare says the NCR has had meetings with some of the associations of credit providers.
“We will be publishing a notice in the various newspapers this week to alert the credit providers and credit bureaux. We will also be conducting workshops with credit bureaux and registered professionals on July 3 and 4 respectively,” says Motshegare.
The National Credit Act which came into being on June 1 and replaced the outdated Usury and Credit Agreement Acts covers all types of credit from microlenders and pawnbrokers to banks and retailers.
Key features of the Act are to ensure that interest and fees are regulated and the advertising and marketing for credit must contain prescribed information on the cost of credit.
The Act places a number of obligations on credit providers, including serious penalties for approving loans that result in a borrower being over-indebted. The Act also seeks to promote responsible credit granting and use, and for that purpose to prohibit reckless credit granting. A number of obligations are also placed on credit bureaux and debt counsellors to comply with the Act and its regulations.
Furthermore, this new regulatory regime aims to improve the understanding and knowledge of the market by informing and educating consumers to enable them to make informed choices, the NCR said. – I-Net Bridge