Order! Just before hon Dikgale speaks, I want to introduce a new member who has recently joined us, so that you know that we have a new member or face in the House. His name is Stanford Makashule Gana, from the DA. He comes from Gauteng province and replaces Beverly Abrahams. He was sworn in as a member of the Council in my office this morning. He is now a member of the NCOP. [Applause.]
Hon Chairperson, hon Minister, hon Members of the Council, guests in the gallery, I want to say this to hon Mnguni: Even though you are sitting next to the man who replaced our woman, please keep on doing the job; we also need him in the ANC. [Laughter.]
Hon Chairperson, one of the distinguishing characteristics of the ANC-led government is its caring for the vulnerable people of our society. Our government is determined to eradicate poverty. It is beyond contention that poverty eradication attempts would prove vacuous and hollow if we did not secure the most vulnerable people from debt entrapment.
It is a historical fact that the apartheid dispensation and its economy were driven, in the main, by rural underdevelopment and racial economic exclusion. Rural areas were deemed to be labour reserves from which the able-bodied were transported in droves to urban areas as cheap labour and exploited until they were of no use to the exploitative industrial bosses, either because of sickness or old age.
Upon the depletion of their strength, they would be returned to the rural areas in a state of unconscionable poverty to be cared for by their struggling families.
It is thus common cause that the rural areas remain the most underdeveloped and economically marginalised in our country. The reversal of the legacies of poverty, unemployment and income inequality - I call them the three devils - has to be targeted, in the main, in rural areas. It is the rural poor who find themselves irreversibly indebted and thus rural economies remain underdeveloped.
Many credit providers continue to extend expensive credit to poor people in the rural areas without conducting proper affordability tests. As a result many poor people become increasingly overindebted and have impaired credit records. The impairment of credit records deepens the crisis our people find themselves in, as they not only lose access to credit but also to employment.
We welcome the provision in the Bill that allows for the automatic removal of adverse credit information upon the consumer repaying the owed debt to the creditors. It is the direct opposite of the current situation in which payment of debt does not offer automatic removal from the adverse credit information record.
In other words, even though a consumer may have paid all his or her debt, they continue to be barred from free participation in the country's commerce. Surely the current situation is not only harsh, but for all intents and purposes it is also unreasonable and cannot be justified in a caring society, underpinned by the spirit of ubuntu.
It is fallacious to assume that equality before the law, guaranteed by section 9(1) of our Constitution, translates into the consumer being on an equal footing with credit providers. Many of our people who procure credit do so under the pressure to relieve immediate needs and thus find themselves falling prey to unscrupulous and at times unauthorised credit providers.
We therefore welcome the strengthening of the powers of the National Credit Regulator to ensure more efficient regulation of the industry. In the same way, we welcome the enhanced ways of dealing with reckless lending and the penalties that will be handed down to offenders.
Rural economic development is often slowed down by the lack of capacity of the rural consumer to participate in the economy. As I have mentioned above, the listing of poor people and unemployed people in adverse credit records not only prevents them from accessing credit but impedes them from eligibility for employment. It is a vicious cycle of underdevelopment that feeds on itself to the detriment of the poor.
Therefore, the powers that are being vested in the National Consumer Tribunal to declare a credit agreement reckless will protect the vulnerable people of our society from increasing poverty. In this regard, rural economies will also be strengthened by the more enhanced buying power of its general population as the majority will be employable and brought into the centre of economic activity.
The rule of law requires that creditors institute action in view of collecting debts against debtors within a given timeframe. By law, if a debt is not collected within a given period of time, such debt is extinguished by prescription. However, many credit providers have conducted, and continue to conduct, the business of selling prescribed debt and thus burdening the consumer with exorbitant repayment amounts as the debt-collecting agents add their own charges, compounded with interest accumulated on the principal debt over the years.
Many poor people continue to lose their assets and fall deeper and deeper into poverty because of such unconscionable activities. We therefore welcome the prohibition of sale of prescribed debt, which ensures that the law is upheld. This has the effect that prescription of the debt owed releases the consumer from the payment of such debt. In conclusion, our role as representatives of the people is not only to ensure economic growth through supporting our government to create favourable conditions for commerce and foreign direct investment. Our mandate must fundamentally be informed by the purposive interpretation of our Constitution of creating an equal society in which fundamental human rights are protected and freedom for all is advanced.
We are therefore enjoined to protect the vulnerable in our society. Perhaps it is time that we also re-examine our jurisprudence or legal philosophy as well as our common law in relation to how they treat poor and vulnerable people.
Perhaps our approach must not be informed so much by the need to protect those who do business by ensuring ease of collecting the return on their investments, even at the expense of the human dignity of those who enter into agreements with them in good faith. It is high time that our history of underdevelopment and economic exclusion directs how the poor people are treated by the law.
We support this Bill because it restores the dignity of the poor and marginalised people. It is a Bill that will enhance the economic activity of rural economies by removing the stranglehold of adverse listings on poor people.
This is a Bill that will ensure that those who seek to ensnare and entrap the rural poor in a web of debt are penalised. It is a Bill that will limit the propensity of a number of credit providers to engage in reckless lending.
Indeed, for the first time, we move South Africa forwards to a future in which payment of one's debts will result in automatic removal from bad- record listings and the freedom to engage in commerce. This amnesty means more to poor people in general and to the rural poor in particular. Thank you. [Applause.]
Chairperson, hon Minister and hon members, the financial industry in South Africa, led by the Reserve Bank and commercial banks, has a credible reputation. In fact, the banking system in South Africa is recognised as one of the best.
However, the situation in terms of the needs on the ground differ very much from this reputable and technologically advanced system. According to the National Credit Regulator, NCR, over 9 million people have more debt than they can afford. More than 16 million people have impaired credit records, which means they have fallen behind with payments, they have stopped paying or they might even be blacklisted.
Poor South Africans are exploited by credit providers and too many are bullied by reckless lenders and loan sharks. Consumers are charged very high interest rates, handling fees and additional premiums for credit insurance. Unfortunately, the risk profiles of consumers are not considered. Therefore, the cost of credit leaves many poor people with having their property confiscated. They lose control of their personal finances by handing over their bank or social grant cards to loan sharks although this is illegal. They are often bullied into signing voluntary garnishee orders.
It became necessary to protect vulnerable communities by placing obligations on the industry rather than to prescribe to consumers when credit transactions may be entered into. It became necessary to plug the loopholes in legislation, especially in the micro-lender and credit- provider sector, to stop unfair, discriminatory and unreasonable credit- providing practices. It became necessary to apply the same responsibilities of the top end of the credit market to the bottom end too.
In the proposed amendments, the NCR is empowered to ensure that the whole industry complies with the same principles and requirements in law when dealing with consumers and their right to protection. The amendments also provide for the structuring, organisation and operation of the National Consumer Tribunal.
The Minister ran through many of the amendments in the Act and I would like to add to and discuss the impact of these amendments as follows. The provision for registration and voluntary cancellation of all payment distribution agents should stop informal, unprincipled and illegal operations. Measures relating to debt councillors and the conduct of their practices will be tightened.
The removal of adverse credit records of a consumer under debt review or debt-rearrangement agreement will be removed once the debtor has met all payment obligations or has been rehabilitated. The primary home of a consumer is protected when distress debt must be evaluated and rearranged under the debt review process.
To address irresponsible granting of credit, lenders and credit providers will have to consider the affordability of credit to consumers through affordability assessment regulations. All credit providers, even micro- lenders and loan sharks, must register to comply with the relevant requirements. The process for proper consideration for restructuring of distress debt is required to assist consumers to be able to meet their obligations.
Debt councillors will be obliged to issue rehabilitation certificates once a consumer has complied with the requirements of the rearranged debt agreement. The amendments also provide for the capping of costs, interests, levies and credit insurance via regulations by the Minister of Trade and Industry in consultation with the Minister of Finance. We request the Minister to be sensitive when issuing regulations to protect the industry from consequential damage. It was agreed that such regulations will be submitted to Parliament for oversight prior to publication.
The proposed amendments to the National Credit Act are in support of a reliable and credible industry in order to optimally support and protect consumers. Ultimately, responsible consumer spending through credit agreements can contribute to economic growth and job creation.
In closing, I would like to thank Minister Davies; Director-General Lionel October; Deputy Director-General Ntuli, who is also present today; the Department of Trade and Industry's parliamentary liaison officer, Saroj Naidoo; and, in particular, Justice Mokoena. Thank you to the other DDGs and Department of Trade and Industry staff. It has been an amazing five years and we wish to congratulate the department on its performance.
We also wish to thank the select committee chairperson, hon Dumisani Gamede, for the role he has played, not only with this legislation but over the five years. Thank you. [Applause.]
Hon Chairperson, hon Minister, hon Chief Whip, hon members of this House, comrades and friends, credit is one of the cornerstones of the modern financial system. It lubricates the economy and promotes commercial activity. However, credit enables people to spend money they don't have and more money than they earn. They use credit for ordinary purchases, even when they have cash. They use debt to pay off debt.
Credit is often used by poor people who don't have financial management skills. This leads them into a situation of overindebtedness, where they are unable to service credit agreements.
The complex nature of credit agreements renders many consumers vulnerable and often exploited by credit providers. This led to the establishment of the National Credit Act. The Act, like other pieces of legislation such as the Financial Advisory and Intermediary Service Act of 2002, and the Financial Intelligence Centre Act of 2001, which affect the financial services industry, helps to enhance control for better or more responsible credit practices in the credit industry.
The National Credit Act was the subject of intensive consultation and is arguably one of the best-researched pieces of legislation to be introduced into our law. The Act comprehensively regulates the credit industry and profoundly changes and codifies much, if not all, consumer credit law. The Act also introduced new concepts to our law, such as affordability, reckless lending and debt counselling.
Among a long list of abuses, the Act targets incorrect credit information; exploitative interest rates, fees and charges; abusive collection charges; discriminatory credit granting and lending without regard for a borrower's ability to repay.
The NCA has updated areas of the law that were contained in the Credit Agreements Act, the Usury Act and elsewhere and that were cumbersome, unintelligible, ineffective, subject to abuse or just obsolete.
The specific objectives of the Act are inter alia:
to promote and advance the social and economic welfare of South Africans; promote a fair, transparent, competitive, sustainable, responsible, efficient, effective and accessible credit market and industry, and to protect consumers by
a) promoting the development of a credit market that is accessible to all South Africans and in particular to those who have historically been unable to access credit under sustainable market conditions.
Terms such as "overindebtedness" and "reckless lending" are key concepts, which have changed the basis on which credit is granted and go far beyond simply checking the credit records.
The National Credit Act of 2005 was part of a comprehensive legislation overhauling by the ANC government, designed to protect the consumer in the credit market and make credit and banking services more accessible. The Act was introduced, and I quote:
To promote and advance the social and economic welfare of South Africans; to promote a fair, transparent, competitive, sustainable, responsible, efficient, effective and accessible credit market and industry; and to protect consumers ...
The purpose of the National Credit Act is therefore to promote a fair and nondiscriminatory marketplace for access to consumer credit, to regulate consumer credit, to improve standards of consumer information and to prohibit certain unfair credit and credit marketing practices.
Regulation of the consumer credit market is one of the constitutional imperatives advocated by the Constitution of the Republic of South Africa. The ANC believes that at the heart of the prohibition of unfair discrimination lies the recognition that the purpose of our new constitutional and democratic order is the establishment of a society in which all human beings are accorded equal dignity and respect, regardless of their membership of particular groups.
The ANC also believes that all citizens of South Africa, at present and in future, have the right to a life of wellbeing. On the 20th anniversary of our freedom, there can be little argument that the human-rights values underpinning our democratic dispensation have become increasingly entrenched with the passage of time.
More and more of our people have come to rely on and assert their rights, which have been placed within their grasp by the ANC government, through the broad objectives of the ANC's financial and economic policies, aimed at fulfilling these rights in accordance with constitutional imperatives.
Since the coming into operation of the National Credit Act of 2005, there have from time to time been implementation and interpretation challenges in respect of credit regulation. These challenges necessitate amendments to the Act in order to ensure proper and better implementation of the Act and to ensure certainty and clarity where the Act seems to create uncertainty. The main objective of the National Credit Amendment Bill is to address the implementation challenges that have materialised.
It is acknowledged that one of the key areas requiring attention is reckless lending. The Bill seeks to develop and nurture an environment that balances responsible lending and borrowing with access to affordable credit.
The key amendments that would change the lives of our people, who are dependent on credit for their sustainable livelihoods, are to be found in clauses of the Amendment Bill. It would allow the Minister to require all credit providers to register and empower him to issue affordability assessment regulations that provide for a debt counsellor to issue a clearance certificate if the consumer has satisfied all the debt obligations as prescribed.
It would provide for the automatic removal of consumer credit information and for a registered auditor to confirm that consumer credit information has actually been reviewed, verified, corrected or removed. It would also empower a person to submit a complaint concerning allegations of a reckless credit agreement to the National Credit Regulator.
It has been far too easy for credit providers to simply provide credit and easy loans without considering the effect of their actions on overindebted communities. The National Credit Amendment Bill will certainly go a long way in restoring economic freedom and economic independence to an important part of our population.
In conclusion, it is not child's play to be a member of the NCOP. As you can see, members of the NCOP are committed to taking South Africa forwards. They are under pressure with regard to Bills and don't resist. Because of your leadership, they work day and night.
In South Africa, people are waiting for 7 May 2014 to cast their votes for the ANC so that the ANC can govern forever ...
... tot Piet kom. [... until Peter comes.]
Let us join hands together with the other political parties ...
Hon member, your speaking time has expired. Finish the remaining sentence.
Laat ons almal Suid-Afrika vorentoe neem. [Let all of us take South Africa forwards.]
Chair, thank you so much for your leadership and thank you, my chairperson, Comrade Gamede. [Applause.]
Hon Chairperson and hon Minister, it is appropriate that we debate these specific amendments in this Bill whilst celebrating 20 years of democracy. I still remember the day when the hon Gamede, the chairperson of our committee, had a discussion with me and asked why there could be amnesty for people who killed each other during the struggle but we can't have amnesty for people who defaulted on credit agreements. It seems like yesterday.
Today we are here in this Council and at the core of this whole debate is a critical question. This critical question is: What type of a society are we building 20 years after democracy? The challenge remains: Do we have a strong sustainable middle class? But we know the realities. The realities are that we tend to taunt the poor and the marginalised. We need to address that.
In the context of this, a certain James Taylor once said, and I quote:
People should watch out for three things: avoid a major addiction, ...
How can I say this? To me it sounds like the DA has an addiction to opposing everything these days! [Laughter.]
... don't get so deeply into debt that it controls your life, and don't start a family before you are ready to settle down.
The unfortunate reality is that all three the issues that Taylor warned society about have become issues that modern-day society must deal with.
Worst of all, in my opinion, and of relevance to today's debate, is overindebtedness. We have come a long way since the National Credit Act came into operation. This Act, however, did not suffice and implementation challenges necessitated amendments to it.
We knew the results of the review process. It indicated that South Africa is a role model in terms of credit regulation. The National Credit Act has had a significant impact on the curbing of reckless lending. There were a number of issues that it referred to and one of them is education.
Let me say that it is shocking to see how far advertisements go to lure consumers into credit and credit agreements. Let me perhaps refer to one - and unfortunately this is an advertisement for a bank. It says if you need a loan and you earn R1 000 a month, the bank can suggest that you qualify for a loan of up to R300 000. These types of advertisements are certainly irresponsible and do not serve the cause that we want to achieve.
I want to conclude by saying that South Africa, as a developing country and as a society in transformation, needs to reform the credit industry. More than that, the government had an obligation to intervene and improve the regulatory environment governing the industry.
We all know horrific stories. I hope that this piece of legislation and the amendments will get us to the point where we can make sure that we can create a middle class that is sustainable in the modern South Africa. I thank you. [Applause.]
Hon Chairperson, hon Minister Davies, hon members and comrades, when debating this Bill it is necessary that we consciously understand the political grounding of the amending Bill, its history and the direction in which it seeks to take the financial sector of our country.
The ANC's 51st national conference in December 2002 resolved that South Africa's financial sector should play a positive developmental role by increasing economic activity through the provision of credit and efficient payment mechanisms and should support legislation on the regulation of credit bureaus, as agreed to by the Nedlac-convened Financial Sector Summit of August 2002.
The origins of the Financial Sector Summit are to be found in the Red October campaign, a campaign formulated and driven by the SA Communist Party and endorsed by multiple stakeholders, including the ANC.
The objectives of the Financial Sector Summit were to lay the basis for the transformation of the financial sector in favour of the poor; build collectivised forms of capital through structures, such as co-operatives, that represent the poor; influence community reinvestment legislation and the creation of a co-operative banking sector and other publicly owned financial institutions; convene an urgent sectoral summit on development, financing and banks; and direct investment to labour-intensive and socially desirable asset projects.
The Financial Sector Summit agreement set out clear commitments from all stakeholders to transform and diversify the financial sector. One of the key recommendations arising from the Financial Sector Summit was the regulation of credit bureaus. It called for a regulatory framework to ensure that they provide unbiased information, are open to consumer complaints and that there is no scope for discrimination.
The National Credit Act of 2005 is a product of the Financial Sector Summit and campaign - I wonder which other party can boast about products and campaigns here in this House, except for the ANC.
The principal Act protects consumers in the credit market, making credit and banking services more accessible to the masses of our people. The Financial Sector Charter and its codes, which came into effect in 2004, also address the inequalities manifest in the country's financial sector. A positive and proactive response from the financial sector through the implementation of broad-based black economic empowerment seeks to further unlock the financial sector's potential.
The reality this amending Bill seeks to address is a South African population consisting predominantly of low-income earners who have no recourse to channels of credit-granting other than micro-financiers. These micro-financiers have earned themselves a negative reputation for overpricing debt repayment and capitalising on this vulnerable market. This has, over time, resulted in a large number of consumers being heavily overindebted and unable to service their monthly debt repayments.
The National Credit Act was designed to achieve objectives to benefit and protect the consumer, to regulate consumer credit and to ensure fair and nondiscriminatory access to consumer credit and improved standards of consumer information. It also seeks to promote the responsible granting of credit and provides for debt reorganisation in cases of overindebtedness.
Importantly, the Act deals with credit providers that provide credit recklessly and suspend agreements with consumers and render the credit provider's rights under the agreement not enforceable.
In particular, the Act identified predatory marketing practices by credit providers and prohibited a credit provider from harassing a consumer, like the DA's harassment of our people: "Vote DA, otherwise your electricity will be cut." No, that is not how the ANC works. [Interjections.]
Thanks to the ANC government, the Act gave the consumer basic rights with regard to the credit market. Consumers, especially the illiterate, were placed in a position of protection from unjustifiable exploitation, exploitation like that of the DA of the people: renting a crowd for two months or a-month-and-half. [Interjections.]
It is thanks to the ANC government that the 2005 National Credit Act undoubtedly sheltered the South African economy from the effects that most countries, including developed countries, suffered during the financial crisis. The Act was lauded by the Cape editor of a South African financial daily newspaper, who stated:
South Africa's National Credit Act has attracted the attention of policy- makers worldwide who are keen to prevent the reckless lending practices that were the root cause of many of the recent bank failures.
South Africa is also the world leader in terms of policies. The ANC-led government does that. I wonder if the DA, Cope or any other party can talk about policies. They do not even have their own.
Although the Act has been successful, its implementation impact has not been without challenges and areas of improvement are still being identified to make it more effective, hence the need for a review of the policy. A draft policy framework therefore sought, inter alia, to enhance the waste of dealing ... [Interjections.]
Order! Hon member, order! Hon Faber, on what point are you rising?
Hon Chair, I rise on a point of order: The hon member is misleading the House on different points regarding the DA. [Interjections.]
The hon member started by saying electricity would be cut if you didn't vote for the DA. He also said that the DA does not have policies. I would like him to set that right please, hon Chair, as he is definitely misleading the House.
Order! I gave a ruling a long time ago in terms of misleading the House. You know my ruling on that. You can go back to the Hansard and read it. Continue, hon member. [Interjections.]
Thank you, Chair. According to the National Treasury, the key test for the National Credit Act's amendments was to give effect to new prudential regulatory objectives relating to the need for financial stability as a policy priority - meaning that no regulator should act in a way that can cause a systemic crisis - and to give effect to international commitments to make the financial sector safer.
At its 53rd national conference in December 2012, the ANC stated that -
As an integral part of the second phase of our transition from apartheid to a national democratic society, we need to accelerate growth and intensify our programme of economic transformation. Over the next five years, the ANC will take decisive and resolute action to overcome the triple challenges of poverty, inequality and unemployment, which are at the heart of South Africa's socioeconomic challenges.
We intend to transform the structure of the economy through industrialisation; broad-based black economic empowerment; addressing the basic needs of our people, including women and youth; strengthening and expanding the role of the state and the role of state-owned enterprises.
The positive changes that the ANC seeks to make will not emerge spontaneously from the invisible hand of the market. The ANC-led government must play a central and strategic role by taking decisive action that is effective in addressing the social conditions of the masses of our people, and it must overcome the patterns of economic marginalisation by expanding the opportunities for sustainable livelihoods.
In the past five years, the proportion of South African adults with access to banking services has increased from 60% in 2009 to 75% in 2013, while an amnesty for 5 million people with adverse credit records was initiated. The amending Bill will enhance this.
The National Credit Amendment Bill, when enacted, will positively contribute towards the continued development and implementation of the ANC's framework aimed at creating conditions conducive to sustainable livelihoods.
I want to end off by thanking our committee chairperson. Ngiyabonga, Baba. Sihlalo ... [Thank you, mister. Chairperson ...]
... for initiating this in the NCOP and in our committee. He was passionate about it. He was so passionate that he ignited all other members, including DA and Cope members, who were jumping up and down in their chairs when we started with this. But then they got other orders from somewhere up above - I think from Wale Street - to say "No, you do this and you do that." They are not independent thinkers, as the ANC members are.
Thank you very much, Sihlalo Gamede, for leading this committee in order to implement ANC policies. Thank you very much. Also, to the Minister: thank you very much, Minister. To Director-General October, and Deputy Director- General Ntuli, the biggest Chiefs-Pirates supporter in South Africa, thank you very much for the time and the effort in leading us up to the Bill. [Laughter.]
To our able, competent and always passionate Stormers supporter, PLO Saroj Naidoo; to the other members of the committee and to the ANC as a whole: Victory for South Africa has already started. Watch this space on 7 May 2014 at 12h00, when you will see the results. Victory will be ours. Forwards march, backwards never! Chair, I nearly said "amandla" [power], but I thank you. [Laughter.]
Hon Chairperson, let me thank all the speakers for the support they have offered this Bill. I think it is the statement by everybody in this House that this is, in fact, an important piece of legislation and that both the amending Bill and the Principal Act are here to encourage responsible credit provision and to protect the poor consumers against all kinds of unscrupulous practices. In order to put the discussion into context, I just want to name some of these practices.
When the Marikana tragedy occurred, the National Credit Regulator went to Marikana and found out that there were no less than 11 small loan providers there, most of whom were noncompliant with one or other aspect of the Credit Act. Typically, what was happening there was that people were just being offered all kinds of credit with very high rates of interest. The credit providers did not have to take any risks. They would take a garnishee order so that when the wages of the workers were paid to them, then the top slice of that would be the garnishee-order repayment to the credit provider. That is the sort of practice that we have seen in this country.
We have all seen on the television the advertisements aimed at happy gogos [grandmothers] getting their small loans. We did not see what the costs will be, and also the interest they will have to repay. We have seen a variety of practices like that. What we are basically saying is the following.
We need to get into a situation in this country where we do not have to extend credit recklessly; where we require credit providers to do a robust affordability assessment to make sure that the people who are undertaking this debt can do so responsibly and have the income to justify it; that the loan is for a reasonable purpose and that they have a reasonable chance of repaying.
Work has already been done by the National Treasury to amend the regulations on garnishee orders so that such orders would not be available to the credit providers in the same way that it has been. Basically, that is the situation.
Because I have been getting a few notes from members, I just want to explain what the removal exercise is that I was referring to. At the other end of the scale we found that there were 10 million people who, maybe while still much younger, at one stage or another in their lives, got next to their names at the credit bureaus words like "slow payer", "delinquent payer", "defaulter" or "absconder" because they defaulted in their payment of some debt or the other.
What happens is this: Some credit providers would go to the credit bureau, which is a commercial company, and see this kind of language next to peoples' names. That would make it impossible for them to get credit. If they appliedfor a job, they would probably not get it.
Now, how do they get their name off the credit bureau lists? Not in an easy, simple or cost-effective way, at the moment! They actually have to go to court to pay the money off and pay another packet of money at court to get their names off the credit bureau list. That is what we are changing. We are changing that! What is this removal of adverse credit information? It is about removing those kinds of phrases from people's names.
I think I should clarify that it is not an amnesty on the debt. If you incurred a debt and you owe somebody some money, you still owe that money. We are not saying that you don't owe them anymore; you still do. But, the credit bureau will have to take off that information in that way, as a once- off. That is the exercise that was initiated by the hon Gamede. If you have a court judgment against your name, they can still say you do; but if you don't, they will have to remove all the phrases attached to your name on a once-off basis. On 1 April, it will no longer be legal for a credit bureau to provide information containing those kinds of phrases to any credit provider. Thereafter, they have two months to remove all that information from their books, in order for people not to come back again.
The credit bureau can still provide the credit provider with people's payment information without those statements. The credit provider will then have to conduct a proper affordability assessment. If they see that in the past six months one has made a payment with no information that states that he or she is a slow payer or nonpayer, they will have to make a call as to whether to extend a credit or not to that person.
So, we think that there is a basis for responsible decisions and proper affordability assessments by the credit providers. What will happen is this: After people have paid up and rehabilitated themselves, instead of going to court to spend another packet of money, their information will be expunged.
The people, therefore, will not have this albatross around their necks for many years. This is very detrimental to them. That is the work we have done, with the support and the leadership of Comrade Gamede and the NCOP. I once again would like to thank him for that piece of work. We will also be calling on the Credit Regulator and the National Credit Tribunal to look at the way in which credit is marketed in this country, particularly to low- income people. We can't have a situation in which people are just being offered credit recklessly, willy-nilly and without control. We are looking at that and we ask the National Credit Tribunal and the Credit Regulator to look at that.
Finally, let me also just thank everybody who has made this piece of legislation a great success by gathering of the support of all the parties. Although Comrade Freddie Adams said that we led it as the ANC government and as the ANC, we managed to get all parties to support it, even at this time of the term. I think that is a considerable achievement that has a lot to do with the work done by the officials.
I also want to salute the Deputy Director-General of the Consumer and Corporate Regulatory Division, who spearheaded the work in Parliament, and the National Credit Regulator for the important work they have done.
Once again, I thank everybody for their support. We look forward to being able to improve the regulation of the credit industry in this country through this legislation. Thank you. [Applause.]
Order! From the Chair also, thank you to Mr Gamede. You have been a proactive Member of Parliament and thanks for a fine piece of legislation, as everybody has said. Please give him a big round of applause! [Applause.]
I am advised that you are requested immediately after the adjournment to go and stand on the steps of the NCOP for a brief photo session. People will want to share your photos, perhaps when you are no longer in the NCOP one day. So, there will be a quick photo session outside.
Debate concluded.
Question put: That the Bill be adopted.
IN FAVOUR: Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga, Northern Cape, North West, Western Cape.
Bill accordingly agreed to in accordance with section 65 of the Constitution.