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.]