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.]