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Good News for Credit Providers

The regulations that govern how affordability assessments are conducted on credit applicants have been suspended.

The Department of Trade and Industry (DTI) announced their decision to suspend these regulations in the Government Gazette last week. The suspension applies from 13 March, when the National Credit Amendment Act (NCA) came into effect, and will run until 13 September.

 

“System Changes”

The Director of Credit Law and Policy, Siphamandla Kumkani stated that the decision to suspend the affordability assessment regulations was based on credit providers asking for time to perform “system changes”.

 

What about Reckless Lending?

Credit providers have guaranteed the DTI that no reckless lending will take place while the suspension is in progress.

In addition, the National Credit Regulator (NCR) will be issuing affordability assessment guidelines for credit providers to follow while the suspension is ongoing.

 

Bad News for Consumers

On the other hand, the timing could not be more inopportune, as consumers face rising living expenses, possible interest rate hikes and a dangerously weak rand. The NCA affordability assessment regulations are crucial for protecting over-indebted consumers from predatory lenders.